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With over 15 years of researching and experience, I wanted to share with you what I have found from personal experience. I believe that “Multi-Level Marketing (MLM)” Companies and Party Plan businesses do NOT provide a real, lifetime Residual Income for the overwhelming majority of people involved.
I am not saying that some people won't make money... But, I have found that they don't provide long term residual income. I have yet to find an MLM company, or a traditional business that even comes close.
Why do 95% of people that are trying to build a business at home fail at earning a secure, monthly residual income? Because they are trying to build a business that does NOT meet ALL of The 12 Success Factors.
A residual (passive) income is income that continues to come in month after month, year after year, from something you did ONE time in the past. If your business (or a business you are considering) meets every one of the 12 Success Factors, I believe you’re right on track to building a business with a solid, monthly residual income that will be there for your lifetime and for generations to come.
If it doesn't, perhaps you should revisit, regroup and rethink your plan of action.
12 Success Factors
COMPANY TRACK RECORD - Most companies fail within their first 5 years. The company MUST be in business a minimum of 5 years (10 years or longer is preferable).
FINANCIALLY SOUND - Company needs to be financially healthy - Debt Free is preferable
STRONG MANAGEMENT - Strong Fortune 500 style management - Company should NOT be run by MLM people — They own the downlines and start making decisions to make themselves wealthy off the back of everyone else
UNIQUE CONSUMABLE PRODUCTS - Products must be highly consumable by ALL - Products people are already buying — No new money being spent
COMPETITIVELY PRICED - Products must be considerably less expensive than the stores they are already shopping at - Great value in being a customer
HIGH MONTHLY REORDER RATE - 95% or more of your customers shop every month — This is with BOTH business builders and customers - If people aren't ordering, they quit — There needs to be overwhelming value to be a customer and stay ordering whether or not they’re making money
LOW PERSONAL PRODUCTION REQUIREMENT - Low monthly order requirement with NO monthly quotas — No matter what position you advance to in the company
LOW COST TO START - Very low cost for anyone to join **Under $50.00 — No buying inventory with their membership fee - The enroller should NOT be paid a bonus on this fee
If people are quitting, they are not ordering. Must be overwhelming VALUE to be customer whether people are making money or not – This is what creates life-long residual income.
No ‘ground floor’ deals — What happens when it’s no longer “Ground Floor”?
Bad news travels fast — This is why most MLM companies get a bad name — When people get hurt and lose money, they tell everyone they know
NO BREAKAWAYS/BINARY - You should NOT be penalized for enrolling someone better than you — You should not lose a person (business partner) because they do better than you. Leadership development should be rewarded – NOT penalized. Company should be built on a sense of gain… not a fear of loss. Many MLM companies today use Binary Plans — They really go against SOLID business principles — They reward the non-producer in order to get paid.
There needs to be 100% Monday back/Satisfaction Guarantee… no questions asked!
It needs to be safe for everyone. Both customers and business builder.
Missing ONE of these factors is a detriment to your business future.
One other important tip: Ask for printed, documented, annual income statistics as well as a documented monthly re-order rate. If that is not provided, consider that a red-flag that you should be concerned about. When considering starting a business, you NEED to know the numbers!