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Due Diligence - Do Your Research Before You Involve Yourself In MLM

Aug 18, 2008
It's important to learn the hidden language of MLM business. Words and phrases are structured to sound as good, as enticing, as possible, but their meanings may be a little different than they seem.

For example, the MLM pitch '60 per cent of income from all product sold goes to the distributor network' seems very businesslike, very straightforward, but there is a lot more to it than meets the eye. It's up to you to do your due diligence, to inform yourself, and to separate the lingo of MLM from the reality of this business model, and how it truly operates.

Let's break down this statement into real-world figures that we can all understand: If $7.70 is the wholesale price, plus a 30 percent markup: which comes to $2.30, then the total is $10.00. That leaves $6, (which is the 60%) minus $2.30 which leaves $3.70 to come from the wholesale price and the company income.

You must determine how much retail volume is really happening in the company you are investigating: sometimes, a lot of wholesale business is done, and it is important to distinguish between the two, as each type of business has its own bottom line.

If there is very little retail happening in the company, then they are offering, based on the above figures, only around $3.70. Less money goes into distributor pockets when the company has 'breakage' built into the plan. What is breakage? If you are unfamiliar with this term, it is used when you don't quite make the bonus: it goes back into the companies' pocket.

When you are determining exactly how much money you are going to make from MLM ventures, these breakdowns are incredibly important. Remember to factor in everything before you make decision, and to be sure you've looked at all the angles, and considered the hidden meanings behind any statements you've been given.

There is a lot of information on my website to help you judge for yourself the pros and cons of MLM: educate yourself and you'll be safer, better prepared, and have a higher likelihood of success.

The truth is, many times, there is not as much money in it for you as you may have been led to believe: you need to understand this crucial fact right from the start. Most money will find its way right back into the company's pockets, instead of your own.

I can't stress enough how important it is that you read everything the company supplies you with: all their policies, procedures, and comp plan manuals. It's better to do the work in the beginning, and go into a venture with your eyes wide open, aware of any risks or downsides, than to enter into an agreement wearing rose-colored glasses, only to be disillusioned when things don't go at all as you planned.
About the Author
John GilbertGrant is an MLM survivor and refuses to do Network Marketing the old, hard way. 90% of Companies fail - or fail to deliver. If you have failed in MLM, it is not your fault but you could do it better. JohnGG's thoughts and experiences are at MLM-Truth-and-Lies.com
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