MLM - the BAD
It's very exciting, BUT as with any industry, MLM is not perfect.

There are some real drawbacks [including some 'negative press' in some areas - and largely because of some gross misunderstandings]. 

Examples: There is far too much HYPE in this industry - too many false promises - far too much unrealistic expectation - too many illegal SCAMS and PYRAMID SCHEMES - too many lawsuits (unjust terminations, etc) - too many MLM Companies 'hitting the wall' - or making 'negative' changes (in their comp plans / their mindset / their direction) - OR being run by a dictatorship at the top - OR too much Upline greed and ego - too many Heavy Hitters with strong self-interest. There are far too many good people getting hurt as a result of these dirty little secrets.

'DISTRIBUTOR' Based - Most MLM Home Businesses are primarily Distributor heavy - where the emphasis is on SELF-consumption of the products / services. Too little emphasis is given to building a CUSTOMER base.

The INTERNET can 'Destroy' a Downline - Because the vast majority of MLM businesses are DISTRIBUTOR based (and not CUSTOMER based) - the minute "new and/or better sounding deals" flood the Inboxes of frustrated Network Marketers - a Downline can be reduced over night. 

The Dream of RESIDUAL Income is Evaporating - We live in a rapid-communication world because of the Internet - news travels at the speed of lightning through Cyberspace. Some Distributors change companies like they change their socks - and the idea of some day 'retiring on the beaches' has become elusive [with some cmpanies].

NOTE: Despite the fact that most Distributor based Network Marketing Home Businesses can become unstable [because of the reasons mentioned above] - IF they are built correctly - with proven business strategies - they can become very strong, and truly flourish.   


  MLM - the UGLY - Some RED FLAGS to watch for:

POLICIES & PROCEDURES - When people look at (or evaluate) a company, one of the primary areas that is often 'missed' is their P&Ps - and their T&Cs (Terms & Conditions). These are enforceable Legal AGREEMENTS. They in fact represent your CONTRACT to be "in business" with them. We cannot - cannot - stress enough, the critical importance of doing your due dilligence on this. Believe it or not - there are companies out there (and some long term, well known ones) with Clauses in their P&Ps that can DESTROY your dream for a solid, lifetime Passive Income! Learn how to PROTECT yourself.

Control - The fact is, it is the "companies" that own the assets - the downlines - the products & services -- not the Associates. It is the "companies" who call the shots - make the decisions. It is the "companies" who have the control - and their bank of attorneys make sure of that. Still - IF there is high INTEGRITY at the ownership level - there will usually be a code of fairness and equity.

So, careful evaluation at the very beginning is imperative.  

Balance - It is the 'mission' of the Association of Network Marketing Professionals (the ANMP - a non-profit, global organization) to educate, protect and preserve the rights of Associates - and to bring about a better "balance" between field and corporate. See more on this below.

Here are a few warnings:

= Can You Ever RETIRE?- Please WATCH OUT for P&Ps that say you must provide 'documented evidence' of certain activities. These include - 'an ONGOING obligation': to personally promote sales to new Customers, and to conduct person-to-person selling - to 'continue to provide' training to downlines - to 'continue to monitor' new Associates, etc. The bottom line here is that many of these companies could end up stealing that CHECK you struggled so hard to create (PASSIVE INCOME). It does happen - it IS happening! A newer version of this is when you see the words 'performance requirements'. Unlike the Agreements that Insurance Agents / Investment Brokers sign with their companies - in NWM, there are NO legal vested rights for Associates.

= NOT Independent Business Owners (IBOs) - Most people who join an MLM have been told they will "own their own business" - be Independent Contractors. Nothing could be further from the truth. They will actually be SALES REPS for that company. Not that this is a 'bad' thing - just a reality.

However, IF you can find good companies [and they're out there] - with absolute INTEGRITY at the top - you will pretty much be 'in business for yourself' (yet, not by yourself :-)  As well, keep in mind the "advantages" of an MLM Business [compared to most 'other' businesses], at the top of this page.

= Can You Be TERMINATED - 'WITHOUT CAUSE'?- Please BEWARE of P&Ps that have Jury Trial Waivers written in, meaning that an Associate cannot take them to court, should they be terminated without cause (company acts as judge / jury / executioner)! Some companies even have language that says if you (or 'anyone' in your group) should partner with someone who has ever had a FELONY, that you can be terminated. You cannot police or control something like that.

= Can They CHANGE the COMP PLAN?- Many P&Ps state that, with 30-days written notice, they can 'terminate this Agreement - including the Compensation Plan' - with or without cause. In other words, they could decide to go into Direct Sales with the public, and abandon the Network Marketing business model altogether.

= Can They STEAL your DOWNLINE? - Watch out for P&Ps that have the word 'Assign' in their clauses. In law, that word means the "transfer of property rights and interests". Organizations that you built can be placed under Big Hitters - it's being done.

= Are There Good 'Product GUARANTEES' ? - Believe it or not, some companies offer absolutely NO Product or Service GUARANTEES - None. Yet, repeat-purchases + Customer Satisfaction and Loyalty are the very 'backbone' of business success.

= CAUTION Rules - Please READ your P&Ps / T&Cs - study them - ask good questions - demand answers. The company will say - "but we would never enforce that!" Our swift response is - "well why would you even put it in there then?" Some will argue that these clauses are in there because 'you must continue to do something' for the money you earn, or it's not legal. Our immediate response is - "show us where that is written into law!" Others will insist that these clauses are in there because of fear of state AG's (Attorneys General) who 'don't understand' our NWM industry - who confuse it with (illegal) Lotteries and Pyramids, where they say there must always be 'direct or indirect involvement' of the individual earning the income, and the source of that income, etc.   

= 10 TIPS - 10 great T-I-P-S on doing Due Dilligence =>

= MLM WATCHDOG.com - Read what industry Consultant Rod Cook has to say about unjust TERMINATIONS - his advice =>

= MORE - Here are some extra things to check out =>