As the economy gets worse, you’ll probably see more desperate people looking for ways to earn money as quickly as possible. One such way is to join an MLM company. I’ll warn you - there will be more scams. So it’s more important to remember to be rational when evaluating any business opportunity.

Remember, it’s a BUSINESS DECISION not a decision based on belief or enthusiasm (though if the business checks out financially it’s great to believe in what you’re selling and the company you sign up for).

Joining an MLM company is about as easy . Anyone who is considering joining an MLM company has more than likely been introduced to the concept through a sales pitch. So these MLM tips are geared towards finding the right MLM company, and how not to get burned by joining.

First, I want to acknowledge that some MLM based companies are completely legitimate and reputable, they aren’t all evil scams waiting to pounce and suck you dry. But some are. Many of the most aggressive ones are.

Even some fully legal MLM companies knowingly deceive and manipulate potential recruits with unrealistic and hugely exaggerated promises of success and big money. So the first tip is to never make a decision about joining an MLM company until you’ve done your homework and researched the company and their track record with the Better Business Bureau.

Second, take claims and promises made with a grain of salt. No one wants to be bitter, suspicious and cynical, but MLM companies are absolutely famous for exaggeration, hyperbole, lying, whatever you want to call it. If the offer seems too good to be true, then it undoubtedly is. Don’t quit your day job just yet, wait until the checks start rolling in.

Third, make sure you read everything in the contract and registration materials of any MLM business before you sign anything. You may even want to get some help straightening out the meanings of all the legal jargon from a lawyer. This may sound excessive, but the fine print found in those documents is the way many MLM businesses circumnavigate the law.

For example, many MLM businesses include a clause in miniscule writing and in the most confusing language possible that basically says that you promise not to sue them if you lose everything while attempting to sell their products under false pretenses.

Also in the fine print, you can often find averages of how much independent distributors made the previous year. This number may be significantly different than what you were promised initially, but because the numbers are disclosed in the contract, regardless of how small and well hidden the figures may be, you can’t sue for being purposely mislead.

When considering joining an MLM business, the main thing to remember is to not get caught up in the glitter and emotion of promised success and living the American Dream.

The truth is that those who make nothing, or even go into debt as MLM distributors greatly outnumber those who hit the big money, and it isn’t necessarily for lack of dedicated effort. Be careful. Keep your head. Question everything. Good Luck.

Before anyone joins an MLM company, talk to distributors of all kinds (look for ones running ads in local classifieds sections). Ask them how much they’ve actually spent and made in the business (or for an idea of what is reasonable). Also, watch Believe the Movie. It’s a funny story but also gives some insights into the MLM business - so you’ll know what to watch out for.

Here is another MLM Review - about the (in)famous Quixtar. Here is a wikipedia article about Quixtar.

Quixtar is the current North American alias of Amway. In 1999 the founders of the Amway Corporation decided to take their business online and rechristened it Quixtar. Coincidentally, it was in the 1990s that the highly publicized and embarrassing government scrutiny of Amway took place, resulting in the corporation being fined and ordered to stop making outrageously exaggerated promises of income to potential distributor recruits.

Quixtar sells the same products Amway has always carried, including Nutrilite dietary supplements, XS Energy Drinks, personal care, home care, air and water purifiers and Artistry cosmetics. Unfortunately, like their mother company Amway, Quixtar also has a reputation for making golden promises that rarely, if ever, materialize.

In a 2004 investigation, a Dateline reporter took a hidden camera to a Quixtar recruitment meeting in New Jersey. There his recruiter promised him, “If you’re somewhat serious . . . if you invest maybe, say, 10 to 15 hours a week in your business . . . you could generate in the next 12 to 18 months, an extra quarter of a million.”

The real figures are nowhere near that impressive. If you take the time to thoroughly read the Quixtar registration materials, the average “active” distributor made $115 a month in 2005 ($1,380 a year).

Bo Short, a previous “success story” and poster boy for both Amway and later Quixtar quit the company after he began realizing that many of the promises of certain wealth were untrue, and that many distributors were actually being ruined financially.

When asked about how the top level executives were able to be so successful with Amway and Quixtar Short answered that they get most of that money from sales of promotional books, tapes, and tickets to conventions and speaking engagements. All the “completely optional” activities distributors are constantly encouraged to buy and participate in, in order to be successful.

