How to Choose an MLM business
What MLM business is right for you?
Choosing the right multi-level marketing (MLM) company will be your first and most important MLM business decision. This article’s goal is to provide you with a breakdown of each key MLM business component that you must understand and compare in order to come to an intelligent business decision.
Business Type: MLM Products vs. MLM Services
What do you prefer to sell, a product or service? Some entrepreneurs prefer selling products because they are tangible. People can see and touch the product being presented, and some products just sell themselves on sight. Most services, on the other hand, need to be explained in detail. This demands an articulate and well rehearsed presentation. Providing visual tools like Power Point presentations or full color printed materials is highly recommended. There are down sides to products, of course. You must either carry inventory or product samples. In most cases inventory and product samples require an upfront cash outlay. A clear upside to services is that they usually require a subscription or membership. That means a reliable recurring revenue stream to you. A revenue stream that can build into a very significant periodic annuity that you can retire on.
Product/Service Type
Here is where it gets fun. At least it SHOULD be fun, and that is the point, to HAVE FUN! If you ask most successful entrepreneurs what key ingredient contributed to their success you will find it was the passion for the product or service they were selling. Sell what you know, love, and believe in! In order to build a successful business, despite the marketing hype of many MLM opportunities, you will work long hours. Notice how I left off the word “hard” after “long” in the previous sentence. The hours will not be “hard” when you are passionate about your MLM business. And selling something you are passionate about and believe in will be so much easier.
Start-up Cost
Most MLM businesses have start-up costs. Tally these up line by line and you will see items like:
- Application / Start-up fees
- Training
- Inventory
- Samples
- Materials
- Subscription/membership fees.
Now take a look at the total cost because that is just the beginning of your true start-up costs. Don’t forget about all of the other things you may need to start your new MLM business:
- Computer
- Internet connection
- Business phone line
- Fax machine / service
- Printer/copier
- Cell phone and service
- Business office/space and furniture
- Web site
- Business license
- Office supplies
Reputation
Time to put on your Sherlock Holmes hat and start investigating. The best place to start is Google. Run searches for the MLM name you are considering and see what comes up. Dig deep in the search result list, at least 30 pages in. If nothing negative comes up, great, but we have just begun our research. Now run the following additional keyword searchs:
MLM name + complaint, MLM name + sucks, MLM name + law suit, MLM name + rip off, MLM name + scam, and, well you get the idea. You are likely to turn up at least a few negative results in Google for the MLM in question. That is OK, some people are very hard or impossible to please. You have probably encountered that kind of person yourself and if an MLM is working with 10s of thousands of people they are going to encounter a few of those too. Now, if you find many complaints, say 25 - 30 or more current ( over the past 2 years) results, there may be a problem. Finally, search the Better Business Bureau for complaints. Read all of the complaints and take them up with your MLM representative. You should receive a response with a reasonable explanation or demonstrable policy adjustment that shows the issues have been addressed in good faith.
Stability
More investigating here. Once again use the internet as your research tool. Run Google searches for MLM name + bankruptcy and run a search for the MLM name under the Google “News” term. Read all of the press releases and news stories related to the MLM. Have there been recent shake-ups in the management team, law-suits, or acquisition attempts that could negatively affect the future of the company?
Compensation
How will you be paid? Is the amount on a per sale basis or recurring basis? What is the payout for your downline sales? Are there any income limitations or commission payment expirations? How does this plan compare to similar MLMs? The bottom line is how realistic is the plan. Remember the rule that if it is to good to be true it probably is. Still, does the plan allow you to not only achieve a healthy income in a reasonable amount of time, but also reach your wildest dreams if you do everything right? These are the questions you need to answer when it comes to compensation.
Training
Here is where you can tell if the MLM really cares about your success. A great training program demonstrates that the MLM cares. But what makes a great training program?
- A set of live, in person product knowledge and sales classes
- a comprehensive business and sellers manual
- online supplementary and continuation training videos and seminars
- a mentor
There is an exception to the above and that is emerging MLM companies. You may come across a start-up of MLM where you can get in on the ground floor. These start-ups do not typically have formal training programs so you will likely rely on one-on-one training to get you up to speed. In this case you will need to be the judge of your mentor’s teaching skills and time commitment to train you adequately.
Support
Does the MLM provide free phone support to handle technical, customer service, and business related issues? What are the hours of support operations? Place a test call into support to see how long it takes to reach a live person.
Reporting
Find out how you will receive commission and downline statistical reports. The best solution is access to your own online account where you can run on demand reports on your commission, payment history, and downline activity.
Agreement/Rules/Regulations
Finally, be sure to carefully read the MLM Agreement and Rules and Regulations. This is so commonly overlooked yet incredibly important. You may be shocked to learn a particular policy prohibits you to market in a certain way (for example, marketing online) or limits your long term earning potential. If you do not understand any part of the rules and regulations ask for a clear explanation or seek legal council before signing up. The last thing you want is to spend all the time and money getting started with your new MLM business only to find out later that you completely misunderstood a simple policy that limits your ability to make your dreams come true.
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