When writing MLM reviews, we base them on ten factors. This is because no one factor can enable you decide if an MLM company is good to join or not. These factors are:
- Year of creation / Number of years of company and other details
- Founder(s) and/or Director(s) of the company
- Position among top 100 MLM companies in the world
- Products and/or services offered
- Number of countries in which company does business
- Business model / Compensation plan
- Annual sales
- Pros and cons
- Bans / Complaints / Legal issues
- Our view of / take on the company
With numerous MLM programs out there, it can be difficult trying to pick one to invest in.
Coupled with how hard it is to come by money, people must do their research before spending money on joining any opportunity.
So we hope this post helps you in your quest to pick an MLM company that will work for you.
Now, without further ado let’s see how each factor can give you a perspective of the company.
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Factor N° 1: Year of creation / Number of years of company and other details
Under this factor we look at how solid the company is, based on the year it was created. What we want to put across is the stability of the company.
This is because the number of years in service to a big degree reveal the strength of the business which might have gone through a lot to be where it is today.
When we first take a good look at the company, we want to see not only how old they are but also where they are from and what they do.
The look we take at the makeup of the company include the who, what, when, where, and why of how they have stayed in business all those years.
We will be looking at the company, how strong it is and what kind of reputation it has.
Generally, the longer a company has been in business, the better choice it is for opportunity seekers. For, having survived so long shows that people appreciate them, their products and/or services.
We used generally in the paragraph above because there can be exceptions to the rule.
That is why although Nu Skin Enterprises was founded in 1984, yet we did not recommend it in this review.
This further goes to show that to choose a good MLM company to invest in, all the 10 factors above must be taken into consideration. Or at least 9 of them for most of the MLM companies, since the bans/complaints/legal issues concern only a fraction of them.
So, let’s go to the second factor.
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Factor N° 2: Founder(s) and/or Director(s) of the company
Under this factor what we are looking for is the integrity of the company.
So, we dig out the names of the owners and/or managers of the company and check for information on them.
This is important because the characters, the vision and the experience of these people affect the way these companies are run. In other words, they determine the corporate culture.
Just as you won’t partner with a stranger in marriage, business or any other field, you must also not join an MLM company until you know about its top people.
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Factor N° 3: Position among top 100 MLMs in the world
At primary and secondary school, at the end of every end of term examination, the school posted a list of the top 10 students and the bottom 10.
The first 10 list showed the best students. But they may not necessarily be exemplary in character.
The same goes for the top 100 MLM companies.
A good company is at the heart of the multi-level marketing program. So we look at the place of an MLM company among the top 100 ones in the world.
But this is not enough.
For example, Fuxion Biotech is number 74 on the list of the top 100 multi-level marketing companies in the world. That is quite an impressive position. Still we did not recommend that company in this review because of aggravating circumstances of the other factors.
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Factor N° 4: Products / Services offered by the company
We check out the quality of the company’s products/services to make sure they are what the company claims.
Looking at the products the company is promoting will let you see if they are worthy of investing in and if they do indeed look legit.
So, in this section we touch on the following:
Does the company offer a product or service in addition to the program?
When an MLM company has no product/service to go along with its program, it falls onto the category of a pyramid scheme. So we want to know that the company we are recommending is not one in any sense.
Should the company be one, you will be required only to recruit people to build a downline. And this is also where you will be making commissions from instead of from products. This increases your possibility of failure.
Are the products or services of top quality, that is to say, reputable and reliable?
The company’s product or service has to be good.
Otherwise you will end up with complaints which will destroy your company’s reputation and you will end up shunned.
Are the products/services in demand?
Know that while some items are very easy to market others are not. It is then up to you to use your very own experience as a customer to gauge if there is a market for a specific item or not. Much better, you can ally that with a Google search.
Are they moderately valued (That is, not overpriced)?
The chance that the product offered by an MLM company is unique is pretty slim. This means that you will come up against similar products while selling them.
Price being an important consideration in people’s purchasing decision, their level will affect your chances to make money.
Does the company stand by their products/services?
Are the products/services the major emphasis of the company? That is, the main focus of the company’s business?
