There are many resources available to help make an informed choice if MLM sounds like something you want to try. For starters, the Federal Trade Commission gives some excellent words of wisdom:
Avoid any plan that includes commissions for recruiting additional distributors. It may be an illegal pyramid.
If the pay plan does not pay out 75 percent or more in the first two levels, don't bother looking at the program.
Beware of plans that ask new distributors to purchase expensive inventory. These plans can collapse quickly - and also may be thinly-disguised pyramids.
Be cautious of plans that claim you will make money through continued growth of your "downline" - the commissions on sales made by new distributors you recruit - rather than through sales of products you make yourself.
Beware of plans that claim to sell miracle products or promise enormous earnings. Just because a promoter of a plan makes a claim doesn't mean it's true. Ask the promoter of the plan to substantiate claims with hard evidence.
Beware of shills - "decoy" references paid by a plan's promoter to describe their fictional success in earning money through the plan.
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 a lawyer.
Do your homework. Check with your local Better Business Bureau and state Attorney General about any plan you're considering - especially when the claims about the product or your potential earnings seem too good to be true.
If you think you want to invest, you should:
Be wary if the start-up cost for the investment is substantial
Find out if the company will buy back inventory
Look into what the consumer market is for the products (i.e., how many people would realistically buy this product)
