7 Secrets To MLM Success

Secret 2 – Choosing the Right Company

Before we talk about choosing the right company, you must first believe in the MLM business model. We do things for a reason. Therefore to strengthen your belief system you need to fully understand the mechanics and benefits of the MLM industry.

Many times distributors ask me, ‘How do I start’? My reply is always the same. The WHY is more important than the HOW! Search from within you why you are in this MLM business and why you must succeed! Well, having said this, I believe
that training is also important.

Through my years of experience I have seen and come across many distributors who have been hurt and mislead by MLM companies. Many of them have given up on the MLM industry and some go to the extent of condemning anything to do with MLM. I mention companies and not the industry. The MLM industry and business model is great, but choosing the right company to work with is critical.

It is important to understand the criteria, to look for in a MLM company. Through my personal experience these are some of the things that you should consider:

1. Is the company running a program that is a PYRAMID?
Here are the features of programs that run on a PYRAMID scheme –
(a) There are NO legitimate products.
Hey, I was once an Accountant! The only way for a company to pay salaries, bonuses or commissions is from the profit. The profit comes from the sale of products and service, be it physical or virtual (digital). Therefore if a program is
not based on the movement of legitimate products, it is a PYRAMID scheme because the bonuses or commissions are paid out from the collection of monies from members.

(b) There is ‘head hunting’.
In a legitimate MLM program you get paid on the movement of products and services. There is no commission on the mere recruitment of members. When a company pays its members a ‘head hunting’ commission for the recruitment of members, it is a PYRAMID scheme.

The members are not interested in helping people whom they recruit. They are interested in recruiting new people to earn the head hunting fee.

(c) Inventory Loading.
If the company encourages their distributors to purchase large quantity of stocks to achieve PIN Levels, it is not a healthy practice. In most cases it makes it contravene the Direct Selling Act and can be considered a PYRAMID scheme.

In a legitimate MLM company the distributors are encouraged to purchase for their own consumption. There is no requirement to keep a large amount of stock.

(d) There is no ‘Overtaking’.
What it means here is that in a legitimate MLM program the people who join the program later will be paid and promoted according to their effort and result. It is therefore possible for the Downlines (the members that are below you in your organization) to earn more and to achieve higher PIN Levels than the Uplines.

In a PYRAMID scheme the people who join the program later will not be able to earn as much as the earlier members. This is also true for the Pin levels! The earlier members will have higher PIN levels than their downlines.

The above are the features that makes a program a Pyramid scheme and therefore illegal in most countries. The existence of ANY of the four features will categorize the program as a Pyramid!

2. The Company’s Track Record

Here are some of the things to consider:

(a) According to statistics, most companies will not last for more than three years. So find out whether the company is established with proven sales and profitability records. This does not imply that you should ignore a new company. You just got to get more information and take some calculated risk.

(b) The Integrity of the Management Team.
Find out who are managing the company and their track record. We do not want to be involved with a team that had a record of operating PYRAMID and PONZI schemes.

We want to be involved with a team of people who cares about people! It is therefore important to be able to meet up with them personally. Hey, my upline leader in the US went to the extent of hiring private investigators to check on the company’s top management team.

When you join an MLM company, you are literally going into a Joint Venture with the company. You need to be selective. I personally would like to be involved with a company whose management team have experience in the MLM industry
and had been on the field before. In this way they know and understand the problem and needs of their distributors.

I personally will not get involved with a company whose management team consists mainly of business people with plenty of money to invest, but knows next to nothing about the MLM industry. Anyway this is only my personal opinion!

(c) Does the company have Physical Offices where they operate?
It is easy to set up a Virtual Office through the Internet. However, as you are aware virtual offices and web sites can suddenly disappear overnight. It is therefore critical that the company have physical offices and adhere to the laws and requirements of the countries that they are operating in.

I personally had been involved with programs that are based on virtual offices and web sites. According to my knowledge most of them do not last for more than 3 years. However, there are companies that are operating successfully with this concept.

3. The PRODUCTS

Regardless of what others say about choosing a company having a great system and compensation plan, I believe that for long term stability of business and growth, the quality of the products that the company is marketing is important.

Here are some of the things that you should take into account:
(i) Understanding Trend. According to Paul Zane Pilzer, the Health and Wellness industry will exceed the one trillion dollar mark within the next few years. Paul Zane Pilzer was the youngest Vice President of Citibank. He was the advisor to
two past US Presidents and won the Nobel Prize for Economics.

