
MLM Due Diligence BenchmarkWork in Progress
There is no such thing as “something for nothing”
Reading through company promotional materials, corporate documents, Web-site reviews and affiliate testimonials does not constitute "due diligence" - its indoctrination.
YOU MUST COME TO YOUR OWN CONCLUISON AFTER COMPLETING YOU OWN DUE DILIGENCE IF YOU WILL TAKE THE RED-PILL OR THE BLUE PILL!
Most of these questions were born by using common sense, which seems to be missing in our culture at the moment.
1. Does the company have a physical address and contact numbers?
2. Did you visit their office?
3. Did you get the names of the executives and completed your own investigation about their character, reputation and how many companies have they started in the last few years that are still around?
4. Did you get a copy of their Bio?
5. Did the company go public before or shortly after their launch?
6. Is payment accepted by check or money order only?
7. Is this product or service based on an actual value and need-? - is it a tangible product or service?
8. Is this product or service based on an “opportunity?”
9. Does the company allow unlimited recruiting of distributors in your area – with no territorial protection or other provisions for preventing market saturation?
10. Did you get the product or service yourself for your own evaluation? (test drive)
11. Is it likely the product or service could be sold successfully on their own merits without going through an MLM distribution system?
12. Are you expected to buy or subscribe to products or services in order to qualify for commissions or bonuses or to advance?
13. Is there anything comparable on the market today?-if not find out why?
14. Does the company offer a buy-back guarantee?
15. Can all product claims (such as health claims) be backed up by reliable research?
16. Are orders filled and shipped promptly?-did you call existing distributors to find out what happens in the field?
17. Are manufacturing and expiration dates printed on consumable products?
18. Can you as a distributor make a good income for the time you spend selling the products – without recruiting a single person?
19. Is the commission paid by the company for selling the products so low that you have to recruit a down-line in order to earn a significant income?
20. Would distributors several levels above you – who had nothing to do with the sale – receive as much or more total payout per sale (including commissions and bonuses) from the company as you would get for selling the product or providing the service?
21. Did you request that company disclose average payout to distributors by percentiles, so that you can determine your chances of success?
22. Did you ask for net payout (after subtracting product purchases) for all distributors who ever signed up, including those not now active?
23. Did you find out how high the expectation is for you to purchase products, services, training, etc., over a period of time, in order to be a serious participant?
24. Are the company’s wholesale prices low enough to allow a reasonable profit when marking up for resale?
25. Are retail prices so high that they must be sold at wholesale to achieve any volume?
26. Does the product or service priced at a premium to support a large network of distributors?
27. Are you requested or even frequently motivated to sell the product or service to your friends, associates or family?
28. Did you ask what percent of their top “distributors” are no longer actively involved with the company – and never attend opportunity meetings?
29. Did ask for a copy of the recruiter’s down-line and up-line so that you can contact participants at several different levels to see if any have achieved “time & freedom.”?
30. Did you notice that your recruiter is heavily relying on the “credentials” or “character” of others involved in the “opportunity.”?
31. Does the company offer an adequate support infrastructure to handle a temporary burst of volume?
32. What is the turnover in your recruiter’s up-line?
33. Are conferences and training programs, audio and video tapes, etc., free of charge or are you expected to pay for them?
34. Did you find how long do you have to wait until you receive your commission and what are the deductions and expenses they will take out?
35. Did you call distributors in the company now and asked them about what the company culture is like?
36. Did you call ex-distributors to find out why did they leave?
37. Is the company using very reputable and notable people in their advertising and marketing?
38. Are you attracted to the profit you will make or the product, service, opportunity?
39. Are you being emotional about the business, could it be that your judgment is clouded-can you remain objective?
40. Is the company taking advantage of technology to automate the business processes so you can focus your attention on lead generation, marketing and sales?
41. How and where can you access the technology and what are the costs?
42. Are you able to explain the product or service in simple terms to others?
43. Are you able to explain it with great enthusiasm?
44. Does the product or service make you proud?
45. Did you ask your recruiter what isn’t perfect about the business-what problems did he have?
46. Is the company approved by PayPal?-is there a satisfactory payment history with no complaints?
Resources
Paine Webber™ -The 12 Criteria of the Ideal Business
Paine Webber™ is a major American financial company that defines "The Ideal Business" as having the following twelve qualities.
1. The Ideal Business sells the world rather than a single neighborhood. In other words, it has an unlimited global market.
2. The Ideal Business offers a product, which enjoys an inelastic demand. (Inelastic refers to a product that people need or desire almost at any price.)
3. The Ideal Business markets a product that cannot be easily copied. This means that the product is an original or, at least is something that can be copyrighted or patented.
4. The Ideal Business has minimal labor requirements. The fewer personnel are the better.
5. The Ideal Business operates on a low overhead. It does not need an expensive location. It does not need large amounts of electricity, or advertising, or legal advice, or high-priced employees, or a large inventory.
6. The Ideal Business does not require big cash outlays or major investments in equipment or product. In other words, it does not tie up your capital.
7. The Ideal Business enjoys cash billing. In other words, it does not tie up your capital with lengthy or complex credit terms.
8. The Ideal Business is relatively free of all kinds of government regulations or structures.
9. The Ideal Business is portable or easily moveable. This means you can take your business and yourself anywhere you want to.
10. The Ideal Business satisfies your intellectual needs and promotes personal growth and excellence. There is nothing like being fascinated with what you do.
11. The Ideal Business leaves you with free time. In other words, it doesn't require intensive labor and attention for 12, 16, or more hours a day.
12. The Ideal Business is one in which your income is not limited by your personal output (Leverage). In the Ideal-Business, you can have 10,000 and more customers as easily as you can have one.
Paine Webber™ says that if a business has just three of these qualities it is considered to be a good investment.
Better Business Bureaus, Inc
FBI Fraud Center IC3
National Association of Attorneys General
Federal Trade Commission
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Coach Steve Toth
Real Coaching Radio Network
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