How to Select a Network Marketing Company

Alternative MLM Industries with limited exposure and appeal:

If the company you are evaluating markets products or services through one of the following industries, apply points accordingly. Please do not select more than one industry for each company. Select the industry which best describes the company's product focus. Then, move points to the subtotal line

The Nutritional Supplements Industry will continue to grow at a phenomenal rate based on the aging of the 60-70 million baby boomers. In 1993, Nutritional Supplements did $27 billion. In 1995, this industry did over $92 billion. Currently over 10,000 boomers are turning 50 every day. When the leading edge of the baby boomers reach age 60 in 10 years, trend experts predict the nutritional industry to be 5-10 times larger than it is now.

In an article which appeared in SUCCESS Magazine entitled "The Curve of Prosperity" Charles King, a Harvard Business School Ph.D. diagrams the growth stages of successful network marketing companies.

In summary, a company experiences several major growth stages as it matures into a stable, long term opportunity.

The first growth stage is know as the "pioneering stage." This is the time when companies are most vulnerable and usually go out of business.

If and when a company reaches $50 million in annual sales, that company experiences a phenomenon known as "critical mass". This "critical mass" marks the beginning of the company's "momentum growth phase." During this momentum growth, a company can go from obscurity to becoming a household word within 5 years.

In momentum, the name of the company and its exclusive name brand products start to become popular, company sales begin to explode, and distributors experience 5-10 times the level of success they previously experienced or will ever experience again without divisional diversification or entry into foreign markets.

The last stage of a companies growth is "stability." This is a great time to own a large distributorship but a tough time to build one. The company is so well known, distributors have to be more skilled at handing objections and many prospects will have already been approached many times. Growth in the stability phase is significant, but slower. The most important criterion when selecting the best time to get involved is annual sales volume.

The following table documents the seven phases of a company's growth. We assigned points to each phase. Find out the annual sales volume of the company you are evaluating. Apply the following points scale to the company's annual sales volume. Subtotal points below.

Which Compensation Plan is the Best? The five most commonly used pay plans in the network marketing industry are the Breakaway, the Unilevel, the Matrix, the Two-Up and the Binary.

Your job here is to review the following five plans and choose the one you feel is the best. Using the information below, you will be able to determine which one we chose.

We took the hypothetical monthly group volume total of $40,000 and applied it to the following network marketing compensation plans w/o bonuses. In other words, there are 400 distributors in your downline purchasing $100 per month...how much do you make?

*Each example is based on the average pay out range for all companies studied. These hypothetical examples are for evaluation purposes only and they do not imply that distributors will make these incomes. Income potential is based strictly on the commitment of individual distributors.

Here is a count of the
AVERAGE Number
of pay-out levels in each pay plan.

Test #3: Compensation Plan

We ranked the following five compensation plans with the below points scale. The point spread is varied based upon the many variations within each pay plan. For example, a high ranking breakaway plan will score a 6 based upon maximum benefits and limited restrictions within that plan. Another breakaway plan can score a 4 based on limited pay-out, limited levels, or high quotas. Top pay plans ranked high based on fairness to distributors, pay-out potential, and the downline building incentives.

Pay Plan	Points Given
Breakaway	4 - 6 Points
Binary	7 - 9 Points
Matrix	2 - 7 Points
Two-Up	0 Points Unproven Plan
Unilevel	6 - 8 Points
	======
Points Subtotal:

This section may appear to be the least complicated. However, when selecting a company, this is possibly the most important criterion of all. Here is a simple method for analyzing the ownership and management of a company. Retrieve as much information as possible from the following sources:

Remember, even the legitimate companies are going to have some complaints from a few disgruntled distributors. What you don't want to find is frequent litigation, many complaints, or criminal activity.

In this test, all company management teams were given a perfect score of "10". Then we proceeded to remove points for specific concerns related to company management. Below is a list of the concerns which resulted in a loss of points. Start with "10" and take off points accordingly.

Past or present criminal activity, numerous bankruptcies, inexperience, lacking past successes, unethical activity of any kind, tolerance of unscrupulous staff or distributors, unprofessional conduct (foul language, harassment, etc), poor personal money management, poor communication, dominant personalities, apathy, short-term vision.

Points Subtotal: _______

In this category, we gave all companies a perfect score. Then we began taking off points for any of the concerns listed. Please refer to the following test for a list of these concerns.

Since the test results indicated that the nutritional industry is the #1 product industry in network marketing and since all of the top 10 companies are nutritional companies, we decided to only include the results from this industry.

In order to rate the top lines, we started each company with a perfect score of "10 points" and then we began eliminating points as we ran into concerns. Below is a list of the concerns which resulted in a loss of points. Start with "10" and take off points accordingly

Incomplete line, herbal medicine focus rather than nutrition focus, undocumented product claims, exaggerated testimonials, inexperienced scientists formulating products, unsafe ingredients, no result using products, bad results on product, inaccurate labeling, too much or too little of key nutrients, low quality/cheap ingredients,, complicated product line, no money back guarantee, gimmick products (thigh cream, Ma Huang weight loss pills, diuretics, spray vitamins, colloidal minerals, etc).

Points Subtotal: ________

The company/track record exam is based upon the analysis of each of the 400 companies in our study. The ratings for the top 10 companies in network marketing make up page seven. Additional information can be obtained by contacting the person who referred you to this report.

Each company starts with a perfect "10" points. Points were eliminated for any of the following concerns. These are common concerns other than those mentioned in the previous six criteria tests. Start with "10" and eliminate points according to the number of concerns. Subtotal points below.

Company association with unscrupulous activities or people, excessive hype, false science, undocumented claims, no ownership of products (products are contracted out), overemphasis of compensation plan over products, company endorsed slandering of other MLMs, unethical company recruiting campaigns, extreme start-up expenses (too high/ too low), constant back-orders, high attrition rate, low re-order rate, low start-up capital, heavy debt, poor money management, stagnant growth, drastic changes in product line, drastic changes in compensation plan, continuous back-orders, "sweet-heart" placement deals and/or special favours, privileges, or rewards to distributors which are not directly tied to performance, corporate employees with downlines.

Points Subtotal: ________

TOTAL POINTS: ________ (60 points possible)

D.C. Falter Marketing reviewed over 400 network marketing opportunities using the above testing system. Over 30 companies scored highly in testing. However, among all of the companies tested, only one company scored 59 out of 60 points. Usana Health Sciences. 

Over 400 Companies were investigated !

This is just a PARTIAL listing of some of the major companies we studied:

Achievers, Amway, Awareness, Body Wise, CellTech, Changes, Destiny, Discovery Toys, Enrich, Equinox, Excel, For*Mor, FreeLife, Herbalife, HTN, IHI, Infinity2, JewelWay, Kaire, Life Plus, LifeTronix, Longevity, Mannatech, Market America, Melaleuca, Natural World, New Vision, New Image, Neways, Nikken, NuSkin/IDN, Nutrition For Life, Oxyfresh, Rexall, Shaklee, Shaperite, Soaring Eagle, STS, TPN, TravelMax, Tupperware, USANA, Voyager, Wellness, Watkins, etc.

Also ... Here are some of the health product lines we studied:

Colloidal Minerals ("Dead Doctors"), Ionic Minerals, PycnogenolTM, Soy, Melatonin, DHEA, Blue-Green Algae, Parasite Cleansers, ManapolTM, Tahitian NoniTM, PyruvateTM, Juice Caps, Magnets, Melaleuca Oil, etc.