Research Your MLM: 10 Considerations You Must Make Before You Join

Tuesday, November 17th, 2009 at 7:21 am

You’ve found an MLM to join, but don’t really understand the compensation plan very well? Not sure if the company is reputable?

No problem, you’re not alone.

There are many out there, and before you join any MLM, as a wise and savvy business person, I hope that you did your homework and found out more about the company – it’s corporate structure, the type of comp plan, how long it’s been in business, where the home office is located and so on.

Unfortunately, most people that join an MLM opportunity never do their due diligence to fully understand the implications and finer points prior to putting their money on the table.

Besides the products your company offers and their marketability, you must ensure the company platform is stable and that the commission system they employ works for you -BEFORE you sign up.

Remember, you are starting a business. You’re not buying a lottery ticket!

10 of the considerations to make are as follows:

1. You should avoid any plan that promotes commissions for recruiting additional distributors. It may be an illegal pyramid. Commissions should be primarily from sales, not sign-ups. If it is front end heavy on rep sign up commissions, look carefully and proceed with great caution.

2. Be wary of a compensation plan that asks new reps to purchase expensive inventory: they can collapse quickly and may also be thinly disguised pyramids.

3. Look at the type of comp plan: Matrix, Binary, Australian, Unilevel, Compresses? There are benefits to each and some work better than others. Research the kind offered in your company and figure out if it works for you.

4. Beware of companies who claim to sell miracle products with unfounded claims and promise enormous earnings. Substantiate any company claim with hard evidence.

5. Be on the look out for decoys: references by a promoter that describe fictional success in earning money through the plan. You’ll need to see the numbers, real time.

6. Don’t pay or sign any contracts in an “opportunity meeting” or any other high-pressure situation. Insist on taking your time to think over a decision to join. Talk it over with your spouse, a knowledgeable friend, an accountant or lawyer who is familiar with the industry.

7. Do your homework. If you are not sure of the company background, check with the better business bureau and state Attorney General about any plan you’re considering, especially if the earning claims seem too good to be true.

8. Any reputable company should openly list the corporate structure, leaders and CEO on their web site. Search the history of the company leaders.

9. Product safety should always be considered. Look at the ingredients, research them and find out what you can about their efficacy, and possible side effects. Most are not regulated by the FDA, so this may be a difficult search: look for reputable third party research.

10. Research your market and figure out if the product you will be selling has a retail market. If there is too much competition or no market need, you will have a hard time selling it regardless of how much you believe in it.

When you have done these steps and are involved with an MLM, you’re ready to start signing up reps.

However, now your due diligence changes. You found a reputable company with a product you like and a comp plan you like, it’s time to “hire” reps into your business.

Here’s where you have to be a worthy business leader who has his reps do the same thing… evaluate the opportunity to see if it works for the potential rep before signing them up. You want to ensure the reps you have in your organization are well educated on the business they are joining into.

And then you absolutely MUST allow only the reps you believe have shown the ability to learn what you are doing and create a viable business of their own.

But that’s another post for another day.

Warren Smith

406 490-2556

Get Ahead In Life Marketing Group

http://mlmgrowthexplosion.com

Marketing a business requires a sound business foundation and ability to look at a business critically to determine if it will work for you, and how your reps will work with you. I got more information in one weekend reading than I did in 10 years of running my own business reading this:

http://recruitmorereps.mlmgrowthexplosion.com