Rules for Evaluating MLM Opportunities
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Rules for Evaluating MLM Opportunities


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Affiliate program comparison can be a daunting task, especially when searching for MLM companies. Many MLM companies are pyramid schemes, are very poorly managed or market products with little consumer appeal. If you seek MLM opportunities, know that MLM can work, but there are MLM Rules to go by. Learning these important MLM rules will enable you to find an MLM opportunity that can provide you with lifelong residual income. Failing to learn them will prove costly.


Rules for Evaluating MLM Opportunities


  • STABILITY

    Affiliate programs backed by companies with proven track records and time tested payout are those you should seek. If you put forth the effort to create the income stream, they had better be around to pay you!


  • PRODUCT

    MLM companies must provide a real product or service that will be in demand by the general public. Many MLM companies promise you income based not upon product, but upon their marketing structure. Others “sell you the dream.” It is easy to identify these MLM companies because it is difficult or impossible to identify their product. If an MLM’s sole means of income consists of recruiting and pushing unproven marketing products to its recruits, it is at worst a scam and at best a very poor marketing strategy. Ask yourself whether your mom, dad, sister or brother would like to purchase marketing products from you. Enough said.


  • BUSINESS CONCEPT

    A unique business concept is a distinct advantage in product marketing. This is the very characteristic that has made MLM opportunities so appealing. A company able to wrap its merchandise in a novel and comprehensive marketing plan enables you to generate sales. You see, most marketing plans and products are not bad — it’s just that you should be using them, not selling them!


  • RESIDUAL INCOME

    Residual income is necessary to make your MLM business succeed. Do the work once and get paid for repeat sales and referral fees. MLM companies offering single-sale products or those that pay you only for your first sale to a customer are not good candidates for your business. Commissions based upon recurring membership fees also represent an important source of residual income.


  • EARNINGS REPLICATION

    The heart of MLM is the ability to gain income not only through your own efforts, but through the efforts of others in your group. In a traditional (simple) MLM structure, you gain through your efforts and those of your downline (members below you). In a forced matrix, you can also gain spillover from your upline (those above you). There are many combinations and variants of these two basic themes; their implementation can become very confusing. A forced matrix or forced matrix variant can provide you with a fast start if your upline is very aggressive. Note, however, that many forced matrix MLMs are designed to appear very attractive while, in reality, they are inherently unstable. Growth and earnings of an improperly structured forced matrix MLM cannot be sustained, leading inevitably to poor performance or outright collapse.


  • WORLD MARKET

    The internet is exploding globally. Let’s take full advantage of this burgeoning world market.


  • ZERO OR LOW STARTUP COST

    An affiliate or MLM opportunity should not cost you hundreds of dollars per month to get started. We consider internet home businesses that enable you to recoup your business investment within a year with an option to join for free to be reasonable business investments. Avoid MLM companies requiring hundreds of non-refundable dollars up front just to get you started.


  • NO EXPERIENCE NECESSARY

    Are you an experienced marketer? Most of us are not; we are ordinary people just trying to earn a little extra income. Some of us, provided we have the proper motivation and assistance, will go on to do more — which leads us to ....


  • SUPPORT

    An affiliate or MLM opportunity should provide the tools and training necessary to help you get a quick start and grow your business at whatever pace you find convenient. The program sponsors should be able to resolve disputes and technical issues quickly and fairly.


  • NO QUOTAS

    Many of us have jobs and family obligations. We want to generate extra income at our own pace in our work at home business without having to meet sales targets set by our affiliate program sponsor.


  • NO PAPERWORK

    Affiliate programs should have the necessary infrastructure in place to provide full accounting (for referrals and sales), tracking (sales) and notification (referral) functions for you. This preserves your most valuable asset — time!


While not all affiliate programs are right for everyone, we feel these guidelines can aid you substantially in selecting MLM opportunities you may be considering or in evaluating MLM programs you have already joined.


Authored by Kenneth L. Anderson.  Original article published 3 August 2003, updated 7 April 2005.


Follow links to the right to learn more about rules for evaluating MLM opportunities. At the left margin, Related Links address topics of interest pertaining to affiliate programs, business and business-related resources.

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