Due Diligence:
If You Go Into MLM, Do So With Your Eyes Wide
Open
Due diligence is about investigating 'the opportunity' before you
spend your hard earned money signing up.
If it
sounds too good to be true it probably is.
How many times have you heard that
old adage? Talk with almost anyone in network marketing and they will make their
opportunity sound like the due diligence has already been done for you. All you
will need to do is:
-
show the product to people you
know and you will be fighting them off as they thrust their money at you; and
-
sign up a couple of others who
also want a fast path to becoming a millionaire.
Does it sound
too good to be true? Of course it does, and it is. However, as with any
business, with time, hard work and serious effort it is possible for you to be
successful.
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An offer
too good to refuse?
At the end of a 'free'
seminar (not network marketing) by a world renowned presenter, put on to encourage participants
to sign up for his full version, we were offered the opportunity to take
a full set of courses for $30,000, a saving of more than $100,000, if we
signed up immediately. "Don't worry if you don't have the money now" was
the advice. "With what you will learn you will soon have it."
Network
marketing uses similar principles. This is common in sales of anything
anywhere. Enthusiasm is high while you are listening to the 'opportunity'. An offer
that plays on your sense of loss if you don't take advantage of it right
now results in recruits who sign up immediately.
We did deliberate for some time before going
into network marketing but we have learned much more since, both about
the company and the industry. We are still happy with our choice but we urge you to look before
you leap (do your due diligence) and after you have
looked, look some more. |
Material in sub-sections of this section will help you
decide if MLM is the home business for you. We look at the MLM industry itself
under the following categories:
-
Reasons
why
network marketing has such a bad name. In this sub-section we: look
at the accusations of 'scam' that are made about the industry; suggest you
do your due diligence on all of the expenses and requirements before you
sign up; look at the areas of sales, recruiting and previous personal
experiences for reasons for the bad name; and finally include a paragraph on
our personal view.
-
The pros
and cons (and reality) of some of what you are told. We begin with a
list of the 'pros' of a network marketing business, then follow with a
corresponding list of the realities (the 'cons') of each of the 'pros'; we
next look at the pros and cons as they may relate to you personally, and the
pros and cons for the company; finally we have a list of possible long term
pros and cons.
-
The
type
of person who is likely to be successful. We look at the type
of person we see in network marketing, the people who are successful and
finally provide a list of requirements without which it will be difficult
for you to succeed.
-
Performing your due diligence
— the 8 steps that the
US
Federal Trade Commission (FTC) recommends you follow before you sign on and
some additional comments from us.
At a more
personal level, there are sub-sections that clarify:
-
Exactly
what are you hoping to achieve? We have
several lists to help you clarify your objectives, i.e. why exactly are you
considering this and do your objectives fit with what you can expect from
the company you are considering. Then, what the
company is expecting from you. Finally there are comments on your personal
commissions and on building a downline.
-
What you are willing to do to achieve it
(what’s expected)? We begin with the expectations you are likely
to have formed from hearing your upline's proposal. If you haven't done your
due diligence there is a reality that is likely to hit you once
you start. Included here are a few comments on what to expect from your upline.
At the end of the sub-section, we look at some
of the realities of expenses and time commitment.
And finally,
we refer you to some other web sites we have
found. One of these has well thought out and researched arguments on why network
marketing is something you should be doing. To balance that, we have included a
similarly well thought out and researched website that argues that MLM is not a
business with which you want to become involved.
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