How to choose a Network Marketing company to work with

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This is a serious article and is not a spoof or a trick. It is not an attempt to get you to sign up to anything.

This article gives pointers to people who are in Network Marketing and are looking for a new company. I am not against the individuals who are in these schemes. This site is aimed at facts and exposing the realities of Multi Level Marketing.

I am forever seeing people go from one company to another and making dreadful mistakes along the way. Some of you have been led into illegal schemes or tricked into doing illegal things yourself. Many of you will have had your reputation affected and gone through a lot of trauma.

A bit of research before joining a company could save you a lot of trouble.

 

Products

What are the products? Don’t be swayed by the level of commission or an assurance that the products will ‘sell themselves’. Products do not sell themselves, you have to sell them. If you don’t wear make up, don’t sell make up. If you aren’t into sports, don’t sell sports products. You will have no credibility if you try and pretend you know about these things.

You could run the risk of looking like an idiot if you are selling something you know nothing about. It is not enough that the company provides training in the products. People will see through you. People with a real interest in the market will spot you a mile off.

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Is there a market for the product?

Will people actually buy the product for what it is? Is the price reasonable? Do you know of people that will buy it because they want it? If they saw it in a shop, would they buy it? You need real customers, do not rely on friends and family who you think will support you. They may initially order from you to be supportive, but you do not want pity purchases. Pity purchases dry up, and can cause resentment between you and people you care about. Friendships are more important than selling a lipstick. Ideally, you would want repeat customers who like the product and ask you for it, instead of you chasing them for orders.

Do you want to sell to customers or will you have to beg?

Is the company registered at Companies House?

It doesn’t take long to check a company is registered and their accounts can be looked at. Go to their website and type in the company name in the search box. You can find out when the company was incorporated, who runs it, all sorts of information. Take a bit of time to look into the details that you find out.

It isn’t enough to be told by someone you work with that a company is legitimate. Find out for yourself. It really doesn’t take long. If you are investing your time and money into a scheme, you really should be doing these background checks. Google the names you come up with. Have any of them been in trouble with the law? If there is no information on them anywhere, this might not be good. You would think that someone who has set up a business that is going to be really successful would have experience and leave a footprint all over the internet on their previous activities.

Compensation plan

Have a look at the compensation plan. Do not be distracted by people or figures that show you can earn a lot of money at the top. Have a look at what you think you are likely to earn.

If you need to host parties, how many do you realistically think you will do? It may be suggested that you do 2 parties a week to earn a certain amount of money. How realistic is this? How many people do you know that will be happy to host parties for you? How far away will you have to travel? How much time and cost will be involved? Two parties a week does not sound much, but could you keep it up for long?

Don’t get carried away with what could be possible. Work out what you can realistically achieve. Look at the details. Work out a plan properly. If someone says it is easy to set up parties, ask them for the details on how they do it. If someone tells you it is simple and no effort, they are likely not being honest with you. Especially if they are trying to persuade you to join their team.

Are there minimum amounts of money that you need to bring into the company every month? Companies have different amounts that you are expected to bring into the company in order to remain active and to earn bonuses. Find out what this is. Will you be expected to make up the amounts with your own purchases? Wold you be buying these products anyway at these prices or would you end up spending money you would otherwise have spent on bills? People think they will just make up the amounts on their own purchases for a bit, and then their businesses will take off and they won’t need to anymore. This is not a good tactic. You will be wasting your money and you could end up being your own customer.

Advertising and marketing

Check what type of product you will be selling and what the selling points are. You will need to find out what claims are allowed and which ones are illegal. When you put claims on social media, you are as responsible for the advertising as a standard company is when they advertise on the TV or in magazines. Officially in the eyes of the law, you are responsible for your claims.

If a company sells coffee and you market it as weight loss coffee, you could get into a lot of trouble if you break advertising rules. Have a look at the CAP rules for the UK. This page tells you nice and simply some of the main advertising rules you need to adhere to, like what you can and can’t say. It covers weight loss rules, before and after pictures, testimonials, health claims etc. If you are told to sell a product by claiming it can do something like increase metabolism, cure diabetes, lose weight, help with depression, you need to check this is actually allowed.

Link to weight loss rules at the Advertising Standards Association.

Have a look at this index from the ASA that covers all the advertising rules you’ll need. There’s sections on competitions, environment, customer data, health claims.

If you are satisfied that the product claims can be advertised by you legally, you will be in a good position. The last thing you want is the ASA telling you to remove content or Trading Standards turning up at your door. You will not be able to blame the company for your claims, it is you that is responsible for it.

It is not acceptable for you to say that you were told to make the claims or that you just copied an advert. Make sure you carry out your responsibilities seriously.

If a company just sells weight loss coffee but you know you cannot sell it as weight loss coffee without breaking the law, could you sell it just as coffee? If not, you might want to find another company.

The DSA

Some people will tell you their business is legitimate if it is registered with the DSA. However, this does not provide you with any protection at all. Some companies have been with the DSA and been shut down by the authorities for being a pyramid scheme. The DSA is made up of people that run Network Marketing companies. They act to protect the companies, not the individuals signing up as reps. People who have complained to the DSA have found their complaints just passed onto the company.

Beware the hype

I’ve seen the hyped up videos, you probably have too. You know, the ones where someone is screeching  about the amazing opportunity they have just stumbled upon. Join now, it’s amazing, they’ve looked into it and it’s perfect. DO NOT TAKE THEIR WORD FOR IT! You may like them and trust them and want to join their team. You may even have worked under them before.

Signing up to a new company should be a big decision and not taken lightly. Do your own research. You don’t need to tell the person you don’t trust them. Check out what they are saying, follow the points in this article and decide for yourself if it is a good opportunity for you. If you decide it is legitimate and you think it is for you, join up. If it isn’t for you, find something else instead.

