The biggest news in the blogging world currently is the collapse of Mode Media. What was supposed to be a stable company that provided many with a steady source of income shut down abruptly, without any warning, leaving tons of folks unpaid.

For the record, I don’t use Mode and they don’t owe me anything. Why then am I concerned? Because I have some blogging friends that are personally involved. Because this could have a domino effect. Because this is a wake up call for all bloggers.

When a blogger contracts with a company for a sponsored post or an ad campaign, there is supposed to be a level of trust involved: the blogger will fulfill their obligation and the company will pay the amount promised and on time. Like any other type of freelancing, there can be a large lag involved (120 days is not unheard of).

Every blogger has at least one horror story; those of us who have blogged for years typically have many. I have had experiences that range from simply annoying (many partial and/or late payments) to truly awful (never paid at all, giveaway prizes never shipped that I had to replace, etc).

While nobody wants to be lied to, used, or worked without compensation, it unfortunately does happen. This is a risk that every blogger takes. The majority of the time, everything turns out ok in the end. But when it doesn’t, particularly for those who are counting on promised money to pay their bills, it can be devastating.

There are so many perks to blogging—making my own schedule, interacting with incredible readers, and getting to work with amazing individuals and companies. I’ve always said that even if I didn’t make a dollar from my efforts, I’d keep blogging because I truly love it. For me, any financial rewards that come from TJL are a bonus, not my motivation.

Those of us who are self-employed should never get complacent. Income can dry up without a moment’s notice. Traffic can disappear overnight. There are no guarantees. The best thing to do is diversify, so if one source goes away, there are others to hold us over until it can be replaced. And, most of all, we have to save money for expenses, taxes, and a rainy day because eventually it happens to everyone.

Should Mode make good on their promises? Of course. Will it happen? Doubtful…

Were you effect by Mode’s collapse? Maybe you’ve been in a similar situation? What advice would you give someone else?