If they are not, you risk not making any money with them.
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Factor N° 5: Number of countries in which company does business
A company usually starts working from a territory. It may decide to expand abroad after conquering the domestic market and feeling emboldened to export its model elsewhere it sees opportunities.
Spreading from one foreign country to another shows the company is liked not only at home but also on the international markets.
This is an indication to give them your trust.
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Factor N° 6: Business model / Compensation plan
Another thing we look at in our reviews of MLM companies is their business model/compensation plan.
We integrated this factor into our reviews because the quality of the business side of the program shows if they are profitable as an MLM business opportunity. In other words, the business plan also determines if a company is a good pick for making money.
This factor may also be quick to reveal red flags.
So we investigate if the compensation plan has room for advancement of enrollees.
Another thing this may bring out is how the companies back their employees, representatives, customers, or distributors in their MLM program. We also want to make sure they are putting their customers and distributors first.
This factor is where things can get really tricky. Often it is the business model or compensation plan which makes distributors, enrollees, or joiners of MLM companies to succeed or fail.
Much of a person’s success working any given MLM program depends on the individual’s strong points. While one person might excel in cold call selling the other’s strong point could be in group party settings. So it is crucial to study the model or plan to see if it is a good fix for you.
Some MLM compensation plans are too complicated to make any head or tail of. Why should you get into something that you don’t even understand? Can you succeed in a business whose crucial element you can’t unravel?
The structuring of the MLM compensation plan is also important. The binary plan one is made in such a way that if you recruit somebody, they go to one leg of the plan and if you recruit another they go to the other leg.
Worse, you’re required to keep a certain number of recruits on a leg.
The demanding conditions under which this must be done make people continually lose the legs they build.
The member ends up feeling like the business plan was expressly set up to frustrate them so that they do not succeed.
But if the MLM compensation model or business plan is good, it will help you build and retain your members and make money.
With that said, let’s see how the annual sales also determine our decision to recommend an MLM company to our readers.
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Factor N° 7: Annual sales
The size of the annual sales made by the company must also count in your decision to join it.
These sales come from the efforts of the distributors/representatives/members who promote the products.
But no matter how hard those people push them, would the company make a good turnover if the products weren’t good?
Generally, the higher the company’s annual sales, the more people are appreciating them.
But this is another element which can also be deceptive.
A company may make sales based on stress placed on recruiting and deceptive compensation models like the binary with legs.
We have reviewed companies which made good annual sales but we did not recommend them because of such aggravating factors.
An example is Nu Skin Enterprises which has built the business into a 2.28 billion dollar a year entity. Yet we did not recommend them in this review.
Again, this goes to show why you must not consider just a factor to judge an MLM company for business.
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Factor N° 8: Pros and cons
In our reviews we also give the pros and cons of working an MLM program.
Generally we recommend a company if the pros outweigh the cons. How can it be otherwise?
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Factor N° 9: Bans / Complaints / Legal issues
Only a few of the companies we reviewed and recommended had bans/complaints/legal issues.
Despite this we recommended them to our readers because of certain mitigating factors.
Let’s look at the matters brought up against these companies.
A class action lawsuit was taken against this company by its former representatives and was settled in February.
Previous employees claimed they were made to take training sessions without pay for which they won a negotiation for 6.75 million dollars.
Cutco Cutlery/Vector declared that their sales force are independent service providers but not paid workers. This was why they did not get money for going to the training.
Besides, Cutco offers every one of its training absolutely free and therefore feels that it is a sufficient return for their reps’ participation.
One more class-action legal action is pending in between independent department supervisors that are asserting the very same point as the previous legal action.
We are a little bit worried about the number of grievances against this firm.
Most of them originated from clients that are not getting their pending cashback checks. Fortunately they do ultimately get them.
The problem seems to come from an overloaded system or even an absence of training in matters of their bookkeeping system. This is because they do not contest the cash owed, but for the reality that they simply take a long time in some instances in paying it out.
The business has had legal action taken against it numerous times by a number of various federal agencies for making false claims on their products.
