For your initial MLM experience it is usually wise to start with a company that has been in business at least three years and is a public company. Eighty-five percent of network companies fail within the first 18 months so you know it has made it through some major hurdles if it is still around after three years. And, if it is publicly traded, you have access to information about its background and the background of the officers. Find out what the compensation method is for the officers. A percentage of sales in addition to salary indicates that they have an investment in you doing well, which is a good sign.
Another good sign is if the MLM is a member of the Direct Selling Association, a major industry organization which monitors MLM activities worldwide. Also, check out what your state's laws are on MLM organizations. The "toughest" states are considered to be Michigan, Arkansas and Georgia. If an MLM practices in more than one state, it is meeting more than one set of legal requirements, which may indicate a solid footing for the company.
After you have investigated the company itself, take a look at the product.
- Why would someone want to buy it from you rather than an established retail establishment?
- Is it unique?
- Is it something lots of people would use so you have a large number of potential buyers?
- Is it something people need to buy frequently?
- Is this something that is a fad and will go out of style?
Be truthful with yourself. Just because you think a certain vitamin will save the world, can you convince others enough to make a decent living at this business?
What type of bonus or commission plan does the company offer? Most companies base commission on the sales of you and your "down line". Bonuses are offered by some companies as are group health insurance programs, reduced rates for products purchased for your own use, and other variations on compensation add-ons. Be certain to ask when and how you get paid. Is it a regular payment plan?
Additional benefits come from support that the company may offer in terms of literature, audio and video tapes, training, conventions, newsletters, online access and web pages. Investigate costs for each of these services. Some companies make the majority of their money from selling you support, rather than selling products. Your sponsor is part of that support system and should be accessible and provide you with training and the information needed for you to be successful.
The internet has become a powerful tool for MLM entrepreneurs. That does not mean spamming everyone you can get an email address on with your sales pitch. Sale or valid contacts are rarely made that way. It is an expensive, nonproductive way to expend your efforts, no matter what people tell you who are selling mailing lists with "prequalified" buyers.
What does work? Online discussion groups and chat rooms are great places to network. If you set up a website, you can set up auto responders to deliver additional information if someone selects the opportunity for more information on the site or forms can be used to allow the visitor to leave contact information should they wish to contact you directly. Subscribe to online newsletters which may allow advertising
It is also wise to contact the Better Business Bureau and the Direct Selling Association for any complaints about the company.