The bottom line is, if you’re considering becoming a distributor for Quixstar you need to be aware that the odds are not in your favor, nor have they been since Amway was founded in 1949. Despite the moving and possibly tear-jerking motivational speech you may hear, despite all the “success stories,” know that the vast majority of those who have made it big with Quixtar or Amway did so through a side business, producing the motivational materials you are being subject to, and charged for.

I haven’t been very good at posting an MLM joke of the week, but hey, I don’t have to keep all my promises do I? It’s really just an intention…so here goes.

Adam, an MLM distributor dies and goes to heaven (of course). When he gets to heaven, St. Peter meets him at the gates. He says that Adam has a choice  - he gets to CHOOSE where he’ll go - heaven or hell.

Adam tells St. Peter that he would like to check out both, being the open minded type of guy that he is. So he takes a tour of heaven and finds it to be exactly what he expected. Peaceful, beautiful and perfect. Then he asks to go see hell so he can make an informed decision.

St. Peter takes him down to hell and Joe is shocked when he walks in. There is loud music playing, people are partying, happy, smiling, wearing nice clothing, having sparkling conversations, etc. It’s totally upbeat and he can’t believe it. He tells St. Peter that he was quite the socialite / partier on earth so he figured he will choose hell - much to his surpise.

They leave and go do the paperwork and return in about 15 min. Oh yes, there is paperwork in heaven too!

When Adam opens the doors of Hell this time, he is equally shocked. It is dark, people are wearing rags, they are NOT smiling and in fact are grimacing. They are sweating, shoveling coal, and clearly NOT happy.

Adam hurriedly goes to the guy who appears to be their leader and asks, “Hey, what gives? I was just here 15 min. ago and this place was nothin’ but a big party. Now it’s all grim and depressing.”

The leader guy looks at Adam and says: “Oh, I know what happend. When you came earlier, you must have caught us during our opportunity meeting.”

MLM Scams

First, we recognize that all MLM companies are NOT scams. This post is only to warn you to do your due diligence, because some MLMS ARE scams.

MLM scams have been around nearly as long as MLM businesses have been around, and over the years hundreds of thousands, if not millions of people around the world have been victimized to some degree by an MLM scam. Of course when someone finally discovers he or she has been scammed, the first reaction is to want to try to get their hard earned money back.

Unfortunately, MLM scams are usually among the smartest of fraudulent businesses and have devised ways to make legal recourse for victims nearly impossible. There are a few main methods employed to avoid ever having to answer for financial damages caused to victims; the most common method is to make themselves impossible to contact.

Having false addresses and phone numbers, or numbers that never allow you to actually speak to a live person is an easy way to doge having to answer uncomfortable questions. It is also common for the headquarters of MLM scams to move frequently so when lawyers come knocking, there is nothing left but an empty warehouse.

A more sophisticated and foolproof method of dodging responsibility is by adding confusing and often hidden clauses in the company contract. Many MLM businesses, even legit ones, require new recruits to sign a contract compiled of vast amounts of information, and buried somewhere in there in miniscule writing is an agreement not to sue the company for financial losses.

They literally make taking people’s life savings with little or no chance of any return on the investment legal. So when a victim realizes that he or she has been pouring time and money into an MLM business venture and is getting nothing back, he or she has already signed a contract to do nothing about it.

It’s best to just not get involved in MLM businesses until you’ve checked with the Better Business Bureau to make sure it’s a legitimate company. If you do decide to invest in an MLM business, make sure you read every line of the contract carefully, with a lawyer if possible, to make sure you understand all the implications before you sign. And if down the road you do discover you’ve been scammed, good luck to you and your lawyer getting any of that money back.

Review of Herbalife MLM

If Herbalife is one of MLM companies that you are thinking about joining, there is enough controversy over the company and its products to make informed investigators a little wary. The tricky part of dealing with Herbalife is that many of their marketing materials do a good job of avoiding the company name (sort of like Amway actually).

For example, according to residents in Sacramento, there are hundreds of signs posted across the city advertising “work-at-home” opportunities and weight-loss regimes that are all connected to Herbalife distributors but fail to mention the company name. Consequently, it can be easy to get started on the distributor track without even knowing what you are getting into.

And, even though there are definitely some incredible success stories connected with Herbalife, a large number of Herbalife distributors are unsatisfied with the financial profits they bring in versus the cost they have to put out during business endeavors. This is evidenced by blogs and other websites that warn potential distributors about the dangers of signing up. There have also been a few lawsuits over this issue.

