What To Look For – Part 3

I’m really getting good at these original titles. That’s a joke.

In the first two articles, we covered the company track record and the financial strength of the company. In this article, we are going to talk about the management of the company. As you can see, these three factors are somewhat inter-related as a strong management team and a good track record will probably indicate financial strength, and financial strength and a good track record will most likely be a result of a strong management team.

Now, remember, we are looking to build a long-term, stable residual income; so what does a strong management team have to do with that, you ask?

Here are some reasons you might want to know if your company has a strong management team or not. Let’s say that you’ve joined a company and are happily recruiting new people into your organization and selling products to your friends and family, and generally things are looking good and you are beginning to see the results of your efforts. Then, in the mail, you get a letter like this (actual letter with the company name changed):

”After careful consideration, the Board of Directors of XYZ Co. has determined to pursue an alternative business model resulting in the discontinuation of our XYZ Co. Multilevel Marketing Program in its current form, and has asked me to inform all XYZ Co. Independent Distributors of this decision.  As a result, the current XYZ Co. Compensation Plan will be terminated effective …”

So much for that residual income. Would you be feeling very cheery about your company? And maybe even a little down on the network marketing industry? Thinking that working from home wasn’t all it was cut out to be?

Management also decides where the unearned commissions go (those commissions that someone didn’t qualify for)? Do they go back to the company or do they go into normal distribution to the rest of that rep’s upline to inspire them to help him qualify next month?

Is the management in it for the long haul? Or are they there to cash out as soon as possible? At which point the new owners can change the rules, reducing the payout or even cancelling distributors.

How will management react if and when bad times arrive? Will they stand by their distributors? Or will they drop them like a hot potato? Here’s a quote from a 2004 email detailing the end of Excel Communications as a network marketing company:

“What does this mean to independent representatives? Answer: VarTec will no longer maintain the Excel sales channel. Agreements between Excel Telecommunications and independent representatives will be terminated as part of the bankruptcy filings.

“What about the commissions that independent representatives are supposed to receive under Excel?

Answer: Under the Chapter 11 bankruptcy filing, the MLM sales and compensation structure contracts are all subject to a motion to reject, and independent representatives will no longer receive commissions from VarTec or Excel.”   – quoted from http://www.mlmwatchdog.com/rc_Excel_crash.html

Of course, to show there were no hard feelings, they gave all the customers back to the distributors who signed them up with the company; oh wait, no, they kept the customers. Ah, I’m feeling very warm and fuzzy now.

Integrity is a keynote of a management team. Are they going to do what they said they would, will they stand by the people who helped them grow their company – their distributors?

Where do they come from? Were their previous endeavors successful? Do they seem like people you want to trust your future with?

Here are some ideas for checking out your proposed partner’s management. (Thanks to MLM Watchdog for many of these suggestions.)

1)    Do a Google search on the top management personnel

2)    Do a Google search on the top management with the addition of the word scam or fraud

3)    Check the company website? Do they have an address? Use Google Earth or Google street view and see if the picture matches the picture on the website.

4)    Do a Google search on the company itself with scam or fraud added to the search string?

5)    If you can’t meet the management team yourself, talk to someone who has and get their impression of them.

6)    What distributor support services has management put in place?

I think I’ve rambled on long enough here, you’ve got the idea; check out your prospective management team to see if they meet your standards of integrity and loyalty. Will they help you achieve your goal of a long-term stable residual income? Only you can answer that for yourself, I hope I’ve given you some ideas to get you started.

I started with a joke, so I’m ending with some humor as well.

Apparently, mlm’ers are a rather humorless bunch. After doing a Google search for mlm humor, the only things I found were anti-mlm, disparaging and denigrating, so herewith an internet joke translated into mlm-ese:

Q: How many network marketers does it take to change a light bulb?

A: That depends on where they are in the comp plan; the leaders brighten up the room all by themselves and don’t have to change the light bulb.

Till next time, have a great week!

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