Is MLM Too Good To Be True?

“Become a Millionaire!”

“Make $$$ 5000 per month”

“Instant Success!”

The headlines are certainly tempting, especially in today’s troubled economic climate.

The idea of making money right away without any special skills or major investment appeals to the immediate need, while the promise of residual income appeals to the desire to not end up in your current financial position ever again.

And some highly reputable companies have been built on this marketing & distribution structure… Avon, Mary Kay,Forever Living, and more. But then there’s the down side…

“Do I really want to pitch this to all my friends?”
“Can I actually make money at it?”
“How do I know it’s not a scam?”

If you’re considering an MLM opportunity, ask these six questions to determine whether network marketing is worth your while.

1. Who is your upline?
Take it all the way to the top. What do you know about the person who introduced you to the opportunity? Can you trust what they tell you? Are they willing to divulge exactly how much they’ve been making? And what about the founders of the company (assuming it’s a newer company)? Have they been successful and reputable in their previous businesses? Investigate your entire upline just like you would a business partner you’d never met before.

2. What is the product?
Is it something that would sell well in a retail store or via other traditional marketing and distribution channels? What’s the competition like? How convincing are you going to have to be in order to sign up customers? If you’re not an experienced salesperson, don’t expect to become one overnight. You’re going to have to become an evangelist for the product, so make sure you believe in it.

3. When will you start actually making money? Don’t fall for the line that it takes months or even years to show a profit. You should be able to recoup any investment and start earning income within just a few weeks if there’s really demand for the product. Making a living at it is another story. You need to be able to work it part-time in addition to other steadier income sources.
Will you realistically be able to do that with this company?

4. Where is the product being promoted and where can you promote it?
Is the company doing advertising and publicity of its own to help create demand for the product? And what restrictions are there on where and how you can promote it (advertising, web sites, etc.). There’s not a right or wrong answer to that question – a wide open policy is more flexible for you, but for everyone else, too. If you’re prepared to be highly competitive, that’s fine, but if not, you may prefer to work with a company whose policy is more restrictive.

5. How were you recruited?
Were you recruited primarily as a customer, with just a mention of “income opportunity”, or was the primary pitch about the business opportunity? The ethical way to build a downline is to sign people up as customers first, and then if they like the product, they’ll be drawn to become a rep. A hard-sell on signing up as a rep right at the outset should send up a red flag for you.

6. Why are you doing this?
This is perhaps the most important question of all. If you’re doing it because you think it’s going to help you out of a cash crunch, forget it. If you’re doing it because you think you’re going to be rich in a year, well, it’s fine to have a vision, but don’t bank on it. On the other hand, if you really believe in the product, that gives you the best likelihood of success with it.

There are no absolute right and wrong answers to these questions. The point is to make sure that you’re going into it with your eyes wide open. Many people have made a lot of money in network marketing, MLM, and consumer direct marketing, but many more have ended up wasting a whole lot of time and money chasing a pipe dream. You can ensure your success best by being sure you’re getting into the right opportunity in the first place.

For more information on the MLM business model, please read What Is Multi Level Marketing?

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