          
          
          
          Take A Hard Look Before Leaping
          
          
               Indeed, investigating specific MLM companies may
          be the most important thing to do before making a
          commitment to MLM.  Spend time checking into ones
          you're considering.  You probably spend 10 or 20 hours
          a week watching television.  Isn't it worth taking that
          much time before you embark on a new career?
               How can you check into an MLM company's
          reputation?  First, find out some basic information
          about the company:
               * How long has it been in business?
               * What is its sales volume?
               * How fast are the company's sales growing?
               * How fast is the distributor network growing?
               * How cooperative is the company in providing
          information about itself?
               * Does the company belong to professional or trade
          associations, the chamber of commerce, the Better
          Business Bureau, etc.?
               * Has the company filed all the necessary legal
          documents in your state?
               After you have this information and if it looks
          promising, here are the steps you need to take:
               * Ask to speak with distributors who have been
          with the company for several years.  Talk with these
          people in person to find out if they're the type of
          people with whom you'd like to associate.  Find out how
          well these people are doing and how satisfied they are
          with the company's support and its product line.
               * Check into the company's financial situation --
          many MLM organizations have perished because of a lack
          of capital.  If you're not financially sophisticated,
          ask a friend, a relative, or professional advisor for
          help.  You want to see financial statements audited by
          a reputable firm that's not related to the MLM company. 
          Other documents to inspect are a Dun & Bradstreet
          report and a TRW credit history on the company.
               * Ask for the names of the company's major
          suppliers.  Then call the suppliers to find out if the
          MLM company makes its payments on time.
               * Make sure there are no serious lawsuits
          outstanding.  There are a lot of frivolous lawsuits
          today, to be sure, but meaningful suits against an MLM
          company can indicate an organization of which to steer
          clear.  In addition, a successful suit may wipe out a
          company's assets.
               You or your attorney can institute a pending
          litigation search through Equifax or Prentice-Hall
          Legal & Financial Service.  In a similar vein, ask
          about complaints at your local Better Business Bureau
          and your state's attorney general's office.  A list of
          complaints is not unusual, but those complaints should
          be resolved.
               * Find out if the MLM company uses state-of-the-
          art computer systems for sales organization reports,
          inventory control, sales analysis and forecasts,
          marketing projections, tax records, etc.  If the
          company doesn't, it will find it difficult to get its
          organization under control -- and difficult to generate
          accurate, timely commission checks.
               * Before you commit yourself to an MLM company,
          find out what its policy is on "frontloading."  That
          is, some companies pressure distributors to buy certain
          amounts of inventory each month; in some cases, you
          have to buy a certain amount in order to qualify for
          commissions.
               If you see this kind of operation, back off. 
          Reputable MLM companies don't use this technique, and
          they prohibit individual distributors from doing so.
               A legitimate marketing program will have no
          minimum purchase requirement and no inventory
          requirement for new distributors.  However,
          distributors who sign up usually have to meet certain
          levels of production to qualify for continued
          participation or bonus compensation.
               On the other hand, don't shy away from an MLM
          company just because most of its sales are to its own
          distributors.  Many successful MLM companies sell
          heavily to inactive distributors, people who stay in
          the company just to get discounts on their own
          purchases.  Amway, for example, sells more than 80% of
          its products internally, yet it moves more than $3
          billion a year and generates fat commissions for many
          of its distributors.
               * Ask about the backgrounds of those holding top
          management positions.  Ideally, you'll see track
          records that include success in MLM.  Failing that, the
          company's founders should have records of success in
          other areas of the business world.  MLM corporate
          officers should be working with the company full-time,
          not part-time.
               * Naturally, the product line deserves careful
          scrutiny.  A one-product organization is risky,no
          matter how good that one product may be.  Suppose a
          competitor introduces a better or cheaper alternative? 
          Look for a diversified product line, with many
          selections for buyers to choose among.
               What's more, a company selling vitamins,
          cosmetics, pots and pans, etc. will have a lot of
          competition -- it will need to be truly superior to
          survive.  Companies with unique product niches may have
          a better chance of success.
               You should be looking for a company that
          continually introduces new products.  For example, Nu
          Skin International recently developed an odor-fighting,
          anti-bacterial agent for deodorants that was issued a
          patent by the U.S. Patent Office.  The company is now
          selling a "time-release" deodorant using this agent, a
          deodorant that has been positively mentioned in trade
          magazines.
               * You should also look for an MLM organization
          that supports its distributors.  How?  The parent
          company might run ads in national publications,
          promoting a great business opportunity.  Then, the
          leads that are generated are turned over to the closest
          distributor.  With this process, you'll have a steady
          stream of prospective recruits who have expressed
          interest in a business venture.
               What's more, a solid company will turn recruiting
          ads over to you and your distributors, so you can use them.
               Another means of support is a team of regional
          sales consultants.  If you or anyone in your downline
          has a sales problem, you can reach your regional
          distributor on a toll-free phone line.
               * Investigate the buyback policy.  Typically, a
          legitimate MLM company will buy back inventory and
          sales materials from dropout distributors, within a
          certain time period.
               * Another question to be considered is how an MLM
          company treats multiproduct selling.  Suppose you have
          built up a successful downline for a cosmetics company. 
          One of the distributors in your downline also begins
          selling for a vitamin company.  The cosmetics company,
          upon finding this out, terminates your distributor.  In
          an extreme circumstance, it might terminate you as
          well.
               If this happens, you could lose significant income
          after doing a great deal of work.  So find out what the
          company's policy is on this issue before you go to the
          trouble of building a sizable downline.
               * Sales training is crucial for an MLM
          organization.  Remember, when you look at the
          expression "multi-level marketing," the emphasis really
          is on "marketing," which means, of course, "selling." 
          To succeed, you'll have to sell new recruits on the
          program.  Then, you or your recruits or their recruits
          will have to sell the end product or service to users.
               Therefore, sales training is a must for an MLM
          organization.  Most people don't know how to sell; it's
          unfair to give them sales kits and say "Go get 'em." 
          So find out what kind of introductory sales training is
          offered, and whether ongoing sales training will be
          available.
               * What does the company's sales promotion material
          consist of?  A top-notch MLM company will provide you
          with color brochures, audiotapes and videocassettes,
          often at production cost.  Such materials will help you
          recruit distributors as well as sell to consumers.
               * Many MLM companies have internal newsletters. 
          However, many of these publications are nothing buy
          hype, touting their products and the moneymaking
          opportunity.  If you see a newsletter with practical
          tips on recruiting, selling, etc., you're probably
          looking at a serious MLM organization.
               * In addition to offering competitive commissions,
          top MLM companies also provide health benefits, auto
          allowances, and profit-sharing.
          
          
          
