In Top Ten Questions About MLM #5, I mentioned the importance of not looking at just the comp plan, company or products or only looking at all of the above. Some of the less tangible factors are much more important than specifically product, company or comp plan.

These are very important, but I’d like to make sure you realize that some of the things that are not as easy to quantify will be the most the most important factors in your choice. You might want to read the previous article in this series here- MLM Training, if you are at this crossroads in your network marketing journey.

I’d just like to point out that making sure your new MLM home business is aligned with your core values & working with the right team can be far more important & basic than the  company, comp plan or product in your final decision. If your choice is aligned with your core values & you are working with the right team they should have already chosen a great comp plan, company & product.

With that said, let’s get into the things I looked at regarding comp plan. Again I take a somewhat unorthodox approach & look at the big picture on this. I’m not going to get into a debate over whether binary, unilevel etc. are better. Volumes can be written on that, & much of it is crap without considering some of the factors below…

I want to cover some of the factors people don’t always pay as much attention to when making the choice of what they think the best comp plan for them might be.

What I looked at when checking out the comp plan for my current MLM business…

• What is the attrition rate or distributor retention rate? - In other words, since the company opened it’s doors, what percentage of people have kept their membership active? This is very important as most companies talk of passive residual wealth streams, but do not have the level of retention to support it. Most MLM companies are at 10-15% retention or lower. This means 85-90% of distributors who join under you quit. I looked for a company with a better than 90% retention in the entire life of the company. Going from 10% retention to 85% retention is a 750% increase in payout! HINT- Almost no MLM companies in existence today can prove a retention rate this high. If you want true passive, residual wealth, or walk-away income, you must have a comp plan & product value that encourages very high retention rates among distributors.
• How much can they pay you & still remain strong? – I am in electronically delivered information as my product. Because of this, we pay out 68%, and the company can still achieve rapid growth at this level of payout. If you can do an electronically delivered info product, you will always get a much higher percentage of the payout due to lack of overhead from all the aspects of making and handling physical product. It’s also less of a headache for you. This is about a 36% increase over the best payouts in this industry for companies that deliver physical product.
• Can someone deliver a similar product for a lower or the same price & still provide the same kind of value & compensation plan? – This is not specifically a look at comp plan only, but is more of a look at where the company is positioned relative to the entire market. It is a look at whether the company operates from red ocean strategy or blue ocean strategy. If the company does not have strong value innovation that cannot be easily duplicated, it may not be able to maintain any comp plan advantages it has starting out.

The first two of these differences combined can result in a 786% total increase in payout over just an average company (not a bad one). This just requires an 85% plus retention rate and an electronic product that can sustainably pay out 68%.

This does is not even taking into account the advantages of being a blue ocean company with an unmatchable value innovation. Unfortunately, most MLM companies today do not achieve this retention rate or payout.

If you are in one that does, stick with it.You have a great company & comp plan.

If you don’t have this kind of company & comp plan, get in touch with me immediately so I can help…

To your unbounded success, prosperity & happiness…

~Scott

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#5 What Is The Best MLM Product To Sell?

This is a great question. There are so many different types of products from Acai juice to ZurvitaTech. This question is kind of a loaded question as well. It’s important that you understand that there are far more important aspects than products, companies & comp plans, when deciding which network marketing company to join.

Since the focus of these ten questions is to address the new prospects question very specifically, I will stick to that. The reasons why product, compensation and company are secondary factors in your decision is another article all of its own. I’ll just mention here that what you bring to the table is way more important than these external factors.

So what would be great criteria to consider when deciding on a product you might want to sell with a network marketing business ?

The first thing I would do (and did), as is referred to in this article on my website – Vemma, would be to ask myself this question. If I were not looking at this company as a business opportunity, might I be a repeat buyer of the company’s products?

This gives some indication of possible demand for the product and it tells you whether you are interested enough in the products to be selling them. As far as making a choice of what MLM company you will join based on product alone, I would say that’s a bad idea.

It is good to be selling something you know and love. If you do some market research, you can find out more on which areas are hottest at the moment you are looking, but there are some themes and areas that are very strong.

Home parties have been strong since Tupperware got started. Today one of the hotter MLM companies is in direct sales through home jewelry parties. Another international MLM, which has a super hot market, sells fat-reducing and body-shaping garments, as well as skin care and a nutritional line.

Energy drinks and shots are a hot industry, but to me these don’t stand on their own. There are too many options readily available at your corner store for this to be a viable MLM on its own. These drinks are great as part of another stronger product line.

“Magic juices” and getting into why one might be better than the next could probably take volumes, so I won’t do that. I’ll just say that there is tons of competition in this market.

The products here that do well are from companies that have something else going for them besides the product. The point is this area is saturated with companies that have great products. Make sure you look at the big picture, not just the “magic juice”, if you’re signing up as a rep for a “magic juice” MLM.

