ABCIncome.com - How To Choose The Right MLM

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How To Choose The Right MLM

Whether you have been with a network marketing company for some time and are wondering if you made the right choice, or you’re trying to decide how to pick your first MLM, having a few tested and proven guidelines can save you a great deal of time and frustration, not to mention money.

The 13-point criteria defining the, “perfect,” business that appears on ABCIncome.com’s Homepage is only a subset of a fairly comprehensive set of guidelines that have been developed out of direct experience that dates as far back as the 1980s, as well as key information learned from industry leaders and experts with successful experience (million dollar incomes) dating back even further. Some of the criteria are the same as well established and universally agreed upon guidelines that have been proven to work in the process of evaluating and selecting of any kind of business.

The criteria on the Homepage differ from the standalone version in that the Homepage version includes a few words here and there about the advantages of a home based business and/or network marketing. However, I’m assuming that if you are reading this you probably already know at least something about he advantages of a home based business and network marketing, so here we’ll just concern ourselves with the actual criteria.

In my career as a consultant, organizations ranging from small business, to governmental organizations, to the Fortune 500, have paid me for the same kinds of analysis that you are getting here at no cost. While you may find others with their own opinions, methods, lists, and criteria, few will have the background or track record of those you are about to read below.

For instance, while no company or opportunity is truly, “perfect,” I used these same criteria in 1994 to select the first network marketing company and opportunity that I determined to be as close to, “perfect,” as possible. That choice, or, “pick,” turned out to be a very good one indeed, as the company chosen rapidly became one of the most successful stories in network marketing (and general business) history, produced some of the highest earnings and residual income of any opportunity up until that time, and produced the highest earning representative in the history of network marketing. I personally enjoyed a residual income from that opportunity for a decade, for work largely done only in my first two years.

For more than a decade I’ve used the same analysis techniques to similarly pick numerous companies, products, and services, that established themselves as the #1 leaders in their respective industries long before they became so.

Likewise, I’ve used the same analysis techniques to monitor when a company, product, or service has reached or passed its peak, and/or is on the decline. For instance, the company referred to above that enjoyed such stellar success, and that I personally became involved with in 1994, was Excel Telecommunications. Indeed, it was one of the most successful stories in American business history, as its success was not just limited to the network marketing field alone. However, due to a series of ill conceived decisions, corporate mismanagement, etc., Excel began to lose its luster.

So, long before Excel went down a road that eventually ended in bankruptcy my analysis techniques were monitoring its progress, while at the same time I was using the same criteria to evaluate and select a new company and opportunity upon which to focus.

Interestingly, as is the case in such situations almost every time, I found that of the small circle of people I shared this information with in advance most chose not to accept it. Some, like most people perhaps, just didn’t have the business experience, understanding, and decision making ability to act accordingly, while others were simply in denial.

Denial is an all too common trait among network marketers, and one that is responsible for both many an empty bank account, as well as those who give the industry a bad reputation when they recommend and promote opportunities and products to others, including their friends and family, without doing their due diligence.

The earnings potential of network marketing rivals that of almost any other industry, in regard to personal earnings potential. However, due to the lower entry cost, network marketing attracts a high percentage of people with little or no prior business experience.

One of the ingredients for success in any business or endeavor is, “enthusiasm.” However, please try to be careful not to jump into, invest too much into, or stay with, an opportunity merely due to, “blind,” enthusiasm, by disregarding the facts that can tell you whether an opportunity is good or not, when it’s time to get in, and possibly when the writing is on the wall to tell you that it is a good time to start looking for another opportunity.

Before you even start to get into a detailed analysis of a company or opportunity, use the techniques and guidelines explained in my article titled, “How To Evaluate A Website Or Company:”

http://www.abcincome.com/evaluate-a-website-or-company.html

Often doing a few simple checks like those above will save you time by eliminating the need for you to go further. However, if you are really serious about seeing how your opportunity stacks up, assuming it first passes the tests above, here are some other things to look for:

1. Something that you can do now, without jeopardizing your current job or business.

2. Requires as little as two hours per week up to two hours per day to allow you to build significant extra income that can eventually equal and exceed your current income.

