MLM THREAD

That my friend, is illegal. I am not a lawyer, so what I say here is just layman's talk. But as I remember it, if you get paid for signing up people (a percentage of their sign in fees) that is against the law. So it is not brilliant at all.

You are allowed to get a part of the gross profits of your downline, and that is what most MLM companies do these days. You don't get paid for signing people up though. If someone is offering you that, then run the other way.

By the way, this is an internet marketing forum. It is not a make money from home, business opportunity or other type of make money forum, it is strictly about internet marketing. MLM can be done through IM, but you didn't ask about that, you asked about MLM. Look for the thread to be deleted.

My monthly checks tell me it's worth the effort... been getting
them for a LONG time...

Tsnyder

My opinion of MLM's can be summed up by Henry Rollins' song Liar. I used to post the video here but the lyrics are, well, NSFW and the video is very in your face, and some people here don't care for that too much for that, so hop over to YouTube and check it out if you're curious.

It's sad how MLM got a bad name, when people think of MLM they think of scams, pestering friends and family, cold calling out of the phone book, leaving fliers in every area under the sun (and some above), but MLM is really a good business model IF set up properly and it markets the right products, breakaways and drop outs plague the industry as companies come and go.

There are 12 things a MLM has to have to succeed:

1. Company track record - Do your "due diligence" on the company. Check out the company by going to the Better Business Bureau in their local area. See if there are any complaints filed against them, and see if any have been resolved.

2. Financial strength - Even if all factors seem to check out, this is one of the key factors to why many MLM programs fail: not enough money to keep it afloat. Remember that 95%+ of all MLM companies never make it past its 5th year.

3. Strong management - Check out the names of the people running the company (i.e. the CEO, CFO, President, etc.) to see what experience they have had in running other companies.

4. Unique consumable products - Does the company produce an unrivaled product? Is there competition for that particular product, and how do they "stack up" against each other? What kind of market niche is there for that product?

5. Competitive pricing - Do the products "stand well" in comparison to products currently in the marketplace? Don't become "garage-qualified" just to meet the minimum requirements to be given a paycheck by the company.

6. High reorder rate - Is there a real "perceived" value in the product? Does this product get ordered over and over again on a monthly basis? It's quite simple to understand that if there is a low reorder rate, there will be low residual income. Conversely, if there is a high reorder rate, there will be a high residual income.

7. Low attrition - This, in layman's terms, is the number of people that stay on as customers every month. This just means that if a business builder is making money, he/she will continue on with the company. If they are continually in a negative cash flow, usually the average period of time given for this is approximately 90 days. If they go beyond this period of time in a negative cash flow, they will quit the business.

8. Low personal production requirement - This is where you have to analyze what the monthly product purchase is to qualify for a paycheck. After this has been established, you must ask yourself if the "Average Joe" can also meet these requirements.

9. Low entry costs - As in our previous example with the water filter company, it did cost several thousands of dollars to just "get started on the right foot". If these costs are too high, then the "Average Joe" can't afford it. Thus they will never quite get started.

10. Timing vs. trends - Never believe the "Get in on the ground floor", "Be first", or "Pre-launch starts now" hype! Timing to join a company is bad when you observe their growth has stopped. Conversely, timing is good when you observe consistent growth in the company. You also have to look at the changes that are happening in that particular market niche. How will they have to adapt to maintain profitability?

11. Legal, fair, balanced compensation - This must reward everyone in a win/win fashion, and build a "network" of "many people doing a little bit of the same thing". As with the teachings given by one of my previous mentors, Michael Klimek, he taught me to analyze a compensation plan based on a small, attainable number that the "Average Joe" can reach. Look at how much you & every person has to order every month, and see how you are compensated for this.

12. No risk - You should always evaluate the risks of the business versus the possible gains. Where the number of risks is smaller than the gains, it would almost seem prudent to move forward. Please be aware of any companies that offer a "shadow business", that is one that would appear to make more money with the sales of motivational materials (i.e. tapes, books, CD's, etc.) than they would with actual product sales within their organization. These companies should be avoided at all costs.

If you want to talk more or ask me any questions PM me.

Hope this helped,

John

Forever Living Products is one of the best ones, in my opinion. It's decades old, is based on genuine retail sales to genuine retail customers, has over 8 Million distributors worldwide in a still-growing market, and is very ethically and honestly run. Exactly the antithesis of MLM's understandably sometimes "scammy" image.

Anyone interested in a "slightly different view of MLM" may find most of the entries in this blog pretty interesting: don't forget this url . There's nothing commercial there, no advertising, no opt-in and even the author's company isn't named.

She was a millionaire by the age of 25, through MLM, and walks the walk as well as talking the talk. She sold one distributorship a year ago for a huge amount of money and continues to build another. She disagrees with many of the widely accepted views that unsuccessful network marketers tend to have, and is generally a mine of useful and interesting information about the industry.

Whenever you have 1000's of people in the same area rallying around the same cause there is a synergy that will flow through them. This is why some people believe rock concerts to be like cult rallies, you can't tell me there aren't shady looking mf's at a rock concert.

It all depends on the company and the product.

Ask yourself....is this something I would continue to buy if I wasn't doing the
business side?

For instance, I was into Melaleuca for years, but I was only into the
products. So I purchased the products, but didn't do any selling.

Right now there are grocery and gasoline MLMs - I can only recommend 1
that I am sure is a real business and not a scam!

Or you can sell digital products with an MLM model, and avoid that problem entirely.

MLM doesn't HAVE to be physical products like Amway.

Hey LD...

I'm very familiar with your company. I consider it one
of the "gold standard" companies in network marketing.
My name is on a plaque in the home office hall of fame!

Keep rockin'!

Tsnyder

That section isn't dedicated to MLM, it's dedicated to Plugin Profits.

Not to say people couldn't learn about MLM by visiting there, but it's not a dedicated MLM forum.