Switching MLM Companies or Simply Evaluating your Company

There are so many different things to consider when looking at your options in joining or switching network marketing companies. Maybe you have no intentions of switching companies and this article can strengthen your core beliefs in the company you are already part of.  There is not one true company out there; the better the company the higher the probability that you are interested in joining it. I am a big believer in the industry and although I have my opinions I always strive to edify other companies.  This article comes after I recently met with 20 different MLM companies.  It was an eye opening experience that was very informative.
Each company you look at will inevitably have strengths and weaknesses. Many times the biggest strengths become the biggest weaknesses.


The List of Facts to Consider When Evaluating Companies

1. Who is the owner? The most important aspect to look at when evaluating a company is the ownership. The owners will either right the ship or crash the ship. Personally I want to know as much as I can about the owner or owners. What their track record is, whether that be in the industry or previous successes with other industries. I obviously strongly prefer an owner who has industry experience. There are many millionaires and even some billionaires who start MLM companies based on success with ventures other than Network Marketing. Although that means something it surely doesn’t mean everything. Personally I would rather have an owner who has had success inside of the Network Marketing industry. The more experience an owner has, the more I can hedge my risk. I want to know the track record of the owners’ integrity. Who is the owner as a person? What is his or her vision and philosophies? The more information you can gather on the owner/owners the better.

2. What is the Company’s track record? The newer the company, the lower the percentage they will still be in business in 5 years. Studies have shown that 95% of new start-up companies go out of business in their first 2 years. In most cases I would steer clear of new start-up companies, but as always there is an exception to every rule. I would just use a great deal of caution if considering a new start-up company.  If you just joined or are planning on joining a new start up company do not be offended.  Every company was a start up at one point.  Think of a new start up company as a risky stock.  The upside can be huge but so can the downside.  So again I am not saying start up’s are evil! 🙂  I have friends that recently joined a start up company and I believe it was definitely the right call for them.  Those friends knew their stuff and I believe they made a very good decision.

Here are some questions to ask the company: How long have you been in business? What were your previous annual sales? What are you on pace for this year in annual sales? If you are focused on the U.S. market then what has your year over year revenue been in the U.S.?  (I say that because many larger companies will tout their momentum when in reality they are in momentum but only in international markets where you may or may not have any interest.) Don’t just take the distributors word for it!  Do your own due diligence.  Are you profitable? How long did it take for your company to become profitable? How profitable are you (they may or may not answer that question)? Are you a debt free company? (Since most companies are privately held, it is important to do your best to get real numbers.) What are the goals for this upcoming year as well as the next 5 years? What makes your company different?  Grill them on that last question.  Every company says they have the best of everything but get down to the core.  What separates you from everyone else?

Look beyond the standard answers. Every company thinks they are the best at everything.

3. What is the quality of and market for the Products? Each company will always tell you they have the greatest products. You have to do your due diligence and find out the truth. Ask yourself: If I made no money at all would I still be interested in these products? (If not then answer the next question.) If this company wasn’t a Network Marketing company would there be a demand for the product? Understand this, when someone is making money off of the products they are using or selling, they naturally become more passionate about them. I don’t think the intentions are bad but it is human nature and will always be that way.

4. Does the Compensation Plan fit your needs? Not all compensation plans are created equal. You need to consider: Are you going to do Network Marketing full-time or part-time?  Are you going to be more of a recruiter or are you better at helping teams reach their potential?  Do you want high minimums or are you looking for a lower minimum? Again every company will tell you how their compensation plan is the best and every other plan isn’t even close to their plan. Over the last 5 years the industry has evolved where there are more updated plans. Many love the newer plans while others would rather have a weaker compensation plan but a more long term, safe bet company. Obviously we all want the best of both worlds. The better you become at evaluating companies the better your decision will be. Too high of payout either means that the products are of lower quality or that the company will inevitably go out of business.   Percentages don’t mean everything. For example you could have two different companies that have completely different compensation plans. Both plans pay out 48% so one could argue they are identical. That doesn’t mean they are even close in terms of payout. It is all about where the money is allocated!  

5. Who Are You Working With? I would pick a great leadership upline and a good company over a good leadership upline and a great company. I have heard many leaders say that it doesn’t matter who your upline is. I don’t buy that for one minute. I have a very strong belief that in order to be successful we all need mentors. The better the mentor the greater chance you have of success. Of course you need to do your part, but all things being equal, a quality mentor can make all of the difference. If you have been in the industry you know that statement to be true. You do not have to be directly sponsored by the best. It is ok to be sandwiched in between several people who haven’t yet become leaders. The cream always rises to the top. As you show your commitment your upline will almost always take notice. As you are evaluating companies or a company I would meet with a few of the so called upline leaders to get a feel for their philosophies. If you are currently reevaluating your company meet with the best in your upline. Get to know them.

6. How is the Timing? Again you will hear how this is the perfect time to get involved with the company. You will want to establish for yourself if it truly is great timing. The above 5 paragraphs should help you decide how great the timing is or isn’t  Go back to the records of what direction the company is headed in. Are they growing in the U.S. (assuming that’s your focus)? Is the company ready to open in an international market and are you wanting to build your business there? What products are due to be released?

There is no such thing as a perfect company. When evaluating a company I would rate each one of these topics using the 1-10 scale, with 1 being awful and 10 being great. You then must decide what it is you are looking for. You may want a younger company that has much more upside and potential with a little bit of long term risk. You may want a company that has been around longer that may have less upside but you know has no long term risk. You may want a little bit of both meaning a company that you feel has been around long enough they don’t have much long term risk, but they still have massive short/long term upside.  Almost every company will tell you they provide it all – both long term stability and short term gain. You must become educated so that you can make the correct decision for you.

I am not here to tell you which company to choose. I am here to tell you there are many great companies and leaders out there. I know this industry can change lives and make a huge difference. Choosing a company is a very big decision. In the end once you have made an evaluation make sure that you go somewhere you can get passionate about. Go with your gut.  Never make a decision this big unless you have clearly thought it out. That doesn’t mean it has to be a decision that takes months or even weeks but make sure that you really evaluate who you are working with. Let’s all BUILD UP THE INDUSTRY RATHER THEN TEAR IT DOWN. I hope this article is helpful in your decision. Go light the industry on fire!

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