Given the current economic climate, the concept of creating “multiple streams of income” makes a lot of sense. One of the best and most cost-effective ways of accomplishing this goal is to start a network marketing (also referred to as multi level marketing, and social marketing) business. The advantages are: 

• Low operating cost
• Duplicable Success System
• Mentoring/Coaching from established leaders
• Ability to purchase products for personal consumption at reduced costs
• Use of financial leverage
• Creation of Residual Income
• No cap to income potential
• No employees
• No or limited inventory
• Geographic portability
• Flexible hours

With thousands of potential opportunities in the network marketing space, how do you pick the right company for you? Here are ten tips for making a great decision:

1. Ten Years Old (or older) – It has been estimated that over 50,000 network marketing companies have started in the United States since 1956. Interestingly, only 54 companies have been in business for over ten years and are still in business today! The ten-year mark seems to be a good indicator of whether a company will truly stand the test of time.

In addition, an established company tends to have everything in place such as a quality product line, systems, distribution, legal/compliance, technology, etc. Ideally, you get to just come in and build.

If you want to create true long-term residual income, go with an established company that has passed the ten-year mark.

2. Ownership/Company – In a perfect world, you will find a company that has highly experienced owners who have extensive personal experience in all key areas of operation – executive management, product creation, and field sales development. Ideally, the company will also have a highly seasoned team of multi disciplinary specialists rather than being a “one man/woman show.” Do the owner’s work well together or are there “power struggles?”

Also, what do you see when you search the company and owner’s names online? Do you see backgrounds of success in previous businesses or unwanted baggage such as old legal and public relations issues? What is the growth trajectory – in expansion or retrenchment mode?

Ask questions about the company’s financial status. Are they stable?

Do they have significant long-term debt?

3. Products – The company’s product mix and quality is one of the most important aspects to review when considering involvement in a potential network marketing company opportunity. To create true residual income your goal is to build a large network of consumers who frequently reorder the products. Therefore, the product line should be:

• Consumable – products that people will buy, use up, and reorder.
• Top Quality – the higher the quality of the company products the less you will have to deal with product quality, integrity, or ingredient questions.
• Are consumers already using these types of products? – A strong network marketing company focuses on “redirecting” the spending of a consumer’s typical purchases. The more the consumer is already using the types of products the company distributes, the easier it is to encourage the consumer to buy those types of products through the new company system.
• Easy to implement into routine – Are the products highly complicated or do they require extensive education to use? The ideal product mix should fit easily into a new associate’s lifestyle.
• Creation of strong personal stories – Network marketing success is dependant on how many people in your organization are actively sharing their experiences with the company’s products. Therefore, the better the product experience they have, the more they will tend to share their results. In a perfect world, the company products will create highly emotional and deeply personal product stories. Ex: if one of your team members has a life changing or even life saving product experience, they will be highly motivated to tell others about it.
• Affordable/Reasonably priced – Are the products priced correctly? Are they affordable and within the range of what the associate has already been spending for similar products in the past?

4. Success System – The primary goal in building a profitable network marketing business is to create a large and highly motivated consumer network. For this to occur, it is vital that a highly defined, yet simple to execute “success pattern” is in place.

McDonalds’s is a great example of a company that has a clearly defined success system. Every aspect of the operation has been time tested for effectiveness, down to the precise placement of the pickles on the hamburger.

To test the effectiveness of a company’s duplicable success system, we recommend “The Alaska Test:” Could a new team member who lives in Nome, Alaska, and who is fifty levels below you, effectively build a large international team with no direct assistance from you? If not, the company you are looking at does not have a clearly enough defined pattern of success.

Also, will the leaders of the organization you are planning to join be available to actively assist and mentor you on your success journey?

5. Compensation Plan – There are several types of compensation plans utilized in the network marketing industry. Each plan has stand out features and limitations.

Ask these important questions:

• What percentage of the total product sales is paid back to the field? Less than 35% or more than 50% would be considered questionable.
• Is the compensation plan “balanced” so that there is adequate upfront, middle, and back end commissions paid out?
• How many times has the basic foundation of the compensation plan changed? If there have been many iterations of the compensation plan, that could indicate that the company is still “experimenting” to see what works best.
• Are there “hidden gotchas?” For example, has a certain type of payout structure (such as a binary cycle payout amount) consistently lowered over time? If so, that is not a healthy sign.
• What percentage do the top leaders earn on their team’s overall sales volume? Simple test: divide the top leader’s annual income by their team’s annual sales volume. If the “team payout percentage” is less than five percent that could indicate the company’s payout percentage is too conservative.
• How many millionaires (accumulated career earnings with the company) has the company created?
• Does the compensation plan pay daily, weekly, monthly, and yearly? As an example, if a company only pays monthly, a new associate may have to wait up to eight weeks to receive their first paycheck.
• Does the plan create momentum and a sense of urgency?

