How DO You Choose Your Programme or Opportunity?
MLM Due Diligence-Benchmark
by Coach Steve Toth
Coach Steve Toth 
[center]MLM Due Diligence Benchmark[/center]
[center]Work in Progress[/center]
[center]There is no such thing as “something for nothingâ€[/center]
[center]Reading through company promotional materials, corporate documents, Web-site reviews and affiliate testimonials does not constitute "due diligence" - its indoctrination.[/center]
[center]YOU MUST COME TO YOUR OWN CONCLUISON AFTER COMPLETING YOU OWN DUE DILIGENCE IF YOU WILL TAKE THE RED-PILL OR THE BLUE PILL![/center]
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?â€
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?
[center]Resources[/center]
Paine Webberâ„¢ -The 12 Criteria of the Ideal Business
Paine Webberâ„¢ 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 Webberâ„¢ 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
© Copyright 2007 All rights reserved.
Jul 20th 2007 15:39
[center]MLM Due Diligence Benchmark[/center]
[center]Work in Progress[/center]
[center]There is no such thing as “something for nothingâ€[/center]
[center]Reading through company promotional materials, corporate documents, Web-site reviews and affiliate testimonials does not constitute "due diligence" - its indoctrination.[/center]
[center]YOU MUST COME TO YOUR OWN CONCLUISON AFTER COMPLETING YOU OWN DUE DILIGENCE IF YOU WILL TAKE THE RED-PILL OR THE BLUE PILL![/center]
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?â€
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?
[center]Resources[/center]
Paine Webberâ„¢ -The 12 Criteria of the Ideal Business
Paine Webberâ„¢ 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 Webberâ„¢ 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
© Copyright 2007 All rights reserved.
Jul 20th 2007 15:39
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Comments
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Karen Weir
 Local Internet Advertising ConsultantWhat an amazing piece of work you have crafted here Coach Steve! Like Jenny, I have NEVER seen such an extensive list of things to look for. I especially like that you indicate that if a business has just 3 of those elements, it is a good investment. I have absolutely nothing to add! LOL You've covered it all. The only comment I will make is that when choosing a business, many people get trapped by their emotional response - often because it is presented to play on the emotions. They may be told that they must "act now" to take advantage of some special bonus. That could be why they neglect to perform their due diligence. I am a student of the Law of Attraction, and believe firmly in taking "inspired" action, and never acting in haste. You need to bring your brain into alignment with your heart, and NEVER act for fear of missing out. ~ Karen ~ Jul 21st 2007 08:42 |
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Coach Steve Toth
Thank you both to Karen & Jenny; I'm also a student of the Laws of Attraction, being in this group is proof! I always wonder, if people think about when they write their ads? Based on how it's written and who is writing and from where it is being written from meaning where are they at moment in term of their intention's, emotions, etc it will act like a filter. Like attracts like! To Your Success, Coach Steve Jul 21st 2007 09:00 |
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Coach Steve Toth
One more thing! I also have noticed as an observer that in the MLM space business is mostly conducted from the EGO. Like it is fear based, it appears to be all about the money, their is a major force to control, exclude(cult like-you are either in or out), creating silos, kingdoms and empires. A lot of it mirrored from corporate America. "The more you push-the less you get" I wonder if people are aware that it is possible to create an MLM based on trust, integrity, love, energy, aliveness, inclusion, integration and trusting the universe where money is a measure only of your success and growth in the difference you are committed to make. Jul 21st 2007 09:35 |
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Jenny Stewart
 Hi All, Karen - for once I do not agree with you (sound the bells people - this wont happen often!!) The comment " if a business has just 3 of those elements, it is a good investment" refers to Paine Webber's criteria for the Ideal Busines. But in my view, this is only true AFTER all the due diligence has been done and comes out clean - and then I would prefer to consider more than three of Paine Webbers list - because, as you rightly say, you do need to have your heart in it as well and also the absence of some of those 12 criteria could cause enormous problems (especially if it ties up your capital for a long time ) Erring of the side of caution I would prefer to see at least half for it to be a realistic investment and the other half that it does not have have to be things that will not cause you problems In any event Due Dilgence first - and then, as in alal businesses - you must take a CALCULATED risk. Jul 21st 2007 12:22 |
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Karen Weir
Local Internet Advertising ConsultantOh my goodness. I didn't think it was possible, but Jenny - it happened! However, I do agree that Paine's list is to be used AFTER the due diligence has been completed. When it comes to the ideal business, the ideal is in the opinion of the beholder... in my opinion. As an example, being portable may not be important to someone with a brick and mortar business downtown, limited cash outlay may not be important to someone with unlimited funds and a good business plan. I can go through this Ideal list and eliminate several in certain circumstances. This is simply Paine Webber's opinion of the Ideal Business, and individual's may differ depending on the business model and their specific circumstances. I continue to think that 3 is a good benchmark of a good investment in a business that has passed the due diligence test. ~ Karen ~ PS. but I still think you're brilliant even though you're wrong <wink wink> Jul 21st 2007 12:54 |
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Coach Steve Toth
That is a great response Karen except there is no such thing as right or wrong. All there are; opinions, perceptions, understandings based on world views. To Your Success, Coach Steve Jul 21st 2007 13:03 |
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Karen Weir
Local Internet Advertising ConsultantOh Coach Steve, in my shock over Jenny disagreeing with me, I overlooked your one more thing post - and how true it is! MLM has gotten a bad rep, not because it is a bad model, but because those representing it have DUPLICATED all that is wrong with corporate structures. When you take your MLM and make it YOUR business, forget about duplication, and be original, creative, cooperative and truly there to develop relationships - you CREATE the ideal business. ~ Karen ~ Jul 21st 2007 13:05 |
