Life Force International, a network marketing company, meets all of the following criteria:
29 Principals for Screening a Network Marketing Opportunity
Section 1: Financial & Corporate 1.Company is at least 3 years old (five years old is even better).98% of all network marketing companies do not survive their 5th birthday.Investing your time and money in a young company is an enormous gamble.Would you invest your after tax dollars in a stock that had a 98% chance of failing? Don’t commit financial suicide.Find a company that is solid, stable, five years old or better and still GROWING. 2.Company is debt-free, or is well capitalized with a low debt/asset ratio.Debt is as bad for companies as it is for individuals.The greater the debt, the greater the risk of failure.Find a company with a track record of low debt or no debt. 3.Company has a history of consistent expansion and sales volume growth.If the company is not growing…something is wrong.Network marketing is designed to multiply…right?If it’s not growing it’s because people are leaving the company faster than new ones are coming in.Maybe it’s temporary, but maybe not.Buying stocks at the bottom (bottom feeding) is not recommended.Companies are usually at a bottom for a reason.The same is true for network marketing companies.Find one that is growing consistently each month.It’s a simple truth, but very powerful. 4.Company is well capitalized and has the funding to sustain exponential growth (under-capitalization is the NUMBER ONE reason for failure in new NM companies).When companies grow fast they are forced to expand fast.This requires deep pockets for new buildings, new computers and new machinery to make more products faster.Be sure to find out about how well capitalized the company is.For private firms, your only chance is to ask the owners how they plan to finance their growth (or do they expect to have fast growth—a more important question). 5.The company has a high credit rating from Standard and Poors, and Dun and Bradstreet.Their financial dealings are regularly reported and their credit worthiness is a matter of public record.This report is $45 and can be ordered from D&B at http://www.dunandbradstreet.com. 6.Company management team has a proven, successful track record, which is verifiable.Managing a network marketing company is a highly specialized skill.Find a management team that can show you a resume of success IN NETWORK MARKETING.Other corporate successes don’t apply here. 7.Company is forthright about who they are in the process of marketing their opportunity to others.There is no deception during the sales process regarding the name of the company or the fact that they are engaged in multi-level, “network” marketing (MLM).Enough said…you don’t want to have to trick people to meetings or presentations.Sometimes it’s not the company which encourages this, but the upline.Avoid this tactic at all costs.After all, if they are hiding the truth, they must be embarrassed about something…right? 8.Management team is accountable to outside sources. (Board of Directors, Advisory Boards, Stockholders, etc.).It is critical that the corporate management team listens and responds to field leaders or other industry experts.Dictatorships run by “prima donna” personality types are bad news.Avoid them like the plague.Also watch out for upline trainers who are egomaniacs and manipulative control freaks.If you start feeling shamed or manipulated during the investigation process….RUN. 9.Company is committed to following all local, state and federal guidelines for operating a network marketing company.If you aren’t familiar with the codes, contact your AG’s office for your state and ask them for the guidelines.While you have them on the phone, ask them for a list of blacklisted companies, or companies with complaints on file.See if the one you’re investigating is listed.Also check with the Better Business Bureau.We like to see that a company is a member in good standing with the BBB. 10.Company does not have an exclusivity clause in their contract.They must not have a history of distributor harassment or check-pulling.Distributors should be treated as independent contractors.They should be free to pursue as many opportunities as they desire without the threat of termination, loss of commissions, ostracism, or reprisal of any kind.The only legitimate rule regards cross-recruiting (recruiting sideline members into other deals), or sponsoring downline members below your 2nd level into other programs.Technically, anybody below your 2nd level is off-limits to you for any other purpose other than to help them in the primary program.This is a fair and just rule.All other restrictions with regard to limiting your ability to engage in other opportunities should be viewed with a great deal of suspicion. 11.Company has a written, clearly defined code of ethics that it will enforce, even if it means terminating successful distributors who violate it.Call customer service and ask them if anybody in the company has ever been terminated for violating the rules.If not, beware…it may mean the top leaders are actually running the company and impervious to punishment for violating ethical codes of conduct.Many companies are intimidated by their top leaders because of fear of loss, if you hear of this going on, avoid the company. 12.Reps are given direct access to the company principals.Where possible, we also like to see rank and file members given the opportunity to be involved in the “inner circle” meetings, the marketing committee meetings etc. giving them a legitimate opportunity to have an impact on the future direction of the company. Section 2: Products and Services 13.Company products and/or services are consumable. 