Education and training are hot products both in the network marketing industry and in the world of traditional business. I believe this to be the most promising market in network marketing today. This is why I give away MLM training,  & sell affiliate products for your education, training and leverage. This is also why my primary MLM is in the education & training business.

I believe that the people like me who provide training, education and tools to the entire network marketing industry are the best positioned for long-term success. Quality education and training is always in demand. Supplying this to our industry, I believe, is more promising than focusing on a certain company or product for its own sake.

Plus, I just feel great about it everyday! Nobody complains about products that help them become a better person and develop to their full potential.

There are tons of other innovative products out there, some you would never dream of. If you want to be in MLM as a business, when thinking about whom to join, don’t base it just on the products they offer. Make sure you look at the big picture and really check out the various products available to your new home business.

Then when you make your final choice of company to join, make sure the company is marketing something you get value from, you’ll enjoy using and selling, and something you can personally get really excited about.

To your success,

Scott

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With things going on like the record numbers of unemployed today & jobless college graduates, many people are looking at alternatives. Hardship is causing many who never seriously considered network marketing as a career to take a closer look.

There has been an influx of new professionals from corporate America into the MLM industry and they are building teams and incomes very rapidly. I myself belong to this group, & am leaving sales and management in corporate America behind right now.

I realized that my most important skill that I needed to learn was how to create wealth at will. I decided that learning marketing, sales and leadership at a much higher level was my key. I wanted to grow in these areas & chose to do so as an internet entrepeneur.

I did exhaustive hours of research and decided my best hopes lie in network marketing.

Many people are asking a lot of the same questions I was asking and one of the most common is, “Is MLM a pyramid scheme?” Obviously, if you put your friend or family member on your list, get them to sign up and then you both find out it is a pyramid scheme, this is going to be hard on your relationships.

You really don’t need this, nor do I.

So how do you tell if the MLM you are thinking of signing up for is a pyramid scheme or a legitimate company? There is a very basic way. If they are just recruiting you, so that you can recruit more people, and if there is no real product or service…you are looking at a pyramid scheme.

In other words, if the money the company makes, as well as your income and bonuses, are just based on how many people you enroll…that’s a pyramid scheme.

Even if there is some product being delivered but it is only bought for the purpose of joining the deal, not for consumption or sale…you are still probably looking at a pyramid scheme. Be very careful with any MLM that resembles this. It’s probably best to get far away.

Something you might want to consider when evaluating this question is that great MLM companies should have the following:

#1 – Great ongoing MLM training & marketing training

#2 – A low (or no) initial investment

#3 – No requirement to purchase or keep an inventory of stock to remain a distributor

#4 – A great return policy to consumers and buyback policy for reps

#5 – Reps that don’t go around misrepresenting incomes

#6 – A focus on making retail sales of their products

#7 – A management team and legal team that are experienced & successful within the network marketing industry

To Your Success,

Scott

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This question kind of makes me laugh, but let’s dig in. First of all, the network marketing industry has existed for over 50 years, and in plain view. If something was illegal, do you think there would be 4,800 companies plus involved in this industry worldwide, and more jumping in every day?

Let me add a disclaimer. There are a few countries where anything related to MLM or network marketing is considered illegal. Please make sure you check local laws. This article is not meant to be legal advice.

The attorneys with my current primary MLM are quite sure that MLM is legal and that we operate within the law. The attorneys with my affiliate system also indicate we are operating completely legitimately, as well.

Like in any other industry, there are snake oil salesmen, cons and rip-offs. The MLM industry is similar to franchising in its infancy. MLM has only recently begun to be accepted by traditional businessmen like Donald Trump.

When franchising (think McDonalds) was up for vote among our politicians this past century, it almost lost. Many famous politicians and businessmen did not understand the concepts behind franchising and said it would never work. McDonalds and many other powerful franchises would not exist as they do today if these naysayers had their way.

Certainly franchises have changed the face of history somewhat. Today network marketing is changing the personal history of families and individuals, one by one.

Within all territories that I operate, MLM is quite legal. I market my MLM and my affiliate products globally, with a few exceptions. Pyramid schemes ARE illegal and are often confused with MLM due to the shapes used for visual aids.

If you are unsure whether something is a legitimate MLM or a pyramid scheme, you can check with the Direct Selling Association, a trade organization focused on the industry and based on ethics, trust and confidence.

Another resource for your MLM due diligence is NPROS.com. There are definitely pyramid schemes out there masquerading as legitimate network marketing businesses. Just make sure you do a little background on a company before you join or dismiss it as a pyramid scheme.

MLM is quite legal and can dramatically transform your life, if utilized well.

Next question will be – #4 Is MLM A Pyramid Scheme?

To your success,

Scott

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Right now in the USA, record numbers of people are losing jobs, becoming underemployed or finishing college without great career prospects. It’s no surprise that record numbers of people are looking for a great way to make a living.