The two criteria above can really be lumped together. As mentioned in my article titled, “Don't Quit Your Day Job!”

http://www.abcincome.com/don-t-quit-your-day-job.html

a common mistake that people make when evaluating their home business is to assume that they will be able to replace their current income right away. True, in some cases there are people who have accomplished just that, literally earning a fulltime income in their new business almost from day one. However, that is simply not realistic for most people, especially if they have no prior track record of producing those kinds of earnings. Therefore, you’re going to need the income from your current job or business to support you (and finance your new business) until you can generate a substantial income.

In order for the above to become a reality, whatever company and opportunity you pick it will obviously have to be something that does not jeopardize your current occupation and source of income. And, that also means that it is going to HAVE to be something that you can build successfully part time, working whatever hours you realistically have left over after working your, “day job,” or running your current business, etc.

3. Must be a true home based business that allows you to work from home.

As I point out in my article titled, “Is The ‘At Home’ In
Your Work At Home Business?”

http://www.abcincome.com/work-at-home.html

there are countless people who got into a certain business because they wanted to, “spend more time at home,” only to find that they spend more time working their business outside the home than in. The article above will guide you in this area. However, just be sure that if you truly want to work from home you don’t pick a business that requires constant trips and travel outside the home, whether to local meetings multiple times each week, or to frequent rallies and conventions that require you to travel out of the city or even out of state.

4. No large up-front investment, monthly or yearly fees, inventory requirements (there are no products or inventory that you are required to buy), or risks.

Numerous articles featured throughout ABCIncome.com are aimed at helping you avoid spending too much money on the wrong things, or even the initial opportunity itself. Two articles in particular that you might find helpful are:

Avoiding Bad Decisions
http://www.abcincome.com/avoiding-bad-decisions.html

Budgeting For Your Success
http://www.abcincome.com/budgeting-for-success.html

You’ll also find helpful information in the free reports available on this page:

http://www.abcincome.com/dtstart.html

The above articles and resources will tell you all that you need to know. However, in short, expect most credible network marketing opportunities to have a direct starting cost ranging from zero, to several hundreds of dollars, with an annual renewal fee that typically ranges from zero to less than two hundred dollars a year. As also explained in the above articles, you MUST also plan for and anticipate a budget for operating expenses over and above your direct signup cost.

5. Allows you to start earning almost immediately, with the ability for you to earn significant income within a matter of days or weeks after getting started.

As already discussed and covered in the articles referenced above, the true power of network marketing, residual income, is also the main reason why you shouldn’t realistically expect to replace your current income immediately, but, rather, over a period of months and perhaps even a year or more. Without the right training and ingredients, most people take years to accomplish the goal of replacing their fulltime income.

That said, most good MLM compensation plans do try their best to bridge the gap between long term residual income, and immediate cash flow, by offering immediate, up-front, FastStart, QuickStart, and other types of bonuses. Not choosing a compensation plan that offers enough up-front cash flow as you build your long term income can be a fatal mistake in your business plan unless you have sufficient money from elsewhere that you can apply to growing your business.

6. Does not require you to make a list of, talk to, or approach your family, friends, co-workers, etc.

Throughout ABCIncome.com you’ll find plenty of articles, free reports, and information on why you don’t want to count on your friends and family as a means of building your business. Here’s some food for thought, though. Even if all of your friends and family said, “yes,” which is not the typical response, you would soon run out of people to put into your business! There is no major successful business that uses a similar model for successful marketing. McDonald’s, Best Buy, Sears, etc., don’t rely on their friends and family coming into their stores to make purchases in order to bring in revenue. That should give you a clue that it’s not a viable marketing method.

7. Does not require you to spend time on the phone all day.

The phone is actually one of the most powerful, and economical, tools in your marketing arsenal. Unfortunately, however, it is not a tool that most home businesspeople have mastered. Many people also just seem to have a problem picking up the phone. Proper training and experience can solve the first problem. As for not wanting to pick up the phone, that’s a tougher attitudinal issue that may take more effort to conquer. However, even once you become a seasoned pro on the phone, you won’t want to spend all of your time there. You may also not have that much time available if you are currently working a fulltime job or business already. The training techniques featured here,

http://www.abcincome.com/dtstart.html

show you how to build your organization far faster than most while spending less time on the phone.

