In the case of business, risks are involved with every decision and action. Taking risks is necessary for success in the business. Successful people do not shy away from risks, they take them on eagerly and never give up until they are successful. Successful entrepreneurs are continuously looking for ways to identify and mitigate threats that could otherwise cripple their businesses. The best way to do this is through risk management. 

Risk management is a process by which all of these possible outcomes are identified and measures are taken to minimize them. Risk management in direct selling focuses on both positive and negative aspects of the business. Direct selling businesses may also be susceptible to more risks than traditional business models because of the way they interact directly with consumers.

Legal and regulatory compliance is the most common risk faced by direct sales businesses. The risk of breaking legal and regulatory rules can result in significant fines, penalties, sanctions, or even complete business closure. The worst consequence of breaking the barriers of legal and regulatory compliance is the breach of brand trust and identity, which leads to product recalls, loss in market share, and high financial penalties.

Strategies for risk management:

1. An income disclosure statement should be published every year.

2. Most of the distributors are not aware of the legal implications so, train them about              legal procedures and policies.

3. Remove non-compliant social media posts of distributors.

4. Align organizational policies on the content management systems to detect non-  

   compliant content.

5. While distributor onboarding, enforce distributor agreements.