You can be on Entrepreneur’s cover!

Pick and Choose Want to find out if that MLM opportunity is right for you? Our expert will show you the traits to look for when choosing the right one.

entrepreneur daily

Q: I'm thinking about joining an MLM opportunity.What should I look for in a legitimate company?

A: At the top of my list is a quality product or service.So here's what you should look for in a product or service:

Exciting. If you're personally excited by theproducts and use them yourself, your enthusiasm will be your bestsales asset.

High quality. Your long-term residual income is based onthe product's ability to deliver on its promise and maintaincustomer loyalty. You'll never have to make an apology for ahigh-quality product.

Fairly priced. MLM products don't usually win as thelow-cost provider. However, high quality doesn't necessarilymean overpriced. Make sure you or your customers are comparingapples to apples when price-shopping the competition.

Lifecycle. Are you at the beginning phase of a newproduct with a viable and growing market demand?

Unique. If it's "another one just like the otherone," you'd better look for a special marketing angle thatseparates this product from the pack.

Exclusivity. Be cautious if it's available throughother channels of distribution such as retail stores, catalogs orother MLM companies.

Satisfaction guarantee. A company that doesn't standbehind its product will surely leave you embarrassed or potentiallyresponsible to your customers.

Sales aids. Make sure the company has promotionalliterature that adequately supports product benefits and promotesretail sales.

Once you've found a product or service you can believe in,evaluate the company based on your personal needs and beliefs.Here's what to look for:

Support materials. Company literature should be easilyunderstandable and provide a professional image to support yourbusiness activities.

Policies and procedures document. Read and understandwhat you can and can't do. These internal distributorregulations are designed to protect the integrity of the businessand deal with the occasional renegade distributor who can ruinthings for everyone. If the company offers no policies document,heed this as a red flag. This company either hasn't had goodMLM legal advice or doesn't plan to stick around very long.

Corporate executives. They should be committed to qualityand integrity, and have genuine concern for their distributors. Ifpossible, interview them if possible, or at least talk to othersuccessful distributors for their thoughts. Ask:

  • Does one or more have experience in MLM?
  • Are experts involved in areas of administration, financialmanagement, distribution and commissioningsoftware?
  • Has the company hired professional consultants to help in areasof weakness?

History. How long has the company been in business? Howmany countries does it operate in? How many distributors does ithave? What are its gross yearly sales? Is it well-funded? Ifit's privately held, this information might not be readilyavailable, but it's worth a try.

Compensation plan. Does it sound realistic in itspromises? When something sounds too good to be true, it usually is.Was it designed by competent experienced MLM experts? Does it fityour needs for part-time income or a full-time career opportunity?Does the plan use time-tested and proven success concepts, or areyou part of an experimental program? Look for proof of success ofthis concept as used by another MLM. Have your sponsor or a companyofficial explain it to you in detail.

Philosophy. Does it fit your style and make you feelcomfortable and proud to be part of the organization?

Sales and training meetings. Does the company or yourupline offer regular support sessions or telephone training?

Commission software provider. Did a reputable companyprovide the software that will determine your bonuses? If newsoftware has just been installed, it's not uncommon to seeglitches for a period of time that can affect your anticipatedincome stream.

Communication. Look for good communication in the form ofnewsletters, voice-mail capabilities, national conference calls anda strong Web presence using all available communicationtechnologies.

Protection. The only required investment should be anoncommissionable sales kit. All other investments should beoptional. Beware of large inventory load enticements or offers tobuy positions. In case things don't work out for you, make surethere's a buy-back policy on your unsold inventory.

Find out if the company belongs to its local Better BusinessBureau. If you have access to a credit reporting service such asDun & Bradstreet, check it out. Publicly traded companies canbe investigated through online services.

You should also contact your industry associations for anyinput. While there are many fine companies that may not belong toindustry associations, the associations are a good source ofinformation. Call the Direct Selling Association at (202) 293-5760or visit http://www.dsa.org. Youcan also contact the Multi-Level Marketing InternationalAssociation at (949) 854-0484 or visit http://www.mlmia.com.

One important thing to keep in mind: If you'reinexperienced, even selecting the right company won't assureyour success. Choosing the right upline sponsor to support you canbe equally important. Is there someone in your first three uplinelevels who has had substantial success and can show you the way?This can be your shortcut to accelerated growth and my strongestrecommendation for gaining early momentum.

Michael L. Sheffield is the co-founder and chairman of theMulti-Level Marketing International Association (MLMIA). Thisorganization represents network marketing companies, distributorsand industry suppliers worldwide.


The opinions expressed in this column are thoseof the author, not of Entrepreneur.com. All answers are intended tobe general in nature, without regard to specific geographical areasor circumstances, and should only be relied upon after consultingan appropriate expert, such as an attorney oraccountant.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

This Dad Started a Side Hustle to Save for His Daughter's College Fund — Then It Earned $1 Million and Caught Apple's Attention

In 2015, Greg Kerr, now owner of Alchemy Merch, was working as musician when he noticed a lucrative opportunity.

Business Solutions

Handle In-House Projects More Efficiently with MS Project Pro — Just $24 Through April 16

It's designed to help teams stay on task with features like management templates, timesheets, generators, and more.

Business News

I Designed My Dream Home For Free With an AI Architect — Here's How It Works

The AI architect, Vitruvius, created three designs in minutes, complete with floor plans and pictures of the inside and outside of the house.

Business News

This Fan-Favorite Masters 2024 Item Is Still $1.50 as Tournament Menu Appears Unscathed by Inflation

The pimento cheese sandwich is a tradition almost as big as the tournament itself.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Here's One Thing Americans Would Take a Pay Cut For — Besides Remote Work

An Empower survey found a high percentage of respondents would take a pay cut for better retirement benefits and remote work options.