MLM / Downline Programs

MLM (short for Multi-Level Marketing) programs are basically programs where you can earn money from not only those initial people you refer, but from the downline of people that these top-level referals subsequently sign up.

The major benefits of these types of programs are that they allow you to work from home with minimal start-up costs, and the potential of making a large long-term residual income. Also with the power of the internet, it is now a lot easier to build a profitable downline using ever-evolving internet-based promotion techniques rather than the traditional recruitment system of buying and cold-calling leads.

Traditionally these programs have always received a bad press because in some cases there's a fine line between MLM's and pyramid schemes, but in the last few years more and more reputable companies are adopting a downline or referral based system to recruit product distributors, increase their database of customers, and ultimately increase their sales.

When deciding whether a network marketing company is legitimate, and not just a glorified pyramid scheme, you need to ask yourself whether the products available would interest you as a consumer regardless of the possibility of making money from building a downline. If you can answer yes to this question, and the company does indeed have a good solid product, then in most cases it cannot be labeled a pyramid scheme.

The key to success with MLM and network-marketing businesses is to not only recruit people, but lead them and teach them how they too can recruit people. By creating a successful team where every member below you can replicate the exact system that you are using and build their own downlines you will do very well in network marketing.

There are literally thousands of MLM companies so how do you know which ones you should join? Well here's my checklist of criteria that I consider before deciding which ones I should join:

1. Does the company have a good product?

I discussed this above, but to repeat this is important because not only should it ensure that it can't be accused of being a pyramid scheme, but it should offer a top-quality product to entice people to buy it and want to sign up in the first place.

2. Has it already established itself?

I generally only consider companies that have been operating and paying out for at least a year. Of course this doesn't guarantee that the company will be around for several years, but at least you know that it's not a fly-by-night outfit.

3. Does it have a good reputation amongst other distributors / recruiters?

Forums are a great place to find out what other people's experiences are of the company in question. If you see a lot of positive feedback on various forums all saying good things then you've probably got a winner.

4. Does it have a good compensation plan?

When it comes down to it, this is ultimately what most of us are primarily interested in. If you are going to spend your precious time promoting a company you want to know that the potential financial rewards are worth it.

5. Does it have spillover?

Spillover is simply where when you recruit excess people, these referrals get put under your downline members. For example if you have a 5x5 matrix and you recruit 6 personal referrals, then that 6th person will be put under one of your 5 initial sign-ups. This helps build their downline and helps keep them enlisted in the company because they benefit from your efforts as well as their own.

6. Does it still have plenty of potential for growth, or is it already oversaturated?

This is something worth considering because obviously if you have two similar companies selling identical products, with one having 10,000 members and one having 1,000,000 members, then you would want to join the first company because there are so many more potential people you can reach. 

7. Is the product priced at a level most people can afford?

If you want to build a large downline then this is an important factor, even if promoting high-ticket products, because if the product doesn't offer value for money then you will have great difficulty getting people to buy the product regardless of the price.

8. Who's the owner of the network marketing company and are they reputable?

This information can be quite hard to find out, but you will often find the answer on forums discussing the company in question, where some diligent person will have already conducted their own research, and shared their findings with other readers of the forum.