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  1. #1
    Join Date
    Apr 2006
    Location
    Sonora, KY, USA
    Posts
    3

    How To Do Your Due Diligence In MLM

    I'm new to this forum so I'll introduce myself here, even though you can find more about me reading my profile.

    My name is Scott Lucas and I'm 27 years old. My wife, Laura, and I have been married since Oct. 2001 and I've been in Network Marketing since Oct. 2000. Like everyone else here - give or take a couple people - we've had our ups and downs, trials, made mistakes, horror stories, etc.

    From my past and present experiences with 8 MLM companies and 1 Direct marketing company, I've learned how to do my own due diligence looking at MLM and other business opportunities. This is what I do and it may help others looking at MLM.

    The first thing is to read a MLM company's "Policies And Procedures" (aka. Distributor Agreement) This is YOUR contract on how to do the business. These are the requirements the company has put on you to perform. If you are found violating the P&Ps, you'll be terminated. I've read some where they say "...company reserves the right to terminate distributor with or without cause as they deem necessary..." There are certain red flags to look for such as words like "ongoing, regular, continued" which (if you look in the dictionary for their meaning) mean - you can NEVER retire!

    So read your company's Policies And Procedures. If you don't know where these are, look in your back office or on the website. If you can't find them in these places, THAT is a red flag. Email me and I'll help you find them.

    The second thing is to Google the company's corporate staff. Have they ever built an organization, a downline? If they've never built a downline, what have they done in the past? Also, if they've NEVER been in MLM, built a downline... would you really want to join the company??? Google the company. Google the product.

    So the second step is to "Google" them :) Become a critcal thinker, a private investigator.

    The third step, and final for right now, is to ask yourself this ONE question:

    How many CUSTOMERS (not downline members) do I need to earn $500 a month in residual monthly income? $1,000 a month? $2,000 to $10,000 a month? When you figure out that number, ask yourself if it's realistic for you and the people you sponsor to reach it. If it's not, you'll know what to do.

    I see 99.99% of MLM companies promoting how much money you can make from recruiting and sponsoring. :mad: THAT PISSES ME OFF!! Sorry for my language Mods.

    Imagine you're retired and on the beach with your spouse and kids. If ALL you've been doing is recruiting and sponsoring, and you've NEVER RETAILED your product/service... do you really expect to be retired? You'd have to "come out of retirement" because all you'll have is a bunch of distributors recruiting, recruiting, recruiting when they SHOULD be retailing, retailing, retailing!

    If this makes sense, I'm happy for you. If this doesn't, just respond or email me so I can help you become a critical thinker.

    To Our Success (and Due Diligence),

    Scott & Laura Lucas
    270-369-0180 whenever
    scott@mlm-whistleblower.com

  2. #2
    Join Date
    Feb 2006
    Location
    Social Breakout villa
    Posts
    112

    Re: How To Do Your Due Diligence In MLM

    ALWAYS build a great team then if a company terminates you...take the team with you.Please list me the mlms that have Policies&procedures you think are THE best for the reps.A top 10 list would be great. success2u buzz

  3. #3
    Join Date
    Apr 2006
    Posts
    7

    Re: How To Do Your Due Diligence In MLM

    If the company is all about recruiting, then be careful. There needs to be a balance netween product sales and recruiting.

    Also, look at the product or service itself. Would you buy this at the price they are selling it at... even if it didn't have an income opportunity attached? Would others? If the product is something that people won't buy (i.e. overpriced, no demand, poor quality, etc.), then don't bother joining.

    Also, be wary of any company that asks you for money so you have the right to sell their products! Now, there are legitimate reasons why you may have to invest some money to be an agent, but make sure you actually get value from it and its not just a way to make your upline money.

    I'm not going to mention any specific companies, but let me give you an example of a good opportunity and a bad one. These are based on real companies in the market, by the way.

    Company A: Sells reasonably priced long distance, costs about $300 or more to become an agent, and pays you 1% to 2% commission on personal sales, pays less than 1% of your downline's sales several levels deep... once you qualify.

    Company B: Sells very competitively priced long distance, costs nothing to become an agent, pays 6% to 12% commission on personal sales, pays 1% of downline's sales several levels deep... and during the first 6 months, you have no quotas to fill, after 6 months, you must have $100 in sales a month to qualify for commissions.

    Hmmmm. Which one looks better to you?

    What I can't understand is why Company A wants me to pay over $200 to sell their long distance when their commissions suck! Whereas Company B doesn't charge me a dime to be their agent and pays me 3 to 6 times the commission!

