Comparing Different MLM's

Here's a word of caution concerning comparing one MLM opportunity with another: Be Careful! It's not always how it seems.

To illustrate an actual case, I'm going to tell you about two different distributors with two MLM companies (no actual names will be used). Under Company X is Double Dan. Dan got started with Company X in the early stages of the company's development. He got really excited about the Company, the products and the compensation plan.

Within a couple of years Dan built a large organization of over 2,000 people and became a Double Diamond in the Company. Once you achieve Double Diamond status with Company X you're close to the TOP and are among an elite group of "achievers". Double Dan had BIG plans. His organization was going to keep growing at such a pace that he and his family would be set financially for life!

But then, after about three years, things started changing for the worse. Diamond Dan's organization started to crumble. Many of his downline became inactive. They weren't showing up for meetings. It was getting tougher to sponsor more people. And most importantly - Diamond Dan's monthly bonus check was dwindling.

Diamond Dan started to panic! What was happening? Wait a minute! Company X has excellent products that people love! But they're not CONSUMABLE. When people buy Company X products they're good for half a year or even longer. And his distributors are complaining because they have to order products by the cases (because Company X only ships cases of products) and they have to keep enough product on hand to keep their downlines supplied. And they're also complaining because they have lots of paperwork to do. They have to keep track of each person in their downline to know when they're going to qualify for higher levels. Plus - his distributors didn't have to buy product every month to stay qualified. They only bought when they ran out of product. Diamond Dan really got concerned when he found out many of his downline were joining other MLM companies.

Now let's check out Steady Stan. Stan has been with Company Z for several years and has build an organization of about 150 people. Stan chose to get involved with Company Z for several reasons. The products were largely "consumable" products. They were excellent products that people would most likely "re-order" monthly. His down- line had to buy a minimum amount of products in order to qualify for their bonuses. But since Company Z offered over 200 products to choose from, this was not seen as a problem. Many of Company Z's products were the kinds of products that people needed to buy anyway so Stan's distributors merely transferred the buying of those products from their retail stores and bought through Company Z. Steady Stan has been building his organization on a strong product line, on strong company support and on a strong compensation plan.

Last month, Steady Stan's bonus check was more than twice as much as Diamond Dan's bonus check. Steady Stan has about 150 people with almost 85% remaining active. Diamond Dan has about 2,000 people with less than 10% now active.

What does this say about the two MLM Companies? What does this say for anyone who has been looking to join a particular company or who has been struggling with the one they're with?

Do Your Own Research!

No matter what anyone else tells you about a particular MLM company - Do Your Own Research!

There are lots of companies that come and go in this industry. Many are hyped up to be more than what they actually are. If you're looking for a long-term financial opportunity, find out first what your MLM company does for you.

Does your MLM company:

1. have consumable products - meaning products that will be consumed within one month of purchase? This creates re-orders.
2. allow single-item purchases? BY this I mean no requirement to buy by the case. It's okay if there's a minimum $$ amount to buy but not where you have to buy 12 of one item.
3. require distributors to make monthly purchases in order to receive their bonuses? This keeps the products moving, which is good for the company and good for the downline.
4. have realistic retail prices for their products? Unless there are quality products that are competetively priced with similar products on the market, they will be difficult to sell.
5. take the burden of accounting and paperwork away from the distributor and handle the bulk of it in-house? Most distributors who are in MLM have many responsibilities (family, full-time work, social, etc.) and don't want to handle lots of paperwork.
6. send downline checks directly to each distributor? (same reasons as #4)
7. offer many different financial incentives? Everybody has different goals and work at different paces. It's important that the company recognizes this and has in place many growth incentives for the distributors.
8. allow customers to buy directly from the company? Again - takes the burden away from the distributor.
9. supply training and offer sales aids at reasonable prices? The company should offer as much assistance as possible to its distributors. Sales aids should be offered at a nominal cost.
10. have a fair compensation plan? Study the plan carefully to see if it offers long-term growth. If in doubt - have someone else look at it who is more knowledgeable.