Success Factors for Evaluating a Network Marketing Business

1. TRACK RECORD: Minimum 5 years in business (1 in 1000 make it to 5 years). Investigate sales growth, income figures, market share, training already provided – actual facts, not promises. Check with Officer, Marketing Practices Branch, Bureau of Competition Policy, Industry & Science Canada,US Chambers of Commerce in the USA.

2. STRONG MANAGEMENT TEAM: Track records of company leaders – do they bear close scrutiny? What other companies have they worked for and what kind of reputation have they acquired? Look for people with management experience in large Fortune 500 type traditional companies versus former distributors of another MLM (they may not exist anymore).

3. FINANCIALLY SOUND/DEBT FREE: Check theirDun & Bradstreet rating. Check with others already in the company for promptness of commission checks (lateness is a sure sign of cash flow problems).

4. NO BREAKAWAYS: Breakaways do not promote people helping people. When somebody in your down line is successful, you lose with a breakaway plan because their entire group’s sales no longer count toward your total and commission. Breakaways can actually drive people into bankruptcy because of the loss of income or they buy inventory to maintain their quotas.

5. UNIQUE CONSUMABLE PRODUCTS OR SERVICES: Are the products an improvement over what the customer can get on the traditional market? Are the products unique and protected by patent or trade secret? Are they products the customer will use every day and run out of every month? Are the services unique or will your customers switch to the next company that comes along with a better deal. In other words, are the customers loyal to the products or service?

6. COMPETITIVELY PRICED: Do the products give good value? Compare cost per use or cost per application versus cost per weight or volume unit. Does the customer have to find “new” money for these products or can they simply divert existing expenditures. Check the percentage of people who join the company just to purchase the products will give a pretty clear indication of product value for the cost.

7. LOW MAINTENANCE: Look for no inventory (therefore no front end loading), no repeat selling, no billings, no collections, no pick ups, and no deliveries. Check out the company’s computer system capabilities to reduce paperwork to aminimum. Look for toll free numbers and electronic payments systems for orders to minimize paperwork time, banking time and charges for phone calls, money orders etc. Is the system simple enough for anyoneto order from and do as a business, whether handicapped or busy, young or old?

8. HIGH REORDER RATE: Look for a high reorder rate every month on a consistent basis or you won’t make any money from hundreds of people in your down line who aren’t buying anything! The average reorder rate for most companies is 12-15%!

9. LOW ATTRITION RATE: This is the number of people who drop out of a program. The average attrition rate for most companies is 80-90%. That means that most of the people coming into a program won’t stay. The quality of the products and the price has to be attractive enough to keep them using the products. Be sure to ask what the reorder and attrition rate is and get company figures on it, not just a vague or glib answer.

10. LOW ENTRY FEE: Is this a nominal fee to cover costs of visual materials for ordering or for business? Is it low enough for anyone to get started? Is there a trial period and a money back guarantee? Can you talk to anyone about this fee without feeling embarrassed?

11. EQUAL OPPORTUNITY FOR RESIDUAL INCOME: Can anyone make money in this program? Are there reasonable commissions right from the start? Does the company have the confidence in their program to print actual income statistics from previous years? Can one earn residual income before enrolling or recruiting someone else? Check the company newsletters for actual results of people’s success each month. You can learn infinite amounts of information from the company newsletter besides actual results. Look foramount and quality of company training, company philosophies, clues for the way people will be treated in the program come from the actual language used etc.

12. TIMING: Has the company been around so long that everyone has heard about it (and all the negative stuff too) so that you would have to hide the name of the company until you get people cornered to listen to you? If you can’t say the name of the company proudly, you won’t be able to share the program with others! Ask for the size of the current market for these products and compare that to the market share this company already holds. Is there room for lots of growth? Beware of the situation in which you have to createa market for the products. Ask for the market research the company has done to show that a need really exists. Talk to others already in the company and find out how well they are doingin fulfilling the “need” that is supposed to exist. Don’t fall for the “get in at the top” line about joining a new company. That just means you will be frustrated and lose most of your down line going through all the inevitable changes and growing pains. Wait 5 years, see if they survive and build a program quickly once the bugs have been ironed out!

13. NO ONE CAN GET HURT: No front end loading, i.e. buying inventory. This is the ultimate test so you can sleep at night. Do you want to involve your friends and family in anything that won’t benefit them and could even hurt them or turn them away from you? Look for a NO RISK opportunity!

14. ANYONE CAN DO IT: Is this a business that anyone can be successful at?