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How Do I Investigate an MLM Program?

by: SBC Staff

 Sign up TODAY and earn $6,000 per month within 60 days or your money back!

 Become a MILLIONAIRE in one year!

 Earn $80,000 in five weeks!

 Turn $10 into $4,000!

 Refer 2 and Retire!

 One time $100 becomes $42,000!

 Guaranteed!  $10,000 a Month!

Could any of these subject lines be telling the truth?  How do you find out?  Granted, I’ve given you seven subject lines that are “over the top” so you would probably look no further than the subject line with these.  But what about the following ones:

If you’re willing to work hard, you can retire in five years!

Generate a generous residual income with our totally free program!

You can earn $500 a month within 2 months by following our easy program!

These ads certainly promise less and lead you to believe they may be more realistic, but how can you be sure?  Sadly, there is no easy answer except the obvious one: you have to analyze each opportunity carefully on its own merits.  Many ads base their outrageous claims on the maximum possible amount one person could earn under perfect circumstances.  They would require ten times the population of Earth to participate for you to make that much money!  The understated ads might be just as bad if the program is weak.  After all, paying to join a non-performing program that offers less is just as bad as joining a non-performing program that offers the world.  Joining a non-performing program that is free will still waste your time, which you should consider very valuable, so you need to exercise caution before joining any program, free or not.

We recommend you ask yourself these questions:

  • How does the sponsor of the program earn money?  Based on the amount of money they earn, is it possible to pay very many people the huge sums they claim?  Are there hidden sources of income that could subsidize the program?  For example, does your joining the program help the sponsor to generate ad revenue?  Look carefully at the calculation of your potential profits that the sponsor will normally post on his web site.  Analyze it to see if it makes sense.  It might actually work for one or several of the top-level participants, but you’re not likely to be one of those people!  Remember, the sponsor has friends and family!
  • Is the program selling a product that people need and want?  No amount of marketing is going to help you sell a product nobody wants.
  • How much competition is there in the market for the product you will be selling?  Does your product have specific advantages over the competition?
  • Is the product you will be selling a consumable that you can sell over and over to the same customers?  If so, you have a definite advantage.  You will not be working so hard for a one-time sale, but rather for a lifetime customer.  That has real value!
  • Is the product an information product?  If so, is it very similar to so many others on the market?  You’ll find tons of ebooks on Internet marketing on the web, many of them saying the same things.  But there are a few very good courses on Internet marketing that cost quite a bit but are worth every penny.  If your product is an information product, make sure it really distinguishes itself from the market in some unique way.
  • Do you believe in the product?  A simple question, but a vitally important one.  If you don’t believe in it, you won’t be able to sell it!  Get one for yourself, try it out, and don’t try to sell it unless you love it!  A side point related to this deals with your reputation: you don’t want to have your name associated with an inferior product.
  • Does the product attempt to take unfair advantage of a particular promotion being run by a reputable company?  An example would be some of the “Paypal” chain letter scams that take advantage of the $5 signup bonus for opening a Paypal account.  With this scam, a few people could earn enormous sums of money, but as with all chain letter scams, there aren’t enough people in the world for everyone to get theirs.  In the end, Paypal would be the big loser because they would have provided all the cash!  I think it goes without saying that you should avoid chain letter scams like the plague.  Add to that any program that attempts to take unfair advantage of a legitimate business’ promotions.  By the way, Paypal fixed this problem by requiring a $250 deposit into your account to get the signup bonus and by promptly canceling the accounts of those participating in this scam.
  • Does the program require you to do more than you are capable of doing?  Does it require you perform tasks you’re uncomfortable performing?  You’re going to be spending a lot of time promoting your programs.  You have to have the ability to perform what is asked of you and be comfortable with the terms.
  • Would this business have a chance of succeeding in the brick and mortar world?  Remember that the Internet is a communication medium.  It makes it easier to take your business to the world, but if the business is not fundamentally sound, it won’t work any better in the cyber world than it would in the brick and mortar world.
  • Contact some of the people sending you ads on the program and ask them for references from their downline.  Find out if they are supporting their downline.  Find out if they’re really making any money.  Put them on the spot and ask the difficult questions.  If they don’t answer or refuse to provide you with the email addresses of members of their downline, they may be hiding something.  They may just be protecting their own and their downlines’ privacy, which is okay, but you will probably be able to tell the difference.
  • And the old standby, does it smell okay?  If it sounds too good to be true, it usually is.

I hope these questions help you in your evaluation.  We’ll update this article from time to time to add additional factors you should consider.  We will also periodically provide reviews of various programs on this website.  Watch for them!


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