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How To Identify A Legitimate MLM Business

Aug 17, 2007
It's no secret that when multi level marketing (MLM) is mentioned, many people think of illegal pyramid schemes and other scams. Follow these tips to check out an MLM company and you will be able to avoid MLM scams.

1) Contact the Better Business Bureau (www.bbb.org), the State Attorney General's office and the Federal Trade commission (www.ftc.gov or 1-877-FTC-HELP) and at no charge you will be able to check the records of the MLM companies and will get some great tips about how to safely evaluate them.

2) Check Google and other search engines for "company name + scam" and you will find out quickly if there are complaints.

3) Check out home business message boards and scam.com for bad reviews. Obviously, there are always a couple of people that didn't make money and want to blame the company. Do proper research and you will quickly know which distributor had a legitimate complaint and who was just plain lazy.

4) Go to www.mlmwatchdog.com and see if any problems are posted there.

5) Ask your attorney to review any documents before you sign them.

6) Present the entire program to a trusted friend and see what he or she thinks. Take their advice under consideration. You never know, if the company does turn out to be legit, then that friend is a great first recruit.

7) You should be focusing on selling products or services and not recruiting more distributors. If this is the case, proceed with caution and at your own risk.

8) Be leery of requests to make large purchases up front.

9) All MLM's, just like any type of business, require work. Beware of false promises of easy money making schemes. Beware of guarantees such as "everyone is making money with this automatically."

10) Do the math for yourself. Have a trusted advisor, friend, accountant or attorney check you and make sure that the payout plan is actually feasible.

11) You don't want to sell products or services with false "miracle" claims to them. Actually try to promote the products and services yourself to make sure that you like them and WANT to promote them first and how they work.

The MLM industry is one that holds great promise. Unfortunately, there are a few undesirable people and companies. By following your due diligence, asking questions and proceeding with caution you should be safe. Check these things out first!
About the Author
Sam Crowley is a best-selling co-author and motivational speaker.
You can see Sam's home business at http://www.DefendYourDream.com . Sam's mission is to create ten millionaires in the next five years
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