6. Marketing Tools – Prospects will tend to judge your opportunity by the “cover of the book,” which is the company’s marketing tools. It is very important that the first impression is a good one! Here are some important questions to ask:

• Does the company have high quality, state of the art marketing tools that are captivating, exciting, and motivate your prospects to join?
• Is the image presented current and vibrant or dated?
• Does the company offer an easy to use, replicated associate website?
• Is the company marketing/focus/brand awareness targeted to a narrow demographic (Ex: 18-30 or 60 plus) or would the image appeal to a wide variety of potential prospects? Ideally, you want to create a large team that is diverse demographically. If the current company marketing focus is too young, you might not be building a stable business. If the focus is too old, you might not be building a sustainable business that will pay you for several decades to come.
• Does the company offer “recruiting systems” to help you reach potential prospects that are outside of your warm market?
• Does the company have targeted marketing tools to help attract specific demographic groups or markets?
• Are the marketing tools available in multiple languages?
• What is the cost to access the marketing systems? As an example, some companies charge over $50 per month to use the marketing tools in addition to the cost of the products.

7. International – According to the World Federation of Direct Selling Associations, the international direct selling market is approximately $132 billion dollars per year. North America accounts for only about $31 billion dollars, or 24% of the total sales. Some large United States based direct sales companies report that only 5 to 10% of their total international sales volume is produced domestically. Building a team in multiple countries also makes sense from a diversification standpoint. Therefore, it is very important that the company you are considering aligning with has a large international presence. Ask these key questions:

• Do company products have an international appeal?
• How many international markets is the company now in?
• What are the company’s plans for future international expansion?
• Does the company have fully staffed local offices and maintain the appropriate business and product licenses for each country they are in or do they simply ship products to those countries (“virtual” or “not for resale” markets)?
• Are the company websites/tools/product labels translated into the language of each company they are in?

8. Sponsor/Support Team/Organization – One of the most important factors in your ultimate success with a network marketing company is both your personal sponsor and the support team, or distributor field organization, you are part of by way of your line of sponsorship. Ideally, you will learn the majority of the key business information from your support team. Ask these key questions: 

• Does your sponsor plan to be an active builder in the company?
• Is a strong distributor support team in place?
• Are the team leaders actively building the business now (“setting the pace”) or are they in “maintenance mode?”
• Will you have direct access to top leader/mentor support?
• Are the leaders available to help you build when you join or only when you attain a certain level within the compensation structure?
• What are the leaders’ track records of success?
• Does the success team offer national training and opportunity presentations via conference calls or the Internet?
• Are there just a few leaders doing well financially or are many succeeding financially?
• Is there a highly defined success system?
• Are the leaders available to help you do 3 way calls, “coffee shop” meetings, or live events with your prospects?
• Is there a strong distributor recognition program?
• Does your success team offer social media training/coaching?
• Does your support team offer a lead program?

9. Culture – Webster defines “culture” as a way of thinking, behaving, or working that exists in a place or organization. Every network marketing company has a certain “feel” that is unique to that organization. What is the feeling you get when you read the company literature, view information online, or attend company events?

• What is the feel of the company (Ex: “professional,” “hype,” “materialistic,” or “fun”)?
• Would you feel comfortable introducing your prospects to this environment?
• Is there a focus throughout the organization on helping people make money?
• Are leaders and team members “products of the product?” If you are considering a health and wellness company, do the team members look fit and healthy?
• Is the organization diverse?
• Do you get the sense that major industry leaders are coming to or leaving the company?
• Are the events exciting, motivating, and professionally produced?

10. Social Media Presence – In our current “Information Age,” it is important for companies to be leveraging technology effectively.

• Is the company actively pursuing a major social media strategy?
• Does the company have a separate department that oversees social media?
• Is the company progressive in their use of technology and do they evolve easily as technology changes?
• Does the company offer social media technology/training to field associates?
• When you search the company name online, can you easily find information on their products and/or services?

Summary:

Hopefully, these ten tips will enable you to do proper due diligence as you review potential network marketing opportunities. It is important to not just go with the first program you are exposed to, or to make an emotional decision based on a particularly exciting business presentation.

With hundreds of companies to choose from, it is important to have a screening process to help you filter which is the best company for you. Create a list upfront of your most important company attributes (ex: excellent products, 10 years in business, professional culture) and stick to your guns through all of the emotional sales appeals. It is also important to interview key company leaders to make sure you feel comfortable with the company culture and to verify that you will get the individual attention you need.

Your decision of which network marketing company to join is a very important one. Potentially, a right decision could help you and your family to enjoy a lifetime (or beyond if willable) of residual income, great friendships, amazing travel opportunities, and financial security.