14.Company products and/or services have a unique and compelling story line that sets them apart. 15.Retail products and services are priced by the company at fair market value.Where possible, brandcomparisons are made with local retail stores.Pricing needs to be at or below the best market price currently available through conventional distribution channels.Commodity products with wide-spread availability, such as long distance phone service, need to be offered at substantial savings for the program to qualify.Nutritional products should be compared with the closest equal that can be found at Wal-Mart, or your local health food stores.Unique products can carry a premium, but not more than 20-40% higher than the market equivalent. 16.Products and services are safe and in compliance with appropriate regulatory agencies…the more compliance,the better.In some cases, 3rd party lab validation of quality, purity and potency is an important factor.The endorsement of the products or services by reputable 3rd party industry experts adds further credibility. 17. All products and services are protected by a minimum 30-day money-back guarantee. 18.The company shows a financial commitment to research and development.Their products are maintained on the cutting edge of science and technology.Make sure the company has a track record of releasing new products and/or enhancements.Ask them what the budget is for research and development. 19.Products and services deliver the results for which they are intended.Customer satisfaction is high.Strong product or service testimonials are prevalent throughout the distributor and customer base.Return rates are low, and retention of long-term customers is above the industry standard of 15%.Company does not make exaggerated claims, or hype their products in a manner that cannot be substantiated. Section 3: Marketing Plan 20. Company offers a no-cost, or very-low cost ($40 or less) entry fee to become a distributor. 21.The marketing plan should be a Compressed Unilevel paying out at least 60% on the first three levels.Standard Unilevels, Binaries, Stairstep Breakaways, and Matrix plans are unacceptable because they typically violate one or more of the principals listed above.We are looking for plans which reward the part-time distributor with profit in the first few months, without penalizing the career income earner who is looking for a large income through depth.Compressed Unilevels, which are properly designed, do the best job at achieving this goal. 22.Marketing plan obligations are completely fulfilled based on the personal consumption of the products or services.Initial inventory purchases, coding bonuses, front-loading, or any monthly sales quota (or “maintenance”) which goes beyond the amount required for reasonable monthly consumption, are grounds for disqualification of the program. 23.Company products, services and business opportunity are truly beneficial for the last man in.The opportunity is not a “short window”, where only those in at the beginning can succeed.In order to qualify, products and servicesmust be strong enough to attract consumers even at the stability stage of the company’s growth in a given market. 24.The marketing plan has a NET payout of at least 50%, but not more than 70%.The average cost of doing business for a wholesaler or manufacturer is 17%.In addition to that, they will need another 10% for R&D, marketing updates, new product additions, expansion, growth into foreign markets and net profits for stockholders/owners.Therefore, any company that pays out more than 70% is jeopardizing their financial future.On the other hand, payouts below 50% (net) are based on corporate greed, excessive profits, and a lack of concern for part-timers.When calculating the payout percentage, average monthly “breakage” must be considered.Oftentimes, the more complicated a plan is, the more hidden breakage there is.A simple plan with the right pay structure is best because it’s easy to teach. Section 4:Support Services 25.Company has professional and courteous customer service and/or distributor relations departments on site. 26.Company commits significant resources for support systems like high-quality, professional sales aids, internet web pages, opportunity calls, training calls, conferences, etc. 27.Sales aids and marketing materials are reasonably priced.They should NOT be a profit center for the company, but offered at cost to distributors.Companies providing free sales aids or mailings get high marks. 28.Company must demonstrate that their priority is to the customer first, the part-time distributor second, the MLM professional third, and the corporate managementteam fourth.This commitment can be easily verified by the structure of their marketing plan, the retention rates of their customers, the financial success of their part-time distributors, the pricing of their sales aids, the size of their customer service department, etc. etc. 29.Hotel meetings and trainings are optional and preferably held no more than monthly.Pressure is not brought tobear on distributors concerning the attendance or funding of hotel functions.Annual conferences, or regional quarterly training seminars are appropriate and necessary for the growth of a network marketing company.Weekly opportunity meetings or trainings are oppressive to part-time members who are looking to build their business from home.
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