Multi-Level Marketing 101: An MLM Checklist for Beginners

If you’ve been on social media any time in the last year, you’ve likely heard a friend, or even friend of friend, advertising a product they sell from the comfort of their home. It’s possible they’ve even tried to recruit you to begin selling the products so that you can supplement your own income to the point of quitting your day job.

Just what type of opportunity might afford this? They come from companies, which sell products ranging from clothing, to jewelry, to nutritional supplements and beyond, that are turning to multi-level marketing instead of traditional brick-and-mortar stores in order to make sales.

While you should carefully vet all the fine print as it pertains to the company you might be interested in representing, there are some general rules that apply when considering if this line of work is right for you.

Since your income will be very dependent on your own sales, be sure that you truly love what you’ll be selling. After you’ve narrowed it down, do some research on the product itself.

1. LEARNING THE LINGO

   What differentiates a “typical” sales rep opportunity from a multi-level marketing opportunity? A company that is relying on individuals to sell products to the public by word of mouth or direct sales is an MLM. In other words, there’s no actual store you can go to in order to buy the product otherwise.

   In an MLM, you are sponsored by someone who’s already involved: Those people are what you’ll hear referred to as an “upline,” and they will all receive a commission from your own sales. However, you will also recruit people to sell the product, too, and they’ll form your “downline.” You will earn a commission on their sales.

2. IS IT LEGIT?

   If the company’s business practices are sound (and you should do lots of research in this area prior to signing on) then yes, it’s legit. If you’re thinking, “Wait, this sounds like a pyramid scheme,” do make sure that it is not; pyramid schemes are illegal. In pyramid schemes, there are typically large startup costs, and lots of hidden fees. Moreover, revenue isn’t made necessarily from selling the product, but by the number of recruits you’re able to bring into the business. Stay away from anything that sounds suspect.

3. CHOOSING THE RIGHT FIT

   There are scores of MLM opportunities out there and the options are diverse. You can choose to align yourself with just about any passion: clothing, diet and wellness, jewelry, makeup, you name it. Since your income will be very dependent on your own sales, be sure that you truly love what you’ll be selling. After you’ve narrowed it down, do some research on the product itself, especially if it falls into the weight loss, skin care, diet and wellness categories. Has the product been tested and proven to work? Is it safe? For all types of products, be sure to research the kind of feedback it gets from customers before signing on to be a part of the program.

4. CHECK THE FINE PRINT — AND THE LARGE PRINT, TOO

   Your final step should be a really thorough examination of all the company’s materials. Check out all the marketing and sales plans you can obtain. If you’re still feeling like you’re onboard, clarify the exact startup costs (often you’ll be obligated to buy a certain amount of product before selling it), and see if you can get proof of earnings from current or former distributors. What might be classified as a great income for some might not be worth your time, especially if you’re juggling a traditional job, too. Finally, find out what it takes to leave the company, should you decide to down the road. Are you signing a binding contract of some sort? Will the company buy back any product you still have on hand? 

Like any job, an MLM opportunity might be the perfect fit, or something out of a bad dream. With some due diligence, you’re more likely to arrive at the decision and opportunity that’s best for you.