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Daddy's Upline's Been Arrested! How Not to Get Caught in a Pyramid Scheme

Aug 17, 2007
My Dad was always looking to make money from home. In the 1960's there weren't a lot of options. He started all kinds of businesses, from bars to installing sprinkler systems.

But my Dad knew cars. He came across this product which would keep your car from losing traction and spinning out of control on slippery roads. It worked and you could get rich. They cost about $500 each which was A LOT of money in 1969. So he bought 10 and stored them in the basement under a sheet. That way my mom wouldn't find out about his new adventure.

One day the phone rang, and it was my mom calling from work.
"Karen, hide the newspaper NOW! Don't let your Daddy see it!" (She found out anyway).
"Because his business partner's been arrested. Your father's in one of those pyramid schemes!" (Like Dad wouldn't find that out at the next meeting?)

And that was my introduction to network marketing.

Needless to say when I began my network marketing career in 1988, I was afraid of getting ripped off. I literally blasted my first sponsor with over 70 questions. Poor woman. She didn't know what she was getting into with me. Everyone else just believed what she told them. I wish I'd known about the 7 Critical Elements then! It would have made choosing a company so much easier.

We are skeptical of what we don't know. If everyone else who is rich got that way by working 80 hours a week, and climbing the corporate ladder, or discovering the wonder widget, how in the world can you make 6 or 7 figures in a part-time business from home?

Multi-level marketing is a perilous business. On the surface, everybody says the same thing. And everyone claims to be legit. Even the scammers. And the "MLM truth" sites hate everything, so they're not a big help. What's a mere mortal to do?

Enter the 7 Critical Elements of a Primary Business. There are elements that every solid network marketing opportunity should have in order to give you the best potential for long term income.

Here they are in a nutshell:

1. Unique Products: Products must serve multiple market categories, be unique enough to get patents, and the products have to serve the largest possible group. Are they consumable? Products with one-time-sales makes residual income difficult. Does the product line make sense as whole? Or is the company just putting stuff in a catalog to sell? In today's highly competitive market you don't want to have a bunch of me-too products and compete solely on price or convenience. Would people buy these products or services if they weren't distributors?

2. Company Stability: The ability to give you long-term business and financial security, based on their company and business history. It's best if the company has been around longer than 5 years, and shown financial stability and a track record of payouts. Is the company a member of the Better Business Bureau (U.S.), the Direct Selling Association or other highly regarded associations?

3. Marketing System: System to market primary must be compatible with the internet marketing techniques and current consumer trends. Today's consumer is different than 50 years ago. Today's consumer has more choices than ever before. Is the marketing system promoted by this company reflect today's consumer habits? The marketing system must be simple and duplicatable. Network marketing is a business system for non-business people.

4. Company Management: Must be led by successful leaders in business with a vision for the future growth, not management mode. Does the company have the talent at management level to effectively keep a good product pipeline and service its distributor base? Do they have a plan to carry this out? Are they generating positive publicity in the public media - creating a buzz - that makes the distributor's job easier?

5. Global Reach: Must be ground floor in their global expansion. Management must have prior experience in global expansion. Is the compensation plan the same around the world? What is the size of their product offering in new countries? Do they have the infrastructure to support globalization?

6. Compensation & Incentives: Maximize your income based on your efforts. Must payout at least 50% of sales dollar, must offer unlimited depth within compensation plan. Must offer Fast Start Bonuses, must offer other incentives and recognition. You must be able to achieve $10,000/month true residual income with less than 500 people in the organization. Does the company you are evaluating document its payout with U.S. IRS?

7. Pay-It Forward: Does the company Pay-It Forward to the masses. They must give back globally what they are taking out. Are their products and policies ethical? Socially responsible? Is the company's vision is to make an impact on the world in a positive way. Do they encourage significant charity corporately and amongst their distributor base?

These criteria may seem a little too rigid to you. Maybe you just like the product you market. If you just want short term cash, fine. But a business takes too much heart and energy to waste on a so-so company. There are companies that meet all of these criteria and more, so it is possible! If your company can meet all 7 of these critical elements, you're on your way to tremendous success. And you'll never end up in a pyramid scheme.
About the Author
Karen Hurd has been a full-time network marketer
since 1988. She is a writer, teacher and wellness educator.
She lives in Virginia Beach, VA with her husband and 5 children.
She jokes that she built her business while her children slept, and now she makes money while she sleeps.
Email Karen at: lifestylcreatr@cox.net
Meet the MLM Maniac here
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