8. Does not require "selling" in the traditional sense.

You want to look for a company that has been innovative enough in their marketing approach that you do not have to engage in, “selling,” in the traditional sense, and certainly not anything like, “high pressure,” selling.

Obviously, for money to be made, products and services must be bought and sold. However, in the same way that people shop everyday in various ways without being, “sold,” in the traditional sense (for instance when you shop at your local grocery store, or Amazon.com, etc.), it is also possible for you to market your products without having to twist anyone’s arm to get them to buy. If your company’s marketing plan isn’t structured in such a way, by applying the proper techniques to your company’s products and services you can often achieve the same approach.

9. Provides you with a steady stream of qualified customers who are ready, willing, and able to pay you.

As already explained above, if you are counting on your friends and family as a means of growing your business, you may be waiting a long time indeed! This is one of the key areas that most network marketers never figure out, and that, unfortunately, most companies do not address. And that is that you MUST have a constantly fresh stream of, “qualified,” interested, prospects to talk with.

10. Provides you with the training, support, and tools that you need to start earning money quickly and to be successful and achieve your financial goals.

In my first serious stab at network marketing I built an organization of 4,000 people in about two years, from scratch, and not, “swinging anyone over,” from another organization. One of the things that enabled me to do that was developing my own training program and making it available to the people in my organization.

Most all network marketing companies offer some kind of training to their representatives. However, while that training is often adequate for learning about the products and services, it usually falls short when it comes to showing you how to build a truly successful business. Very few companies have such a training program. If yours does, that is a tremendous plus. If not, training such as that endorsed and offered by ABCIncome.com,

http://www.abcincome.com/dtstart.html

can make the critical difference in regard to success or failure.

11. No employee hassles.

Many are often surprised at the number of people who get involved in network marketing even though they already own and operate a, “successful,” traditional business. There are two primary reasons for this: 1) Most traditional businesses do not offer residual income. Stop going to work everyday, even if just to manage your workforce, and you stop making money. 2) Employees are the both the strongest and weakest link in almost any business. And the bottom line is that few employees will care about your business as much as you do.

That’s why companies of all types and sizes always experience turnover, as people constantly leave, or are let go, etc.

Network marketing is great in this regard for two reasons: 1) Each independent representative pays their own way. If a representative happens not to make the grade, other than some investment of your time you probably won’t be out much. 2) Because they are working on THEIR own goals for growing THEIR own business, independent representatives are much more likely to have a motivating reason to achieve, as opposed to a regular employee who, again, probably isn’t likely to care about your business anywhere near as much as you do.

12. Earn as you learn.

#5 above emphasizes the ability to earn immediate up-front income; but this point is referring to something slightly different. There is an old saying that, “Rome wasn’t built in a day,” and, in most cases, neither is it realistic to expect to learn everything that you will need to know immediately. Unless you’ve already worked a very similar business before AND already have a similar customer and representative base, there will be a learning curve.

In other words, you should expect to earn LESS when you first start and MORE as your learn better techniques, gain more experience, etc. Again, if you have prior experience then your learning curve and earnings will be accelerated accordingly.

Some opportunities are very unforgiving to those who have not yet become masters of marketing a particular product or opportunity, while other opportunities allow even new people still in the learning curve a realistic opportunity to earn.

Additionally, many compensation plans include the opportunity for you to get paid to train others once you’ve learned enough about the company and its products and services. Part of your assessment of any opportunity should be whether or not they have an effective training system in place, and whether or not it offers sufficient compensation to motivate people to want to be trainers. Because, without readily available training an organization is far less likely to achieve maximum growth.

13. Well established company.

Like others, this point is also stressed throughout ABCIncome.com. However, though it is being mentioned near the end of this list, in my experience it is not only one of the most important points, but it is one of the things that I am asked about most often.