Most importantly, there have also been health issues and other criticisms connected with Herbalife products. For example, they once contained an ingredient called Ephedrine that was later determined dangerous and banned by the FDA. Some studies also show a tendency for the products to cause hepatitis.

I also noticed that over 60 people a day search for the phrase “problems with herbalife” - not a good sign.

And finally, Herbalife products have also been criticized for being overpriced and nutritionally unbalanced. Since many of the products are meant to be meal replacement options, unbalanced nutrition can have a huge impact on your personal health.

A few good things connected with Herbalife are their donations to children’s charities as well as their role in sponsoring several Olympic athletes. Knowing that those athletes are sponsored by Herbalife also tends to make some investigators skeptical of the products though.

Although this report has polled many different resource, it may be wise to speak with experience Herbalife veterans and do a little of your own research before forming a concrete opinion.

Here is some recent good news for Herbalife: Herbalife says group retracts lead claims

Heralife What’s the Deal? (read the comments! note: this is an OLD post but still had some interesting dialog)

MLM Bingo is a sure fire MLM detector! Even better, it’s free. Download it, copy it, distribute it because it’s released under the Creative Commons for anyone and everyone to enjoy. Please tell everyone about it, and have fun!

How to play MLM Bingo - a fun game for all ages:

1. Print out and bring the MLM Bingo card to any meeting that you suspect may be intended to motivate you to join an MLM company, or excel at being an MLM distributor.
2. Each time you hear one of the phrases on the board, or see one of the actions described, cover that square with your last penny, an M&M, a small pebble, or other marker.
3. When you get 5 in a row, you win! At that point, you can be sure you are in an MLM meeting. It’s advised that you leave quickly.

Click to get the higher resolution image or download the PDF directly.

MLM Bingo by Believethemovie.com is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
Based on a work at www.believethemovie.com.
Permissions beyond the scope of this license may be available at http://www.believethemovie.com/blog/mlm-bingo.

What is Usana
Usana is an MLM company based in Salt Lake City, Utah (Utah is the mother ship for MLM companies!) that sells health care products. The company’s founder, Myron Wentz, PH.D., began the company in an effort to improve cell health. Although Usana produces dozens of items, they can all be separated into three different categories: skin care, vitamins, and nutritional supplements.

Usana employs a much smaller number of people than other MLM companies like XanGo, but it is still a multi-million dollar company. Unfortunately, Usana stock prices have been falling over the past several years. Several lawsuits and controversy over-inflated executive resumes have probably contributed to this decline.

Quality of Product
As far as product quality is concerned, there are several opinions on the matter. According to Usana, product quality is a paramount concern. During manufacturing, several tests are conducted to ensure uniform product potency, weight, hardness and purity. The company also follows Good manufacturing Practices for pharmaceuticals rather than food. With these guidelines and tests, Usana products have earned a reputation for safety, but effectiveness is another matter.

Some sources claim that more affordable dietary supplements can be just as beneficial as Usana products. There hasn’t been a lot of research conducted to prove these theories though. To establish their own credibility, Usana points to several Olympic athletes who use their products. On the other hand, those athletes are Olympians and they tend to be sponsored by Usana as well.

Compensation for MLM Associates
Usana works on a binary compensation plan. According to Usana, the average associate made about $600 in 2006 and the average commission qualified associate made about $1500. The company clearly states that these numbers are no guarantee of how much an associate will make though. As nice as it would be to have some extra money, these numbers don’t look like a dependable income for a family.

Additionally, many people spend more money on the products than they earn by selling them. According to several recruiting presentations, each new Usana distributor must buy a minimum of about $445 worth of the company’s business tools and health products to get started and then they must continue to buy about $290 worth of its health products every month thereafter in order to qualify for commissions. For avid Usana users, this might be a great deal because they are committed to the product. For someone on board for the money, it can make return on investment a difficult task though.

Conclusion
At the moment, Usana is under a lot of scrutiny. For most people, Usana probably isn’t the number one way to get rich either. On the other hand, their products are safer than many dietary supplements on the market and it might be worth becoming an associate if you like their products enough.

Usana News
Here are some recent news stories about Usana’s bumpy road:

Usana Borrowing $215 Million to Go Private

Usana Wins Best of State Award - Again

Usana CEO Tries to Buy Out His Own Company

If you want to keep up on Usana news, read the Usana blog.