Among them was that they had high degrees of lead in several of their products. It was declared that this was triggering liver problems in individuals utilizing them. This accusation was nevertheless basically challenged in the courts as not real.
Various other suits were additionally submitted by representatives asserting mismanagement of repayments for services. The firm has actually resolved these by paying over 200 million out to these distributors.
There are still other suits. A few of them declare that Herbalife is simply a glorified pyramid scheme. The possibilities of making a living as a supplier for this firm is thus one in five thousand.
Yet, the company thrives and has largely survived the legal issues and continues to grow.
You can envision just how stunned we were that a business in this kind of company does not have any type of genuine suits against them. Instead, they have actually taken others to court for violation and also various other business issues!
We could find only two cases.
The initial instance was Woolf v. Mary Kay Cosmetics. The complainant won this case. She asserted she was unlawfully sacked from the business for not making her quotas for 3 consecutive months.
Her point was that this was brought about by ailment. Basically, she had cancer cells, and the situation concerned workplace legal rights to an independent professional for the very first time in history.
The second situation was against Touch of the Pink Cosmetics. They were purchasing remaining supply cheap from previous consultants of Mary Kay representatives and re-selling them for a substantial discount rate on their site.
This suit was won by Mary Kay.
On the matter of animal testing, Mary Kay has actually refuted it. They were even the first company in this niche to do this by signing a Peta Pledge.
The student vendors for this company needed to work 70 hours weekly.
Numerous universities have actually outlawed this firm from hiring their students for job in view of these lengthy hours and also the absence of benefits as well as cover for expenditures of their independent service providers.
They really think the Southwestern Advantage need to treat their contractors as employees who ought to obtain fringe benefits.
The University of Idaho, Durham, Maryland, Birmingham, and Harvard all took part in the ban. But the company still hires students. This is because the ban is legally non-binding.
This company has had their share of legal issues all involving false claims.
The firm got a caution in 2014 for proclaiming that their items are remedies for illness such as Ebola, Insomnia, as well as Parkinson’s disease. Various other cases were about Cancer, Diabetes, Autism, Dementia, Post Traumatic Stress Disorder, Heart Disease, Multiple Sclerosis, and Hypertension.
The above came from Young Living’s representatives making the cases on their sites. Ever since the business has adopted a code of ethics that all distributors must follow strictly.
The firm likewise faced significant problem in 2000 concerning the design of their distillers. This happened when an employee was killed in an explosion. And they paid $10,280 in fines for seven violations.
An additional situation in 2017 cost them $760,000 in penalties for unlawfully trafficking Spikard as well as Rosewood oils.
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Factor N° 10: Our view of / take on the company
We always round off our review with a view or take on the company where we give them either a thumbs up or a thumbs down.
While people’s opinions may be biased, in our reviews, they are based on the elements discussed in the review.
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Those are the 10 factors we use to write our MLM reviews.
Contrary to the majority of the commenters of our MLM reviews who label MLM companies as pyramid or Ponzi schemes, opportunities abound in the field.
Refunds and other headaches are not what you get into a business for. So it is of utmost importance to check all the 10 areas of performance of a company before investing in them. This will let you know if it is a good horse to bet your money on.
Now, which of the 10 factors do you think will give enable you know if a particular MLM company is good to invest in and make money?
Let us know in the comments box below. Thank you.
You may want to read:
- How to tell if an MLM company is good to join – From our 2019-2020 Reviews
- Our view or take of 50 MLM companies we reviewed and recommended
- Founders or Directors of the 50 MLM companies we reviewed and recommended in 2019-2020
- The three most common MLM payment structures: Unilevel, Breakaway and Binary
- MLM … Pyramid Scheme or Legitimate Business?
- A Venture Into the World Of MLM
- How To Find A Legitimate Mlm Organization Opportunity
- How To Select The Very Best Online MLM Program
- What are the Finest Mlm Network Marketing Favorites?
- Evaluating A Work At Home Mlm Opportunity Can Improve Your Chances Of Success
- 19 MLM companies we reviewed and recommended in 2019
- 9 MLM companies we reviewed but didn’t recommend in 2019
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