When to "Just Say No" to a MLM Opportunity

If you have an interest in MLM, you need to understand what is illegal, and what will not work for you, so you don't waste any time. Here are some things to watch out for:No reasonable person would buy the product without a business opportunity attached
The income stops when the recruiting stops
Money changes hands between people, outside of the company
You can't buy the product online with a credit card, only cash and money orders are accepted
You would not be comfortable prospecting the same way you were approached
The company will not provide written policies and procedures to reviewHere is a good example of the first item. A company that recently switched from an MLM model to retail was charging their distributors over $170 monthly for access to training materials. Although it has yet to be arranged, it is rumored that in the retail model people will pay $39 monthly. What a difference! And even at that price, it will be difficult to sell this because there is so much similar information available on the Internet for free. Another example would be any company whose products can be found for sale on the Internet at reduced prices. If the government investigates and determines that nobody buys the products retail, and the only "customers" are distributors, they will shut the company down.The second item is also something the government looks for and they will shut down companies who operate this way. Again, the company is supposed to be selling some products or services at retail. If the compensation plan pays people only for recruiting, it is considered illegal. This can get tricky because you need to review the policies and procedures too. Even if the compensation plan appears to reward retail sales, some policies include a clause requiring distributors to recruit a certain number of people every month in order to continue receiving commission payments. This also means distributors can never retire.If money changes hands without going through the company, that is also illegal. That means the company cannot issue a 1099 to the IRS at year end.If you can't buy the products with a credit card online, you have no protection against faulty products or failure to deliver. The cash and money orders can't be traced back to the company to prove they made money. Again, this is an illegal practice.Before you sign up with a company, ask yourself 2 things:Could I recruit people the same way I was recruited
Could I teach all of my team members to do the sameThere is an old saying in MLM, "duplicate or die." If you can't answer "Yes" to both of these questions there will be no duplication on your team.Finally, when you join a company there is always a contract. You must abide by certain rules or they can terminate your business, just like traditional companies have rules of conduct. If the company won't let you read the contract, but you will be bound by it upon joining, then do NOT join!There are so many legitimate and legal opportunities out there! Don't associate with the ones that are not. You will only be wasting time and money.