For many years, network marketing opportunities have been proven to be a legitimate way for entrepreneurs to start their own business and earn profit.  Companies such as ACN, Avon, Mary Kay, AmWay and a host of others market their products/services through a network of independent representatives who have face-to-face contact with consumers.  Word of mouth promotion has always been incredibly powerful and is more often than not the best way to move goods and services. 

Unfortunately, there have been businesses of this type that turned out to be nothing more than pyramid schemes whereby commissions would be paid to top tier representatives when new recruits were added to their downline, even if no product or service was being purchased.  In those cases, lower level distributors would spend money on their franchise fee yet not be able to recoup their investment due to an unreliable/low grade product or service, that they couldn’t find customers for.  These MLMs were illegal and tarnished an otherwise honourable business model’s reputation.  

In MLM, as with any kind of sales or marketing, you must believe in what you are selling. Never get behind a product/service without first finding out if it is legit, and never fall for schemes selling products/services/business opportunities that make impossible promises. For example, beware of miracle products that promise instant results for wealth, weight loss, acne treatment, muscle/energy building, eternal youth, etc.

Try out the products or speak to reliable sources that have. Corporate testimonials will obviously be biased (even if completely true), so it is wise to do your own research to validate the claims.  Ask yourself if people will really buy what you are marketing, and if it is reasonably priced.  Make sure that the MLM you are joining only pays commissions when merchandise is actually moved, not just when new recruits sign up.  Selling a theoretical business opportunity is illegal.  It must be proven that the company’s wares are legitimate and are being distributed in order for revenue to be generated from which commissions can then be paid out.

Take the time to understand the federal/regional regulations and consumer rights as well. Make sure that there are no complaints against the company with the Better Business Bureau, Federal Trade Commission, and/or Consumer Protection Agency.  Also, watch out for companies that promise big earnings and instant success. If something sounds too good to be true, it most likely is. Stay away from any franchise opportunity that requires representatives to purchase a large amount of inventory to get started.

With the many options available, along with the general stigma that has for the most part wrongly been associated with network marketing, people may have difficulty deciding which MLM businesses are legitimate and which are not. The easiest way to gather as much information as possible before making any commitment would be to talk to people you trust who are, or have been in network marketing. If you don’t know any such people, you should visit various companies’ websites to see what they are about.  Visit online forums to hear what others have to say about their experiences.  Watch out for recruiters, both online and offline. These people will be eager to find distributors because they are getting paid to do so. They will always paint an over hyped, rosy picture of their business.  Avoid these phonies at all cost!  

Before signing on the dotted line, make sure you are comfortable with the expectations of the company. Remember that part of the job with network marketing companies will involve working with others one-on-one, as well as having to push a product/service/business opportunity in various settings. Therefore, marketers need to keep in mind that there will be some pressure from the company to meet the minimum sales requirements and to make commissions. Take the time to read over your contract and never sign on the dotted line under pressure. If you can, talk to other MLM distributors and ask them about what to expect in the work and how they manage their time and energy. 

In recent decades, MLM has gotten a bad reputation due to several dishonest companies and unfortunate incidents.  One has to keep in mind though, that no industry is immune to this and network marketing is no different, and no worse.  Also, quite a few people who joined network marketing companies and did absolutely no work, while expecting to magically become rich have gone around unfairly trashing the business.  This still happens and should never cloud your judgement.  On the flipside many people have made a reasonable income in legitimate multi level marketing firms. The key is to find a good product/service with a company that is nationally known and reliable. Once you have a winner, it will only be a matter of hard work, time, and patience before your franchise is a winner as well.

Gopal (The Musical Mad Scientist and Entrepreneur)

I am the musical mad scientist. I have a Masters in Biochemistry, drum in the rock band “the Integral” and have my own Marketing Company. Nice to meet you!

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