This brings me to our question above. 175,000 people are joining the network marketing industry each and every week right now. There has to be a reason for that. Is it just that they don’t care how they make a living? Will they rob, cheat, steal for survival?

Is MLM ethical?

I have to say that I believe people are inherently good. With the experience I’ve had in my life I’ve certainly encountered my share of crappy people, so this is not some it’s all good, perpetually optimistic person talking to you. I’m definitely closer to the realist side of things, even to the point of being skeptical and cynical when life warrants a good dose of that.

I’m going to give you some facts about MLM, and let you make your own decision.

First of all, I’ll give you a quick personal observation based on my experience with the industry. There are incredible people in this industry today. Top-notch professionals are leaving corporate America, looking for something better. These are people who could go find another job even with this job market. Leaders with strong sales skills are always in demand, even in recessions.

I fall into this category, and when evaluating my options, I decided against another sales and management job. I decided to leave the corporate world for the MLM business. Why? I felt that it was the opportunity with the most potential, by far. Many other professionals are making the same choice.

Certainly there are good and bad network marketing companies, just like there are traditional corporations, or people. This is just a part of life.

A very high percentage of people fail at MLM, both in starting a network marketing company or starting as a distributor. This also holds true with any type of traditional business start up. Being an entrepreneur is not for everyone.

Why would people choose to leave their comfort zone and become entrepreneurs in MLM with everything on the line?

Traditional companies are designed so that the people who get involved early and who are at the top of the organization make the most money, by far. Should it be any different with MLM?

50% of all new businesses fail in their first several years. It’s common knowledge in the industry that this percentage is exceeded with MLM. I see this as the natural order. Compared to traditional businesses, a one person, work from home business involves very little motivation and pressure from anyone outside oneself. Can the increased failure rate, therefore, be an indication of an unethical business?

In fact don’t most people who try juggling, riding a unicycle, becoming a pro athlete, being an opera singer, being a ballerina, becoming a professional artist or musician fail? Can the fact that a pursuit or endeavor requires commitment, consistent action, and developing exceptional personal skill sets be an indication that it is inherently unethical?

In research that Dr Charles F King of the University of Illinois has conducted since the 90’s some interesting things have been observed about the network marketing industry. Of those who get involved with MLM 95% fail. Of those that stick with one company and stay in the industry for 10 years or more, more than 90% achieve great success, reaching 6 or 7 figure earner status.

In everything you do, you get out of it what you put in. This is true in the network marketing business. However, if you put in a huge amount at the beginning, you have the potential to get way more out in the long term.

Today people who are having difficulty financially are being offered freedom in one of the fastest growing industries on the planet.

They are not limited by being poor (often start up costs are very low in MLM). They are not required to have a college degree (though a commitment to ongoing training & education and personal development is necessary). They can also put in the time they need to from home and whenever they have free time (no commuting, car, or leaving the family behind is necessary).

Is something that has this lack of barriers to entry, with the potential to leverage your time and money far beyond any other business, unethical? Is something that offers freedom and massive long term income beyond any other business you can start unethical? Is something that requires you to excel and develop yourself unethical?

I think you may have already answered your own question.

To your success,

Scott

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MLM is short for multilevel marketing. It is an acronym for the business also known as network marketing. Multiple levels of people market products directly to consumers.

An IBO, distributor, affiliate, rep or team member finds and adds customers. He or she then trains other people to do the same.

If you become a rep with a MLM, you can earn both by the marketing and selling of their products and with the recruiting of new team members, as well as by being paid a percentage of the income these distributors create.

The reps that you sign up with your MLM company are your downline. The rep that originally brought you into the organization is called your upline. Various companies have different policies on this, but MLM top producers understand they are responsible for quality of their team member training.

Multilevel refers to a couple of things.

The differing levels of pay that people earn for each sale is paid at multiple levels and percentages. These levels also refer to where the person actually is in the hierarchy of the organization. Having multiple levels to their marketing is a goal of both the MLM industry and most, if not all, business operators in traditional industries.

It can be done by giving a discount or special deal for referring friends to them. It can be word of mouth from providing great service or products. Businesses all want their customers to refer them to potential customers.

Some of the benefits that can be had with success in MLM are as follows -

• Having flexible hours (especially with network marketing online) to build their business and lots of free time once it is built
• If you build a large downline, you can make a lot of money very quickly with the advent of online MLM
• Little to no barriers to entry for anyone; low costs to start and no college degree required

Hope this helps for anyone trying to figure out what exactly the terms MLM and network marketing mean.

This is the first in my series of Top Ten Questions About MLM. I will answer the ten questions most frequently asked by people as they are considering going into business within the network marketing industry.

Next entry will be “Top Ten Questions About MLM – #2 Is MLM Ethical?”

To your success,

Scott

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