    Well, actually I do understand why. Company A is all about recruiting, while Company B is all about the products/services with recruiting being a way to mutiply your efforts. In Company A, you make more money recruiting than you do on product sales. In Company B, you make money in product sales AND you make money on you downline's product sales... BUT you do not make any money simply for recruiting someone... you only benefit if they sell something.

    Company A is the type of opportunity you should avoid, whereas Company B is the type of opportunity that would be good to join.

    Insummary, avoid any company that's all about the recruiting. It's bad news, and could be borderline illegal.
    Last edited by WisTex; 04-27-2006 at 09:14 AM. Reason: Fix some typos

  4. #4
    Join Date
    Apr 2006
    Posts
    480

    Re: How To Do Your Due Diligence In MLM

    Let me guess,

    Your going to "blow the whistle" on all those bad MLM...and the good news is you now found the "one" that truly works

    Or

    Your can help me by ....selling me something


    How do expect people to trust you if your not even a little honest? Typical mlm smoke and mirrors.

    Oh and as a what is it a 9 time loser in 6 years? how are mlm working out for you?

  5. #5
    Join Date
    Apr 2006
    Posts
    7

    Re: How To Do Your Due Diligence In MLM

    Notice that I did not mention any company names, and I will not mention any. I wrote the post that way so that it would be untainted by promotion.

  6. #6
    Join Date
    Apr 2006
    Posts
    480

    Re: How To Do Your Due Diligence In MLM

    I was talking about the first post not yours

    email me so I can help you become a critical thinker.
    And this line mostly

  7. #7
    Join Date
    Apr 2006
    Posts
    480

    Re: How To Do Your Due Diligence In MLM

    email me so I can help you become a critical thinker.
    No need to email me I will tell you for free now, if need other people to do your mlm thinking your going to lose lots of cash no matter which one you join.

  8. #8
    Join Date
    Apr 2006
    Posts
    7

    Re: How To Do Your Due Diligence In MLM

    Quote Originally Posted by wazzaa
    I was talking about the first post not yours
    Quote Originally Posted by MLMWhistleblower
    email me so I can help you become a critical thinker.
    And this line mostly
    Oh! I thought you were talking to me. :) That explains things.

    I didn't come here to promote. I actually came here to see if a particular program was a scam. I do find it amusing that people are promoting their websites and businesses on a website dedicated to exposing scams. :rolleyes: Thought I'd add my 2 cents while I'm here though. :D

  9. #9
    Join Date
    Apr 2006
    Posts
    480

    Re: How To Do Your Due Diligence In MLM

    Oh! I thought you were talking to me.
    My fault I should have made that clear.

    Lots of mlm seem to churn members, I guess they are hopping to catch the crumbs

  10. #10
    Join Date
    Nov 2004
    Posts
    1,251

    Re: How To Do Your Due Diligence In MLM

    Quote Originally Posted by WisTex
    If the company is all about recruiting, then be careful. There needs to be a balance netween product sales and recruiting.

    Also, look at the product or service itself. Would you buy this at the price they are selling it at... even if it didn't have an income opportunity attached? Would others? If the product is something that people won't buy (i.e. overpriced, no demand, poor quality, etc.), then don't bother joining.

    Also, be wary of any company that asks you for money so you have the right to sell their products! Now, there are legitimate reasons why you may have to invest some money to be an agent, but make sure you actually get value from it and its not just a way to make your upline money.

    I'm not going to mention any specific companies, but let me give you an example of a good opportunity and a bad one. These are based on real companies in the market, by the way.

    Company A: Sells reasonably priced long distance, costs about $300 or more to become an agent, and pays you 1% to 2% commission on personal sales, pays less than 1% of your downline's sales several levels deep... once you qualify.

    Company B: Sells very competitively priced long distance, costs nothing to become an agent, pays 6% to 12% commission on personal sales, pays 1% of downline's sales several levels deep... and during the first 6 months, you have no quotas to fill, after 6 months, you must have $100 in sales a month to qualify for commissions.

    Hmmmm. Which one looks better to you?

    What I can't understand is why Company A wants me to pay over $200 to sell their long distance when their commissions suck! Whereas Company B doesn't charge me a dime to be their agent and pays me 3 to 6 times the commission!

    Well, actually I do understand why. Company A is all about recruiting, while Company B is all about the products/services with recruiting being a way to mutiply your efforts. In Company A, you make more money recruiting than you do on product sales. In Company B, you make money in product sales AND you make money on you downline's product sales... BUT you do not make any money simply for recruiting someone... you only benefit if they sell something.

