How to Tell a Legitimate MLM Opportunity from the Rest...

MLM has many guises and disguises, yet all legitimate MLM opportunities have the same need, to build a Downline.

MLM can be a huge business success, or a gross, time and money-intensive flop. The results depend upon you, and upon your building the opportunity into a business.

MLM products have been around for years, but the performance of agents and associates remains about the same; i.e., only three percent of the people who join make any money.

But remember two things about this statistic:

1. You have to work harder, better, smarter than the other 97% to make MLM opportunities pay off
2. The folks that you attract into your Downline will include 97 out of 100 or the folks that don't make a dime

For those who believe that MLM is a "Cash Cow Lusting to be Milked, look at these statistic another way.

This is equivalent to a farmer raising 100 cows, and only three of them giving any milk...like a farmer raising 100 chickens, but only three of them laying eggs!

What if the farmer must plant 100 seeds for each plants that sprout? Can the farmer stay in business?

Think of your efforts as planting seeds. Your recruiting time, your money, your training of associates, your guidance and coaching…

But, a MLM business has to be a cost-efficient and a measurable strategy for delivering long-tern profit. MLM businesses have to provide a payback in income for their owners.

Prospects become interested to MLM every day, and most want to make quick money from the outset. But most arrivals on the MLM business scene do not fully understand the MLM business, and they make costly mistakes. In other words, MLM often fails to train correctly; or, in the case of fraudulent schemes, deliberately misleads prospects.

One of the common misconceptions communicated by Upline sponsors that fail to train their Downline associates that MLM is about "selling" to a "soft market."

"Soft market" means selling to your family and friends.

Sure, your grandmother will buy the vitamins from you, but will your conscience let you keep selling this over priced product line to your grandmother, especially if you make only pennies of commission on each sale.

Why do you only make pennies from each sale when the product that you pitch is overpriced?

The reason for that sad and sorry state of affairs is that your Upline sponsors each siphon off the money. The "Top Dog" a "lion's share," the Next in line gets a "tiger's share," the next a "hyena's share," and so on until the scraps left give you a maggot's share.

This is the reason that so many MLM products are over priced.

There is another issue linked to MLM business activity. That issue is advertising, and advertising is a central function of a MLM business operation. While advertising is important in marketing, the sale of advertising materials to Downline associates is another profit stream for many MLM companies.

While advertising is important, requiring MLM Downline to purchase brochures, CDs, DVDs, catalogs and motivational magazines is an additional burden that keeps some Downline associates from every launching their businesses.

The fact is that some MLM companies would not make any money at all for their founders if they didn't charge exorbitant prices for the promotional materials that they sell to their associates.

If the company that you are evaluating before joining (while you are conducting your due diligence investigations) charges for slick materials, stand clear. Besides, commissions for the purchase of these "advertising" materials often only goes to the founders of the company, and you, as a "come lately" associate receive no credit for the purchases of advertising materials from your Downline associates.

In reality, the company should provide these materials at cost, or subsidize the creation of those materials. It would be easy to provide all the artwork and creative files necessary for printing these materials, and allow Downline associates to produce them locally.

Even better, an Upline sponsor could pool the printing and creation of advertising materials, customize the materials for the local market, and share the production costs among many business centers. In this way, local contact numbers would be "directly printed" in the advertising materials, instead of being pasted in with a mailing label.

A model for providing all the creative materials that Downline associates need is found in the Internet Marketing arena.

These creatives include:

• Text Links
• Redirect Links
• Banners
• Pre-written E-mail messages
• Tell-a-Friend Scripts
• Pop Ups Ads
• Pay Per Click Ads and Keyword Lists
• Forum Signatures
• Sales Letter Websites that Record Commissions

So, a viable MLM business must consider advertising costs, and ensure that there is sufficient profit once advertising costs are covered.

With Internet MLM opportunities (affiliate programs), Downline associates can be compensated for every visitor, subscriber and/or customer that joins through their promotional efforts. The said compensation may be made based on a certain value for each visit. The most attractive aspect of MLM from the Upline sponsor's viewpoint is that no payment is due to an Downline associate until results are generated.

Internet MLM opportunities are often run by Affiliate Networks and these affiliate networks have an infrastructure of their own.

These are often are composed of two functional organizations: 1.) the merchants organization, and 2.) the sales associates.

Each group has a special function and role when it comes to Internet MLM.

The Affiliate Network acts as a third party between the merchant and the associated affiliates. The network provides the technology to deliver the merchant’s campaigns and offers. The affiliate network also collects commission fees from the merchant and then pays the affiliates which are part of the program.

The merchant can be any web site owner that wants or desires to take advantage of performance-based marketing.

Benefits to the merchant are:

• The merchant receives help in operating and managing the affiliate program


• The technology is taken care of so the merchant can focus on product research on development, and market research


• The merchant can build the Website and sales materials that best sell their product or service, providing superior materials to Downline associates


• The Affiliate Network attracts Downline associates, freeing the merchant to spend valuable time on other profitable activities

Benefits to the Downline Associate are:

• Many of the sales and promotional materials are made available by the merchant


• The Affiliate Network ensures that all commissions are paid promptly


• The Downline Associate can promote a variety of companies, and stick with the companies that prove to be profitable

MLM opportunities should offer a partnership and a synergy for both the Upline Sponsors and the Downline Associates, if the company offers a legitimate business opportunity. Both the Upline Sponsor and the Downline Associate benefit.

And MLM opportunities provide a great way for people with limited capital to go into business for themselves, particularly on a part-time basis while they learn the business end of management.

And, Downline Associates can be up and running within a few days. But, "look before you leap," and ensure that you are joining with a company that you stand a chance earning a living from.

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