Today, I am giving you some of the criteria that you could use as you look for mlm companies to work with. A good mlm company should have a good management, great product, flexible financial opportunity, and a support structure. The company ownership/management is the most important factor in any business. A good leader will always create opportunity for you. If you have a bad leader, it doesn’t matter how good the product or compensation plan are, they will find a way to mess it up. Secondly, when it comes to the product, is there need for the product? Does the company product meet that need? Is it competitively priced in the marketplace? Is there enough margin so the field and the company can thrive long term? Do you love it? If yes, then you can join the company.
Thirdly, concerning the compensation plan, are there people in the company that are enjoying the level of success that you are looking for? If there are, then you should be fine. Lastly, a support structure is great depending on the kind of person you are. Some need an already established culture, systems, training, events, and tools. Is the communication platform good enough to keep you in the loop? Your immediate upline is not a factor in your long-term success. Consider yourself at the frontline of your company. If the company is a yes to you, you can then join it. You have to make it.
Next, many confuse genuine mlm with pyramid schemes. An example of a pyramid scheme is the “no product airplane game” whereby the pilot invests $2000; gets 2 people (co-pilot) who also invest $2000 each. Each of the co-pilots get two people (crew) to invest $2000, and each of the four crew get two passengers to invest $2000 each. When all this is completed, the pilot receives $15,000 commission for his initial investment of $2000. This type of pyramid can also be called investment club, investment circle, investment party, etc. These programs are also called “Ponzi schemes,” “chain letters,” “airplane plans,” etc. These programs have cost their participants hundreds of millions of dollars.
An illegal pyramid scheme is not so because of its shape, but because there is no product. Knowing that this is an illegal pyramid, some stick a product into the same building strategy and call it network marketing, mlm, or affiliate marketing. This doesn’t mean that all mlm companies are pyramids. It’s the ACTIONS and what is COMMUNICATED that determines if it is a pyramid or not. The fundamental question to be asked is: FOR WHAT PURPOSE IS THE PRODUCT BEING PURCHASED?
When the purpose (of buying the product) is to earn a commission (on the production of others) – that’s looking like pyramid scheme. If the purpose is to use or sell the product to a customer, that is looking legitimate. If you want to personally try the product to determine if you want to build a business with the product, then that is a legitimate mlm opportunity. What has gotten many companies in trouble is how distributors communicate he actions of how a person builds their business. If it’s all about getting 4 kits in order to make $1000, then we are playing the airplane game. If the communication is that one can lose weight when they use our products in a kit; and that when they help a certain number of people to lose weight, they will make $1000; then that sounds mlm.
The ACTION is to get customers and help them lose weight. The COMMUNICATION is that you can make money while helping people to lose weight; NOT BY GETTING OTHER PEOPLE TO INVEST. If the action and communication is right, your team will do it right too. Failure to do so means you are not in compliance with the regulations that the United States Federal Trade Commission – FTC has put in place. One of the functions of the FTC is to protect consumers from false or misleading advertising by businesses; or from deceptive business practices. They also protect the privacy of consumers.
The FTC has on more than one occasion gone after companies that it believed to be involved in “illegal pyramid schemes.” As an industry, it is important for us to do things the right way. The way the FTC gets to know that there is a problem is when consumers start filing complaints.
Lastly, we have spokespeople such as the Direct Selling Association (DSA), Multi-level-marketing International Association (MLMIA), etc. There are well recognized platforms that give rankings for different mlm companies such as www.businessforhome.org. If the company you want to join is duly registered with these associations that regulate practices within mlm, then you can join it. Always have these details for those who will want to join you in your company. Bonne Chance!