    Company A is the type of opportunity you should avoid, whereas Company B is the type of opportunity that would be good to join.

    Insummary, avoid any company that's all about the recruiting. It's bad news, and could be borderline illegal.
    hahaha... company A sounds like ACN and company B like Cognigen... am I right?
    I do not believe that MLM/Network Marketing is a bad business model. I believe it's the shady people in MLM that make it LOOK bad. As long as you work hard, run your business ethically, and work with ethical people, then MLM can help you reach your financial goals... whether it's just to make extra money on the side or a full-time income.

    "Never argue with an idiot. They just drag you down to their level and beat you with years of experience."

    Pink Zebra Sprinkles

  11. #11
    Join Date
    Nov 2004
    Posts
    1,251

    Re: How To Do Your Due Diligence In MLM

    Quote Originally Posted by WisTex
    Oh! I thought you were talking to me. :) That explains things.

    I didn't come here to promote. I actually came here to see if a particular program was a scam. I do find it amusing that people are promoting their websites and businesses on a website dedicated to exposing scams. :rolleyes: Thought I'd add my 2 cents while I'm here though. :D
    I don't see what's so amusing about that.

    I've been on this website long enough to know that not only are people here to find out what companies are scams.. they're here looking for ones that AREN'T scams. Think about it.
    I do not believe that MLM/Network Marketing is a bad business model. I believe it's the shady people in MLM that make it LOOK bad. As long as you work hard, run your business ethically, and work with ethical people, then MLM can help you reach your financial goals... whether it's just to make extra money on the side or a full-time income.

    "Never argue with an idiot. They just drag you down to their level and beat you with years of experience."

    Pink Zebra Sprinkles

  12. #12
    Join Date
    Apr 2006
    Posts
    480

    Re: How To Do Your Due Diligence In MLM

    they're here looking for ones that AREN'T scams. Think about it.
    I did think about and they ALL are unsound at best even the few that are not total scams

  13. #13
    Join Date
    Feb 2006
    Location
    Spot-on-the-map
    Posts
    64

    Re: How To Do Your Due Diligence In MLM

    Quote Originally Posted by wazzaa
    I did think about and they ALL are unsound at best even the few that are not total scams
    No offense, but how?

  14. #14
    Join Date
    Nov 2004
    Posts
    1,251

    Re: How To Do Your Due Diligence In MLM

    Quote Originally Posted by wazzaa
    I did think about and they ALL are unsound at best even the few that are not total scams
    That may be your opinion, and you are allowed to have it... but I was just pointing out that there ARE people who come here to look for legitimate opportunities.

    I also want to point out that I don't agree with your opinion. Take Avon for instance... that's an MLM. It's also a 120 year old company that is doing business in well over 100 countries. Would you say that is unsound?
    Last edited by April47; 04-27-2006 at 10:35 PM.
    I do not believe that MLM/Network Marketing is a bad business model. I believe it's the shady people in MLM that make it LOOK bad. As long as you work hard, run your business ethically, and work with ethical people, then MLM can help you reach your financial goals... whether it's just to make extra money on the side or a full-time income.

    "Never argue with an idiot. They just drag you down to their level and beat you with years of experience."

    Pink Zebra Sprinkles

  15. #15
    Join Date
    Apr 2006
    Location
    Sonora, KY, USA
    Posts
    3

    Re: How To Do Your Due Diligence In MLM

    Quote Originally Posted by wazzaa
    Let me guess,

    Your going to "blow the whistle" on all those bad MLM...and the good news is you now found the "one" that truly works

    Or

    Your can help me by ....selling me something


    How do expect people to trust you if your not even a little honest? Typical mlm smoke and mirrors.

    Oh and as a what is it a 9 time loser in 6 years? how are mlm working out for you?
    First of all, don't you EVER insult my intelligence!!! I went through 9 companies to figure MLM out so don't knock me for going through the motions!!! At least I tried. Don't bother posting if all you're going to do is insult me. It's rude... YOU ARE RUDE... you're also probably a Red "A" Type personality.

    I didn't come here to receive OR give insults. I came to this forum to educate... to teach what I've learned from the mistakes I've made and what I've done to correct them! I make my money from my Network marketing company - the way it should be -not from "selling" how-to stuff.

  16. #16
    Join Date
    Apr 2006
    Location
    Sonora, KY, USA
    Posts
    3

    Re: How To Do Your Due Diligence In MLM

    It's really a matter of picking a company and investigating them. I don't have a list of the "top 10" just because I wouldn't want to hurt anyone's feelings publicly if I mentioned company names. Privately is another matter.

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