Tuesday, August 21, 2012

7 Step Test of MLM company

Kevin Thompson, a MLM attorney, outlined 7 criteria that makes a MLM company successful. I thought... the same 7 criteria would make a great "test" whether that MLM company would work at all.

1) Leadership
2) Product
3) Design
4) Systems
5) Compliance
6) Capital
7) Field

Rate your opportunity A+ to F in each of the 7 categories, be honest, be tough. If it fails or is below average in even ONE of the 7 areas, perhaps you should consider something more... mature. 


Who leads this company? Not your upline, not the chief spokesperson, but actual executives in the company. Does he have a past? A checkered past? Did he learn from his mistakes, or can he only rehash his or her own ideas? Do this person even exist, or is it all hidden behind proxies and whatnot? If this person exists, does he have the leadership to bring this idea into fruition?


Are the products consumable? Does it have a proper profit margin so you can mark it up, AND enough for the company to earn profit AND pay you commission? What is the market price and availability? What is the demand for it?  Is the product safe? Is the product in its own niche or have plenty of competition? 


Does the packaging, the "trade dress", and overall design, look good? Good product badly packaged won't sell. Good product packaged great (like Apple) sell like hotcakes even when they are expensive. 

Does the company "culture" reward affiliates? Intellectual property design? Pay plan design? 


Does the back office, computer tracking, and so on work? Money transactions reacted to promptly? Credited, ordered, shipped, and tracked reliably? Problem tracking? Customer support? 


Does the company have a compliance department from the start, or do they not worry about the law at all? Do they have a compliance attorney / consultant? Or are they going to hire one later, thus may be operating illegally from the very beginning?  Do they have ALL of the proper licenses, procedures, and such? What sort of agreement do you have to sign when you join? Do they comply with business opportunity laws and whatnot in YOUR state? 


Do they have enough capital to burn in the initial expansion phase, when they are spending mostly money on customer acquisition? 


I.e. you, the affiliates. Is the company inspiring you toward success? Are you inspired to work hard and benefit more? 


Now total your score and calculate an average, and be honest. It's YOUR future, not mine. 

A -- are you sure? 
B -- not bad, keep looking for a little bit
C -- you can do better, keep looking
D -- you're kidding right?
F -- only a scam can score this low. 
Enhanced by Zemanta

1 comment:

  1. I would add "venue" or maybe call it "registration" to represent both legal corporate structure and where they do business. Is the address just a PO box somewhere or a real office? Is it based in the US or some country where it will be difficult for US or other western authorities to regulate. This also has impact on distributor's recourse in the event the MLM does something wrong - not just total scam situations but MLM's have made sudden changes to compensation plan, or it's later discovered that a few leaders had special privileges and compensation which then leads to class action lawsuits.