This is also one of the areas where I find that people will most often ignore good advice. This isn’t just advice coming from Phil Covington and ABCIncome.com, but advice that has been proven for decades, if not centuries, and that you can readily confirm for yourself very easily, including by checking data available from the SBA (Small Business Administration).

Well proven statistics show that most new businesses fail within the first 5 years. In the network marketing industry that rate is even higher within the first 1 to 2 years. So, statistically, there is as high as a 90 percent chance that a newly formed network marketing company will not last for the first 2 years, and is lucky if it makes it to 5. That means that with a brand new company your chances are 8 to 9 out of 10 for failure, and only 1 to 2 out of 10 for success!

When I tell people this, often, they will next want to tell me all about how the company has an, “experienced management team.” Guess what? That doesn’t make anywhere near as much difference as you might be think it does. Yes, an experienced management team gives a company a better chance, but it absolutely does not guarantee future results in a NEW venture, even if the same people have been successful before in other types of ventures.

Every new business is different, that’s why it’s called, “new!” From my decades of experience in consulting, and working with systems and businesses ranging all the way up to the Fortune 500, I know that one thing has been well proven, and that is that past performance in ANOTHER VENTURE does not guarantee future results IN A NEW VENTURE, ESPECIALLY WHEN YOU ARE WORKING IN A NEW AREA, and/or especially with new and unproven products and/or services.

Maybe you remember a company called, “Iridium?” It literally went into marketing industry lore and business schools’ history books as one of the most spectacular failures of a, “new,” business in business history, despite being backed with more money than any other new business startup, and having an all-star team of the very best business minds and executives.

Iridium was the developer of the first satellite phone and corresponding series of Earth orbiting satellites needed to make it work.

Wharton School marketing guru Leonard M. Lodish is just one of many who have used Iridium over the years as an example of the risks associated with a new venture, and what can go wrong, even when it seems, at first glance, that everything was done right.

So, if you’re considering a new startup company and you feel that it will defy the odds because the people behind it have been successful in business before, think about the people AND companies that were behind Iridium. They were all seasoned pros. The best of the best. Ever heard of Motorola? Well, that was just one of numerous big industry players that backed Iridium.

Next you might be thinking, but this new company is, “well financed.” Iridium was backed by more funding than any other new business startup in history, to the tune of $5 BILLION dollars! Wouldn’t you love to be able to start a new business and have $5 billion dollars to play with? Even that much financial backing, however, did not allow Iridium to defy the statistical odds.

There is universal agreement among marketing experts that a number of major key mistakes were made with Iridium. Because, by all rights, “everything had been done right,” it should have worked. However, even if everything literally had been done right there was still no guarantee that that particular business plan would have worked at that particular time.

Eventually Iridium went bankrupt having never even really gotten off of the ground and running. Its assets were purchased for pennies on the dollar, and eventually Iridium became a supplier of secure satellite services to the U.S. government. Meanwhile, other companies, having learned from Iridium’s mistakes, stepped in to fill the satellite phone market.

And keep in mind that while Iridium is perhaps the most spectacular example, it is not the only one. There are many others. And that’s no surprise, because, again, the statistical odds are that most new businesses fail. Therefore, if you choose to go with a new company you are absolutely stacking the statistical odds against you from the very beginning.

If you are in the process of evaluating companies to choose which one to become involved in, try to pick a company that has been around for at least a few years; in general, the longer the better.

One other thing that people often make a big point of is, “getting in on the ground floor,” of a new opportunity! But that’s a complete myth too!

If you want more information on why choosing a new company is risky business, AND if you want to learn the criteria for when IT IS OK to choose one, please refer to these two articles:

Wave Opportunities Catch The Wave?
http://www.abcincome.com/wave-opportunities.html

The Ground Floor Opportunity Myth!
http://www.abcincome.com/ground-floor-opportunity-myth.html

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This is the first article on ABCIncome.com where I am introducing a disclaimer, something commonly seen on many sites. Please visit the link below to read it:

http://www.abcincome.com/disclaimer.html

Ok, so if you did visit the link above and you read what is there then you’ll know that even though 95 percent of the information on ABCIncome.com is free, not all of it is publicly accessible, nor do I make all information available in that way. If you want more than what is here (either more detail on the above, or more of the points that are not listed below) you’ll have to enroll in one of our programs. However, I will provide you with short versions of two more important points:

14. Avoid products and services that people don’t already understand and/or that require a lot of education and explanation in order to get people to understand.

