Evaluating New MLM Companies

Wednesday, June 30th, 2010 at 5:29 pm

Today there is a lot of pre-launch hype that seems to surround many new MLM companies. With dozens of new companies coming to market each year, it is important to spend the time evaluating those companies, just as you would with a company that has been in existence for a number of years. With careful due diligence you will be able to separate the future superstars from the cautionary tales of tomorrow.

To begin with look at who is founding the company. Do they have a track record in their particular product niche and in the MLM industry? Many of those starting new MLM companies have been associated with other network marketing ventures in the past. You would be wise to study up on their past business dealings. Was their previous company successful? Is it still in existence? If the previous company is no longer in existence, you need to examine the reasons behind their demise. Repackaged poor management is still poor management. In addition to the company founder, examine the other key leaders in the business to determine their level of experience with the product niche and the MLM industry as a whole.

Next take a look at the product. Does this product make sense in the market place. For example the marketplace is filled with Acai berry health juices, does the market really need another one? If the product makes sense in the marketplace, does it make sense for you? Is it a good value or is it something that could be obtained at a better price somewhere else? Can you envision yourself and others in your sphere of influence utilizing this product or product line on a regular basis? Without a unique angle, another product in marketplace full of similar products will be a difficult proposition. Look for the one thing that sets this company and their products apart from the competition. You will also want to examine the autoship program to determine if it is reasonable for the average consumer.

Take a look at the compensation plan. Does this plan make sense to you, and could you easily explain it to someone else? What type of MLM compensation plan does this company use? Are there restrictions on the number of downline levels you can draw income from? How easy is it for you to move through the compensation levels of the plan? Compare the plan of the new company to the plans of other existing MLM companies who are using a similar compensation plan.

Finally examine your gut feelings. Although a “ground floor” opportunity has the potential to prove profitable, there are also many of those opportunities that never quite make it off the ground. If you have any sense of apprehension, it is best to steer clear of the opportunity, until it has had time to prove itself in the marketplace.

When it comes to evaluating new MLM companies, don’t leave your common sense at the door.

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