1. Look at the supposed MLM Company’s website & Research the Founders.

First suspect clue would be no street or city address, worse yet, only an email address, no phone number.

Then look for the pictures and names of the owners of the company. Not having these on a website is a quick absolute reason NOT to join. Make sure they have Management experience in Direct Sales with no past failures because history tends to repeat itself.

Some wise, seasoned MLM distributors doing their Due Diligence Investigation will use “http://maps.google.com/”  type in the address of the company change it to satellite view and look at a satellite picture of the size and location of a supposed MLM Company office.
2. RUN FROM A COMPANY TAKING ONLY BANK WIRES, MONEY ORDERS OR CHECKS:

Only use a credit card that will accept charge backs. Returns? Honest companies allow refunds within 60-90 days (8 states require a year)!

Money by FedEx – UPS only? Yikes! Scam Time! A trained MLM Detective will tell you the scam artists do this to avoid Postal Fraud charges!

A PMB (private mail box) address is an indicator of dodging Postal Fraud Investigators

3. EASY MLM INVESTIGATION TRICKS:

Check who registered the website domain of any new company claiming: amazing, incredible, proprietary, never seen before in the universe, revolutionary, products, services or technologies! Check http://www.whois.net/ for the domain lookup. Companies with good offerings would register a name 6 months to a year ahead of time.

4. DON’T SPEND OVER $500 ON PRODUCTS TO START:

There are over 22 states that require registration if an opportunity (not just MLM but includes MLM) requires you to spend over $500. Two states say it must be kept under $200.

If a company says join for free and spent $501 for product – They had better be Registered! Run if there is no way to join for under $500

Here is a list by the FTC of States requiring “Biz Opp” registrations. Remember this if a recruiter is hustling you for $over $500 an no registrations. Why join? They may get shutdown for not having the state Business Opportunity registrations! Why risk joining? You can lose time and money! There goes your opportunity! http://www.ftc.gov/bcp/franchise/netbusop.shtm
5. ALOT OF NUTRITIONAL PRODUCT HYPE:

Raise the dead? Live 130 years? Cure Cancer (which is an illegal claim for any nutritional)! If not a nutritional skip down to #7.

A. Get a list of the MOST critical ingredients in the MLM’s nutritional product and put them beside your computer.

B. Go to the U.S. Government National Institutes of Health nutritional research website PUB MED. Go to Pub Med after you read the next two sentences! http://www.ncbi.nlm.nih.gov/sites/entrez

C. Look up the major ingredient(s) by entering its name in the search box.

D. Read through the scientific studies. Some may be complex, but the END sentence usually gives you a good idea if the study was a Plus or Minus for the product. Read over at least 10 articles use a piece of paper to keep track of studies like this Study #1 Good Study #2 good #3 What did they say? (or just What?) Study #4 Good Study #5 Bad. Make your own judgment!

8. MLM, PARTY PLANS & NETWORK MARKETING COMMON SENSE:

Don’t let the money over-excite you! Use the products or services being sold first! If they excite you, then look at the money.

You should try sharing and selling the products/services to test them out. Spending some money to test a company and their offerings is a wise thing to do.

9. COPY THE PAY PLAN AND ASK LOTS OF QUESTIONS:

Is the compensation plan “seamless” (ie you only need to sign up in one country but can market worldwide).This is particularly important if you don’t want to limit your income.

Then find an expert to analyze it. Don’t get caught up in high percentages such as 70% or 80% payout. This usually means the payplan has built in breakage (examples Below).
I don’t think any company can stay in business with only 20% to 30% for the corporate support such as product development, shipping, employees, insurance, electricity, online support ect.

A Binary Plan is a payplan where there is only 2 legs. Here are a few things to look for with Binary payplans: Read Full Report on Binary Payplans

When they quote high percentages in commission this is because you typically only get paid on the weaker of the 2 legs.

Example #1: if you have one leg doing $30,000 in sales and the other does $500 you would only get paid on the $500.00 and the rest goes to the company unless someone upline has a stronger leg opposite of you stronger leg.

Example #2: Watch out for what we call converting your dollars to tokens. What we mean by this is you pay $130 for the product but only get credit for $100 in volume where does the extra $30 go? You guessed it to the company this is breakage.

If you just have a small group of 100 people that equals $3000 in volume you would not get paid on and if you have a larger group of 1000 that is $30,000 in volume you are missing out on. This can add up to huge amounts as your team grows in the long run.

Looking at the history Binary Plans are short lived there has only been only 2 companies that have lasted more than 10 years with this type of payplan. It also limits international growth since most foreign governments have made them illegal.
10. HOW LONG HAVE THEY BEEN IN BUSINESS.

Has the company been running for at least 2 years and are they an established leader in their field? What is the history behind the company and their track record?

95% of the start up companies in this industry don’t last more than 3 to 5 years
Best time to get involved in any company is between years 4 to12 backed by history, the top earners in most companies that have been in business more than 15 years started in this window of time.

No One wants to put our credibility and influence on the line if they company may not last wouldn’t you agree?