What You Need to Know Before You Join An MLM

The allure of fancy cars, hot women and piles of cash has compelled many opportunity seekers to try MLM. But as many people soon find out, MLM is a business, just like a franchise store or vending business. It takes time to build a significant monthly income, and you must work hard to get there. If you're thinking about joining an MLM business, here are some things to look for before spending your hard-earned cash.

Company History

Research the history of the company. If they're legitimate, you should be able to find some information on their management team and product line. The media has also probably written some articles on them or featured them on news or television programs. Companies that have been around 10 to 40 years are doing something right. And you won't risk losing your downline because they're forced to shut down or close up shop. Search for Avon, Mary Kay, or ACN reviews using resources like the Better Business Bureau to get a good idea of their reputation.

Business Structure

In MLM, you recruit people so you can earn commissions on their efforts. It's called leveraging your time and efforts. Unfortunately, some network marketing companies focus too much on the recruiting and less on the product, which is illegal. Some general characteristics of illegal MLM structures, or "pyramid schemes," are no genuine product, promises of huge incomes, a lack of revenue from retail sales, complex commission structure and certain buy-in requirements, according to the U.S. Securities and Exchange Commission. If the company in which you're interested has any of these red flags, avoid them like the plague.

It Takes Time

Depending on the amount of time you devote to your MLM business, your earnings will be gradual. Most people try to spend the first few months covering their product costs and getting their first commission checks. Don't feel bad if you only earn $25, $50 or even $100 per month for a while. The key is that you're earnings will go up if you keep working at building your product sales. Keep your day job and work your business part-time. Then, in maybe five years, you may be earning enough to go into it full time.

Product Fit

Find an MLM company with a product or service for which you have a passion. If you're a health nut, for example, there are many nutritional MLM businesses out there. But you better like the products the company offers before you start selling them. Ask for some trial packs before you sign up. If you're considering something more high tech, realize that if takes off, some of the bigger players like Apple, Amazon or Google will notice it. And not too many MLM companies can withstand competition like that. The more passion you have for your product, the better you'll be able to sell it.

Support Systems

MLM is a people business. Find a sponsor who will help you get acclimated to the business and assist you with closing sales. You will need to do the same with your recruits via three-way calling. Your MLM company should also have a conference call system set up for training and recruiting and a website and co-op advertising system for promoting your business. The old methods of generating sales through personal meetings are fine, but it will limit you to the local market. In reality, you're going to make much more money working with a national or even international customer base.

Joining an MLM business is an exciting venture. Just make sure you know the realities of the industry before signing up, and treat it like any other business. The hard work will eventually pay off.