If you decide not to join and you are put under pressure, remember you are in charge of what you do and which company you chose. You should not be working with someone who tries to pressure you into their team. That’s not how professional people behave, that’s what bullies do.

How will you get paid?

Being paid isn’t as simple as being paid straight into your bank account. Most MLMs pay into a third party account. You might be charged for withdrawing money or there might be minimum balances needed before you can access it. Some companies pay bonuses in the form of stock or discounts on their products. Is it important to you how you get paid?

Is it an illegal pyramid scheme?

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This can be a tricky subject and I have seen may different interpretations on what a pyramid scheme is. It is usually the people who are recruiting that give the loosest definition. You should be familiar with pyramid scheme laws so that you can avoid one. Here is an article I wrote that brings together the relevant rules for England and Wales. Have a look. There are links to the actual law so you can see with your own eyes what the law is.

In summary, the big rules (In England and Wales) are-

You cannot be your only customer

There has to be a product or service that is sold

You cannot spend more than £200 in the first month in a scheme

You have to display the statutory wealth warning on recruiting adverts

There are some irrelevant ‘facts’ that you might hear to explain pyramid schemes like- “corporations are pyramid schemes, if people can overtake you in the pyramid it is not a pyramid scheme, it is registered with the government so it must be ok, I have earned money so it must be ok…” No doubt you will hear all sorts of rubbish. Listen to what people say by all means, but check out what the actual law says. After all, it could be you that is breaking the law if you are not careful.

In the US, you need to look at the FTC’s rules. Have a look at what they said about Herbalife.

 

Extra costs

What sort of training is available? Some companies provide training manuals or online modules as part of the joining fee. Some will charge you for it. Some will charge you for training courses. Some will expect you to travel long distances at your own cost and pay for your own hotel.

Are there events that you are expected to go to? Herbalife have recently been in trouble and are being sued for their events. They told people they would make money if they attended all the events. These events turned out to be a money making exercise and did not help anyone make any money.

Have a look at postage and packaging fees. Will you have to pay for it if you order for a customer? Younique presenters and LuLaRoe end up paying a lot for postage. Is there a minimum amount per order?

Will you have to pay a fee for having a back office or for being paid? Will you have to pay a fee to your upline to be in groups ( I have heard of this happening).

If the person trying to recruit you tries to fob you off and not answer your questions properly, or tries to tell you not to be so negative, take this as a warning sign. It is perfectly acceptable to work out what your running costs are going to be before you invest your time, money and reputation in a company.

 

Look for criticisms

Other people may have been in this company and had problems. What problems did they have? It will be useful for you to know how others have done. You may be told not to look for ‘negativity’ and to stay as positive as you can. This is not helpful when you are assessing a business opportunity.

Imagine you looked up a company and found a criticism about the product availability. Maybe there is never anything in stock or there is a three week wait for stock. This would be useful to know. What if people are never paid the correct money or ex members complain about hidden costs? You need to know this.

Make your own mind up over what you are going to do with this information. You may want to dismiss it as the ramblings of a bitter ex-rep. You may decide that the problems are going to be a problem to you to.

Deciding to ignore any criticism and any problems could backfire on you. If you have a friend who has concerns about the opportunity, do not dismiss them. They may have a valid concern. Listen to what they say and then make up your own mind about it. There is no need to fall out with them or cut them out of your life. It is a very special thing to have someone looking out for you and telling you what they think.

Of course, there is a difference between someone who dislikes you and makes mean comments, and someone who is worried you will make a mistake. Please dismiss the nasty people, but listen carefully to worried people that love you. You don’t have to do what your loved one says, but it is hurtful and unnecessary to cut caring people out your life who have not done anything wrong.

 

Understand what FDA accreditation means

Quite often, you hear the claim that a product has some sort of FDA backing. Is it certified, registered, certificated? Do you know what these terms mean? Do you know which applies to the products being sold? Have a look at this website that clearly sets out what they mean and how you shouldn’t be misled by the phrases. Don’t be impressed by the claims until you know what it means.

Your attitude

I get that you need to be positive, I really do. You deserve to do well, I want people to be successful. Boosting your self esteem and believing in yourself are good things. These can give you confidence and push you to try new things. These are healthy attitudes and help in everyday life.

I do not want to knock anyone’s confidence, or belief that everything will work out OK. What I do object to though, is the attitude that you can have anything you want, just because you want it hard enough. Your desires may give you the push to be more adventurous and give you a purpose in life. This is good.

What is not so helpful are the people who persuade you to ignore your rational thinking and natural curiosity and just do what they tell you to do, based on the belief that just wanting it is good enough. You need more than that. You deserve more than that, you really do.

If you want to be taken seriously as a business person, do your research. Don’t just hope it will all work out alright because your friend said it would. Think for yourself.

 

I hope you find the above advice useful. Remember the following points

You are responsible for your actions

Don’t take people’s word, find evidence

Don’t break the law

Listen to criticism, is there any truth in it?

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5 comments

  1. I would just like to point out that based on the very informative advice given above, there are MLM companies that are service related and not product related. It means that with the correct service, or services there is a good chance that at the start of a month instead of not being paid because a product has not been sold, a distributor will get paid because the service has been used, In some cases, like air and water the service is a necessity not a luxury. It will continue to be a necessity even through a recession.

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    1. In this instance, the product would be the service. What people need to be especially aware of are the companies where there is no product at all. Like the various cryptocurrencies doing the rounds at the moment. Their claims for what they actually sell are very dubious. Or the ones where you are just buying membership in the scheme.

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