How to Identify a Great MLM Company

When making the decision to begin a home based business it can be an intimidating task to find the right one.

Hours can slip by as you research MLM companies online. You become instantaneously popular as "business partners" across the country add you to their "prospect" list while courting you with hopes that you'll become their newest "business partner".

Here are some tips that will ensure you're making the best decision in joining a particular home based business.

You'll first want to start with a little research. You'll probably find lots of claims to overnight riches with products and services that sell themselves.You'll also find off-putting reviews online from disillusioned people about every known MLM company…even ones that have stood the test of time.

The Amway Safeguard Rule identifies three key points to assess any network marketing opportunity and verify that it is in fact legal as opposed to a pyramid scheme. These guidelines were a result of the Federal Trade Commission (FTC) filing a suit against Amway in 1975 in which they were accused of being a pyramid scheme. A pyramid scheme would be an opportunity in which there is the absence of a product or service; the only purpose is recruiting and the only thing changing hands is money.

In 1979 the court sided with Amway. Out of the court decision the Amway Safeguard Rule set the legal standard for multi-level marketing, network marketing, or direct selling companies from that time on.

The standards of the Amway Safeguard Rules state:
1.The opportunity requires the retail sale of products or services before one can qualify for any recruiting commissions or sales.
2.The opportunity has a mechanism in place to prevent the stockpiling of inventory of physical products with no intention of reselling.
3.The opportunity offers representatives who choose to leave a buy-back provision on unsold, unopened inventory or products.

Those three points should be answered in the affirmative as a first step in researching a company.

Next, think about your interests and/or natural abilities. Can you get excited about the product or service that the company is offering? If not, keep looking. There are many MLM companies out there; regardless of your interests, you can find one that will pique your interest and keep you excited for the duration. This, in turn, will make you a more successful salesperson.

After you've identified one or two areas of interest, compare companies offering comparable products or services. Ask these questions:

1.How long has the company been in business?
Find out a little about the company, good and bad. Check out the ratings at the Better Business Bureau, as well as the Direct Selling Association.

2.What is the initial investment?
You can join many good companies for a few hundred. If you are being asked for more, consider carefully.

3.What is your market and marketing strategy? Is this something that is offered globally?

4.How about the compensation plan?
Many believe so much in the power of residual income that this is a deal breaker. Also, find out, if you can, if the compensation plan has changed. You do not, under any circumstances, want to join with a company who keeps changing the rules.

5.What is the recurring cost?

Finally, after locating a company, you generally join with someone as your "sponsor". Ideally your sponsor is a mentor; someone who is experiencing success in the business and can be a wealth of knowledge and encouragement. Joining with the right person can leverage you towards success. Take time to be choosy about this.

MLM is a terrific opportunity; simply be informed so that you don't find yourself publishing a gripe online about recruiting gone wrong.