The product a multilevel marketer will be promoting to potential customers is the most important consideration when deciding on a business. Questions to ask are whether the merchandise is high quality, the pricing is reasonable, and is the seller interested and confident in the product line. In some cases, the product being sold is the MLM itself, with the only focus being placed on building a team, or down-line, from which the distributor makes commission. These are pyramid schemes
Each MLM will have specific plans and rules for compensation. Understanding the compensation plan prior to signing on is crucial. Additionally, it's important to know if there are start up costs to the program such as a demonstration kit or an inventory pre-purchase requirement. Also, business supplies such as catalogs, order forms and business cards generally must be purchased through the company at the distributor's expense. Usually, MLM payouts will include a percentage of product sales that may or may not vary based on personal sales volume. Often, recruiting new sales associates to the company may result in possible bonuses and additional income based on a percentage of the down-line team's sales. Some companies even require a minimum sales requirement before a distributor sees payment. Programs that require subscriptions or automatic ordering from customers will generally result in residual payments to the distributor from orders repeated monthly. Because each company's sales requirements and compensation plans vary, having a foreknowledge of the specifics is vital when choosing an MLM.
Business seekers should choose a sales model based on their individual interests and personality. If a business requires in-home sales parties or product demonstrations, a distributor must feel comfortable speaking to groups about his or her products. Sometimes the products are geared toward business-to-business transactions. In this case, the salesperson should be skilled at professionally written correspondence and oral business communication. Before deciding to sell a product primarily online, it is essential to discover whether the company's contract prohibits online advertising. Sometimes the company will require that Internet marketing is restricted to paid accounts on their business' website. Other companies have looser rules. In either case, if online sales are permitted, computer and Internet savvy will be required. Prospective distributors should evaluate whether their skills and personal comfort zone are well suited to the business they are considering.
In order to ensure the likelihood of success with a multilevel marketing program, researching the company's product, compensation model and mode of business are imperative when choosing an MLM. Failing to consider these aspects of a potential business venture can leave the sales consultant frustrated and discouraged. Disinterest in the product, disappointment in merchandise quality, meager compensation plans and an unwillingness to do the legwork required to market the product are all reasons why businesses fail. By following these guidelines, loss of one's investment of time and money can be avoided easily and finding a good fit can mean an enjoyable, profitable MLM business.