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Section 1: The Corporation and Financial Information
1. Company is debt-free. This is preferred, however, if the company is well capitalized with a low debt/asset ratio that is also acceptable. Just as debt is bad for an individual, the same is going to apply for a corporation. If the debt is high, so it the risk for failure. Make it a priority to find a company with low debt or no debt at all.
2. Company is expanding and has consistent sales volume growth. The whole point for a company to be in business is so it can grow. The whole concept of network marketing is to grow. This means you grow and the company also grows. If people are leaving the company for whatever reason this is called attrition. You do not want to be involved with a company that experiences high turnover. The company also has to have consistent sales month after month.
3. Company is well capitalized and has the funding to sustain exponential growth. When a company is growing fast they have to expand even faster. This requires deep pockets to fund new buildings, computers and machinery. Side note (Undercapitalization is the NUMBER ONE reason for failure in new MLM companies).
4. The company has a high credit rating from Standard and Poors and Dun and Bradstreet. Their financial dealings are regularly reported and their credit worthiness is a matter of public record.
5. Company management team has a proven and successful track record that is verifiable. Managing a network marketing company is a highly specialized skill. Find a management team that can show you a resume of success in network marketing. Other corporate successes do not apply here.
6. Company is forthright about who they are in the process of marketing their opportunity to others. There is no deception during the sales process regarding the name of the company or the fact that they are engaged in multi-level or network marketing. This is common sense. It is not a good business practice to trick people into working with you. This will only result in a bad reputation. Sometimes it is not the company who promotes this, but the up line. Stay away from this tactic at all costs.
7. Management team is accountable to outside sources. (Board of directors, advisory boards, stockholders, etc.) It is critical that the corporate management team listens and responds to the field leader or other industry experts. Dictatorships run by "prima donna" personality types are bad news. Avoid them like the plague. Also watch out for up line trainers who are egomaniacs and manipulative control freaks. If you start feeling ashamed or manipulated during the investigation process...RUN!
8. Company is committed to following all local, state and federal guidelines for operating a network marketing company. If you are not familiar with the codes contact your attorney general's office for your state and ask them for the guidelines. While you have them on the phone ask them for a list of blacklisted companies or companies with complaints on file. See if the one you are investigating is listed. Also check with the Better Business Bureau (BBB). We like to see that a company is a member in good standing with the BBB.
9. Company does not have an exclusivity clause in their contract. They must not have a history of distributor harassment or check-pulling. Distributors should be treated as independent contractors. They should be free to pursue as many opportunities as they desire without the threat of termination, loss of commissions, ostracism or reprisal of any kind. Non-complete clauses for top leaders are dangerous and should not be signed. The only legitimate rule regards cross-recruiting (recruiting sideline members into other deals), or sponsoring down line members below your second level into other programs. Technically, anybody below your second level is off-limits to you for any other purpose other than to help them in the primary program. This is a fair and just rule. All other restrictions with regard to limiting your ability to engage in other opportunities should be viewed with a great deal of suspicion.
10. Company has a written, clearly defined code of ethics that it will enforce, even if it means terminating successful distributors who violate it. Call customer service and ask them if anybody in the company has ever been terminated for violating the rules.
11. Representatives are given direct access to the company principals. Where possible, you also want to see rank and file members given the opportunity to be involved in a "inner circle" meeting, the marketing committee meetings, etc. This gives them a legitimate opportunity to have an impact on the future directions of the company.
Section 2: The Products and Services
12. Company products and/ or services are consumable.
13. Company products and/or services have a unique and compelling story line that sets them apart from other competitive brands.
14. Retail products and services are priced by the company at fair market value. Where possible, brand comparisons are made with local retail stores. Pricing needs to be at or below the best market price currently available through conventional distribution channels. Commodity products with wide-spread availability, such as long distance phone service, needs to be offered at substantial savings for the program to qualify. Nutritional products should be compared with the closet equal that can be found at retail stores or your local health food stores. Unique products can carry a premium, but not more than 20-40% higher than the market equivalent.
15. Products and services are safe and in compliance with appropriate regulatory agencies. Endorsement of the product or service by a reputable 3rd party industry expert adds much credibility. Even if the product or service is not approved by the Food and Drug Administration (FDA), look for some kind of 3rd party lab validation.
16. All products and services are protected by a minimum 30-day money-back guarantee.
17. The company shows a financial commitment to research and development. Their products are maintained on the cutting edge of science and technology. Make sure the company has a track record of releasing new products and any enhancement. Ask them what the budget is for research and development.
18. Products and services deliver the results for which they are intended. Customer satisfaction is high. Strong product or service testimonials are prevalent throughout the distributor and customer base. Return rates are low and retention of long-term customer is above the industry standard of %15. Ensure the company does not make exaggerated claims or hype the products in a manner that cannot be substantiated.
Section 3: Marketing Plan
19. Company offers a very low-cost entry fee ($100 or less) to become a distributor.
20. The marketing plan should be a Compressed Unilevel paying out at least 60% on the first three levels. Standard Unilevels, Binaries, Stairstep Breakaways and Matrix plans are unacceptable because they typically violate one or more of the principals listed above. You are looking for a plan that can award the distributor a profit, even part time, in the first few months. Compressed Unilevels are the best at making this a reality.
21. Marketing plan obligations are completely fulfilled based on personal consumption of the product or services. Initial inventory purchase, coding bonuses, front-loading or any monthly sales quota which goes beyond the amount required for reasonable monthly consumption, are grounds for disqualification of the program.
22. Company products, services and business opportunity are truly beneficial for the last man in. The opportunity is not a "short window," where only those in at the beginning can succeed. In order to qualify, the products and services must be strong enough to attract consumers even at the stability state of the company's growth in a given market.
Section 4: Support Services
23. Company has professional and courteous customer service and/or distributor relations department on site.
24. The company commits significant resources for support systems like high quality professional sales aids, lead generation tools, internet web pages, fax-on-demand systems, 24 hours recorded "sizzle" messages, opportunity calls, training calls, conferences, impending events, etc.
25. Company must demonstrate that their priority is to put the customer first, the part-time distributor second, the MLM professional third and the corporate management team fourth. This type of commitment can be easily verified by the structure of their marketing plan, the retention rates of their customers, the financial success of their part-time distributors, the pricing of their sales aids and the size of their customer service department.
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