Bob Schmidt was a top-level XanGo distributor who was scheduled to speak at their next convention. He was in network marketing for 33 years and was 63 years old. Already beating cancer, he died while kyaking at Lake Tahoe over Memorial Day weekend.

Here is a tribute to him from XanGo that they showed at convention in Florida:

I’m going to review some of the biggest MLMs in the next few posts, starting with XanGo, a fancy fruit drink MLM spinoff from MLM company Tahitian Noni…

An Overview of XanGo, LLC

What is XanGo?
XanGo LLC is a multi-level marketing company based in Lehi, Utah that specializes in making dietary supplement products out of mangosteen fruit. They have hundreds of employees working on-site and hundreds of thousands distributors across the globe.

XanGo products are sold in Australia, Canada, Germany, Hong Kong, Japan, Malaysia, Mexico, Philippines, Singapore, Sweden, and the United Kingdom.

Quality of Product
As far as product quality is concerned, XanGo products do come in cool packaging and meet ISO standards of safety, but they shouldn’t be categorized as miracle workers. XanGo itself expressly states that their product “is not intended to diagnose, treat, cure or prevent any disease” (which is required by law).

This might lead consumers to ask why the product is so special and so expensive. The answer would probably be the monopoly the company has on mangosteen. The two strongest selling points for the drink are its taste and its antioxidant content. Of those two features, the taste is the only unique quality though. After all, most fruits and vegetables are good sources of nutrients and antioxidants. Unfortunately, the taste is a hard to duplicate though.

Mangosteen really is a delicious fruit. It is a regular favorite of tourists and newcomers in Southeast Asia and, having been to Thailand myself, I have rarely met anyone who didn’t like mangosteen. Its flavor has occasionally been described as a sweet and creamy citrusy blend with a hint of peach.

In addition to having a flavor that is difficult to recreate, mangosteens have also been hard to come by because they are native to Southeast Asia and they only grown in very warm climates. That makes is hard to grown them in the U.S.

Importing hasn’t been a viable solution in the past either. In fact, it was illegal to import mangosteen into the U.S. until 2006. Even then, only small amounts were allowed across the border and then sold to specialty restaurants. In 2007, mangosteens began appearing in a few New York grocery stores for $45 a pound, but that price is much higher than it would be in a country like Thailand or Taiwan. Chalk it up to shipping costs, I guess. Such a high price makes XanGo juice look affordable.

Unfortunately, it might be hard to taste mangosteen in XanGo juice too. After all, XanGo juice is actually a blend of mangosteen, apple, pear, grape, blueberry, raspberry, strawberry, cranberry and cherry juice. With eight other fruits thrown into the mix, it must be pretty hard to taste the mangosteen. This last conclusion is really an assumption though because I haven’t been willing to become part of the MLM or fork over $37 to buy the product.

XanGo Success Rate
As far as distributor success is concerned, I am sure that some people have made a fortune working for XanGo. I am also sure, that most XanGo distributors (about 70%) merely use their status to buy XanGo juice at a discounted price. This makes them fit better in a loyal customer category rather than the burgeoning entrepreneur category. I guess the most important thing to remember is that XanGo is a legitimate MLM company with a reliable compensation plan; even if it does seem complicated.

Conclusion
Whether XanGo products are really amazing or not, the company is certainly doing well. There are plenty of people who are willing to swear by its beneficial effect on their lives. Personally, I would rather save up and go to Southeast Asia for fresh mangosteens rather than buy the products, but that is only my personal preference.

What is your experience with XanGo?

Just for fun I wanted to see what MLMs are best represented on the Internet. To give you an idea I listed the top 10 MLM companies based on about how many people search for their name. Avon has been along longer than most MLMs and several years ago they focused on improving their internet presence.

10 MLM companies online (number of searches)

1. avon 410,942
2. pampered chef 209,940
3. mary kay 200,016
4. monavie 130,821
5. quixtar 98,766
6. herbalife 79,995
7. primerica 74,853
8. melaleuca 62,965
9. xango 55,189
10. amway 42,233

Later on the list there were MLM companies like (ones listed first have more searches): shaklee, usana, noni, arbonne international, tahitian noni, nuskin, stampin’ up, nature’s sunshine, forever living products, nu skin, pre-paid legal, neways, nouveau riche, tahitian noni international, goyin

These numbers are approximate, but it gives you a rough idea. What I find interesting is that TNI has three variations of their business ranking: noni, Tahitian noni, and Tahitian Noni International.