Moreover, more than one third of the world population consists of the baby boomers. These are people born between the years 1946 to 1964. Every 18 seconds someone turns 54 years old. Identify and fill their needs to be healthy and to look young! Do I need to convince you more that the health and wellness
industry is a major trend.

(ii) The medical profession and other related segments are now focusing on the Immune System Support. This is in view of the incidents of Antrax, SARS and Avian Flu. The only line of defense against these health threats is to have a healthy and strong Immune System.

Here is the Health supplement Timeline:

1970s – Multi Vitamins
1980s – Herbs
1990s – Anti Oxidants and Phyto Factors
2000 and beyond – Immune System Support
In fact more than 50% of Bio Tech companies are now focusing on products for the immune system.

(iii) The product must be unique. This is very important because if your product is unique or world patented, there is less competition.

(iv) The products being marketed must be effective and have no toxicity or side effects. Regardless of the research undertaken and the amount of money spent, the products must be effective in order to have repeat orders from the end users.

(v) The product must sell to the world. This means that the product is needed by everyone, from a baby to a 100 year old adult. Hey, it will be great if it is also needed by animals!

(vi) The product must be consumable.
The cost of making the first sale is the highest. You need to be able to repeat the sale and to upsell with other products. If the product is a consumable product, the customers and members will need to reorder.

(vii) The company must guarantee the product. The length of the guarantee period may vary but a guarantee is important to provide confidence to the customers.

4. The Compensation Plan

Regardless of how good is the company and the quality of their products, it is important for the distributors to be well paid. The compensation plan needs to be fair to all distributors at all levels. There are many types of pay plan but it is not my intention to dwell about them in this ebook. However, here are the popular ones:
(i) Unilevel
(ii) Matrix
(iii) Binary
(iv) 2 Ups
Here are some of the things that you need to take into account regardless of the types of Pay Plan:

1. The Pay Plan needs to be legal and approved by the relevant authorities in the countries the company is operating in.

2. The Pay Plan should take care of the grass root distributors. This means that the new distributors should be well rewarded for their effort. In many traditional Pay Plan the companies reward the heavy hitters well but neglect the grass root distributors. As such the attrition rate is high. Well, the new distributor will quit if they cannot see the money! This is the reason why the heavy hitters need to keep on looking for new distributors to replace the ones that quitted.

3. The Pay Plan must be Global and Seamless. This means that when a distributor joins the company, he will be allocated with only one ID which he can use world wide. With that ID, he will have the potential to build a global business. It must be seamless to allow him to recruit and build his business worldwide.

4. The commission payout must be high. Of course there must be a balance because the company needs to be able to account for all its expenses and make a reasonable profit to continue providing the support.

5. First Mover Advantage. An old company may be established and secured, but you will not have the first mover advantage. Regardless of what others may say, I believe that being at the ground floor is important. I will personally look for a company that is relatively new but with a good track record that is fast growing and aggressive. I will then have the opportunity to piggy back on the growth of the company. I can grow with the company!

If a company is already established in more than 100 countries worldwide, the opportunity to have the first mover advantage is no longer available.

In my existing program, the company is fast expanding worldwide and I can piggy back on the growth. This is the reason why I am traveling to a few countries each month to prepare for the opening of these countries.

I hope that the information contained in this section will provide you a good yard stick in your selection of a company to build your future with. Building a MLM business is not easy. Therefore we have to build so that it will last. You lose your faith and integrity when you keep on moving from company to company!

Choosing the right company to be your Joint Venture Partner for life is very important.

Cappuccino Story: The Iron Horse

An old couple made their way down the mountain to witness the “iron horse”. As they approached the railway station their hearts began to pound faster and faster since this was the first time they were going to witness a train – the iron horse. Both of them were amazed at the size of the iron horse. They looked at each other and “Ma” asked “Pa”, “What do you think?” “Pa” said, “It will never get moving”. Just then the whistle blew and the train started moving slowly and then gathering speed. After a while the train began to gain more speed and disappeared around the sharp corner. “Ma” asked “Pa” again, “What do you think?” “Pa” was still recovering from his shock, and he replied, “I don’t think that it will ever stop”.

SUCCESS PRINCIPLES

Momentum is one of the ingredients for success. Success is a matter of starting to take action and maintaining the momentum. Just like a kid learning to ride a bicycle. As long as the bicycle is moving the kid will not fall off the bicycle. The
moment he stops cycling, the kid will fall off the bicycle. When you set your goal, never lose momentum by being distracted or discouraged by others or circumstances.

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