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Jenny Stewart
Hi Karen (sorry Steve but this one has to be dealt with before we stop the discussion on your Subject of the Benchmarks for Due Diligence on MLMs) So basically you DO agree with me (HAH) that we have to do our DD first - thank heavens for small mercies! lol - so our point of disagreement is that you will be happy with 3 and I will have to have at least 5 ! I guess I am just more mistrustful or more lazy than you!! lol Jenny Jul 21st 2007 13:07 |
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Jenny Stewart
Hi Coach Steve, Glad to see your addition of No. 46 - PayPal. When it comes to MLMs - their "Acceptable Use Policy is quite clear. It is however surpising how many supposedly respectable mlm's ignore it. The penalty for being caught is having your PayPal frozen and then suspended!! And if they catch you out - they are unmerciful. Extract from from PayPal's site. "Multi-level Marketing, Pyramid and Matrix Programs "You may not use PayPal to send or receive payments for any form of multi-level marketing programs (including online payment randomizers), as well as matrix, pyramid and Ponzi schemes, "get rich quick" schemes, “Autosurf†programs, High Yield Investment Programs (HYIP), or other similar ventures. Multi-Level Marketing Multi-level marketing plans, also known as "network" or "matrix" marketing, include any business in which a person receives proceeds from his or her own sales of goods or services, of recruited members, or any combination thereof. Similarly, PayPal prohibits as a Multi-Level Marketing plan any business in which payouts occur at two or more levels (both by the individual who actually sold the product as well as by the person(s) "upline" that recruited the selling individual). PayPal prohibits Multi-level Marketing plans whether or not they are legal under the laws of one or more states." So this is an important one to watch - because our PayPal accounts contain our hard earned money. Thanks Coach for this important addition and thanks to BJ Brown for teaching me about the consequences of unacceptable PayPal useage. Jenny Jul 21st 2007 13:17 |
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Karen Weir
Local Internet Advertising ConsultantI can't debate that point Steve, because of course you're perception of right and wrong is your opionion, and therfore absolutely correct - there really is no right or wrong. Perhaps it would have been best had I said, my perception is more accurate? (see now winking icons would be nice here) Jenny, yes I'm afraid we really don't disagree much at all. We're going to have to keep searching for something we can truly debate. I'm sure we'll find it if we look hard enough. I am interested in the paypal rules you have quoted. I am aware of a program that is not approved by paypal. Should that be taken to mean it is not a good investment? This same program was turned down by another payment processor as well. I know people in the program who are not concerned about this, and although I was really not aware of the paypal rules as stated here, I thought it was a red flag. ~ Karen ~ Jul 21st 2007 19:04 |
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Jenny Stewart
I dont think the issue of an mlm using paypal is so much as a red light when it comes to their honesty, but it certainly means that it does not comply with paypal's own terms of acceptable use - and therefore is sloppy at best. And if they have overlooked this - then what else have they overlooked? It does means that you personally are at risk if you use paypal with their business - as it is your paypal account that can be frozen. - although if they are paying out with paypal - they stand to have theirown funds frozen and then you wont get paid either. Not a good sign anyway in my book - the mlms that i am familiar with that are legi usually use bank transfer or Alert Pay or one of the other online payment systems. It would be good to hear from someone with more experience on this topic. Jul 21st 2007 19:55 |
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Lisa Lomas
I have to say this: Paypal do not Accept any sort of MLM. They are primarily for selling of Goods and services. They were created mainly for Ebay firstly and have become widely used. I have used many other banks and have had really good runs. It cannot do anygood for someone to think a program stinks just because they won't use paypal. As Paypal have made it impossible for some countries to receive money, I have known this from personal experience. A man in South Africa could never use Paypal effectively because of where he lived. There is more than one reputable bank online. Hope this helps. Lisa Jul 28th 2007 05:34 |
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Lisa Lomas
This article is fantastic, I do like to read something well thought out. Thankyou Lisa Jul 28th 2007 05:47 |
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Jenny Stewart
Hi Lisa You have made a very good point about Paypal - some countries have problems with it. And I am not saying that a programme stinks because they cant use it. I AM saying that if an mlm uses it - and they know that it is against the rules (as ignorance of the law is never a defence! lol) - then it IS a warning sign - because they are putting all their people's paypal accounts ast risk. And that is negligent at best Jul 28th 2007 05:54 |
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Coach Steve Toth
Thanks Lisa for your comments. I would like this site to become more professional in the sense that people would use the principle of attraction vs pushing their products and opportunities. In this way people would have to become more creative with their message to attract the type of client they are looking for. At the present, I can only spend just a few minutes here because everything begins to occur for me as noise and I get a headache. Of course this could only be me and others could be having a great time. To Your Success, Coach Steve Jul 29th 2007 00:00 |
Everyone talks about the importance of doing your Due Diligence, but it is very rare to see anyone talking about HOW to do it.
You have started something here Steve. It is the first time I have ever seen anyone spell out exactly what we should be looking at and what we need to know before we decide to join a programme or not.
You have called it ÇMLM Due Diligence - Benchmark - but from what I have read so far. - a lot of it can apply to any internet business.
I look forward to seeing what people have to say.
I personally love your number one point. - How many times do we forget to find out if these companies exist physically and if they are on the old fashioned telephone - with a real telephone number! lol It is so obvious and so often forgotten!
Jenny
Jul 20th 2007 17:55