For many decades, direct selling, multi-level marketing, and network-marketing companies have been facing legal and ethical problems. Many companies promise more than you’ll get.
So, what do you actually need to know when you start as a distributor at a direct selling, a multi-level marketing or a network-marketing organization?
What makes a company a fair and good business partner?
Most people start as distributors because they want to earn money. Knowing how much distributors earn, therefore is key for (future) distributors.
As our results show, most companies do not say much about this aspect. Very often, (new) distributors are told during training courses that they can earn a lot. But these figures are only hypothetical. Important is to know what is actually earned.
But what to do in case you do not get this information? We recommend asking your recruiter, upline member or headquarters to provide you with actual income figures.
If you do not receive a sufficient answer, think twice whether you want to start your business at this company.
Distributors can only earn money when they invest less than they receive back. That is why it is good to know the costs of starting as a distributor. Companies that provide transparency here, make it easier for you.
But be careful: apart from the official costs, there might be hidden costs. A typical example is as follows: the starter package might cost little, but you are motivated to invest far more (for stockpiling products, motivational material, and seminars with entrance fees). Just reflect on whether you want to make such investments.
The amount of company turnover in your own country is relevant: it indicates the size and the success of the company.
If you can find out about the development of turnover over the last couple of years, it is even better: declining figures might indicate that the company is losing its attractiveness. Also, a big turnover might be problematic: it might indicate that the market is saturated. In both cases, you might have difficulties selling products and recruiting other distributors.
The number of distributors in your own country shows the attractiveness of a company. It is particularly useful to see how the company size has developed throughout the last 3-5 years.
If you can compare the number of distributors with the company turnover, you even get to know something more relevant: the average turnover per distributor. This is a very good indicator for how easy or difficult it is to earn money.
For many decades, direct selling, multi-level marketing, and network-marketing companies have been facing legal and ethical problems.
Some companies offer unrealistic income opportunities, make illegal product claims, and have too strong a focus on recruiting instead of selling products (=pyramid schemes).
A company that does not say anything about existing problems does not support creating ethical awareness among distributors and consumers. A company that ignores these widespread problems and sweeps them under the carpet is not very trustworthy.
It is far better to work for a company that supports the creation of ethical awareness.
Is information on the company products easily available? This helps (future) distributors to decide whether they want to sell them. For clients, it provides good insight in what they can buy from distributors.