You may literally have THE BEST PRODUCT IN THE WORLD, BUT if people don’t understand it, or its advantages, they are unlikely to buy it, at any price, period! Whenever possible choose products and services to market that are easy for the average consumer to understand and/or learn about.

15. Be especially careful when you are dealing with health, wellness, and nutritional products.

And please keep in mind that this is coming from someone who is a HUGE advocate of natural health and wellness, and someone who spends as much as $400 to $600 each month on nutritional products. So, do not misinterpret this as me saying that you should not market health and wellness products. That’s not what I’m saying. What I am saying, however, is that the health and wellness area requires special knowledge and handling. It is also an area that is subject to more fluctuations in monthly residual income that some other markets, due to the reasons that you can learn about in my article titled,” The Myth Of AutoShip:”

http://www.abcincome.com/autoship-myths.html

In addition to the fact that it can be difficult to have your customers continue to make consistent purchases month after month, the health and wellness area requires special handling for four additional reasons:

a) A questionable ingredient or advice contained within your company’s product or service could, hypothetically and potentially, cause, at minimum, that product to be recalled and/or banned, and at worst cause your company to be shut down almost overnight by the FDA. This has actually happened with numerous network marketing companies.

b) Changes in industry guidelines could cause an ingredient or advice being used by many companies in the industry, including yours, to, at minimum, be recalled and/or banned, and at worst cause your company to be shut down almost overnight by the FDA. This is exactly what we saw happen with the ingredient Ephedra, which used to be in many popular weight loss products. You may read more about it on the FDA’s Website here:

http://www.fda.gov/oc/initiatives/ephedra/december2003/

c) Exaggerated claims made either by your company, other representatives, or you, may cause actions similar to the above, with very negative consequences. So, be especially careful to make sure that your company is in compliance in all such areas, that they strictly extend the enforcement of that compliance to their representatives, and that you also comply with any and all applicable federal or state guidelines for the marketing of such products and/or services.

d) Both your company, and possibly you, may potentially be held liable (you could be sued) for negative side effects experienced by users of the product. This last point is really the trickiest one, and numerous companies over the years, including some of the largest in the industry, have been affected by it.

The simple truth is that people are born and die every day. Therefore, it only stands to reason that, if enough people are using your product, whatever it is (it could, just for example’s sake, be distilled water), some of them will die while using your product. Again, their death may be completely unrelated to your product. However, especially in the litigious society in which we live, that doesn’t stop someone who suffered serious consequences, if still living, or the family of someone who died, from filing a lawsuit. Sometimes in such cases it can be proven that a person’s health problems and/or death was unrelated. Other times, however, the ruling goes the other way. There is really no way to know when such issues when arise, or how they will turn out.

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In ending I’ll simply repeat the fact that the above criteria are WELL proven over decades, so I do hope that you will put them to good use. As mentioned earlier I’ve noticed that people often choose to ignore good advice.

One of these days I may write an article comparing falling in love to the process of evaluating a business opportunity or purchase, because there is one huge similarity… Once someone falls in love with a prospective spouse or mate their mind can seldom be changed, even if huge red flags start popping up all over the place.

Likewise, I’ve noticed that, at least with certain people, once they’ve fallen in love with a particular business opportunity they often tend to ignore all logic and reason, and red flags get ignored or tuned out.

Better to do a thorough and objective analysis first whenever possible, before you’ve gotten in so far that you keep telling yourself that it’s going to work no matter what, and you expend your valuable time, money, and resources in directions that have a high likelihood of not paying off if you haven’t first done your homework.

On the other hand, choose wisely, and build your business correctly, and you can enjoy an above average lifestyle and residual income for years and perhaps decades to come!

I hope that you enjoyed this article... Also, if you have not already done so, please read the information that you'll find at the link below:

To Your Success!

Phil Covington
Founder of ABCIncome.com