MLM Companies to Avoid Because They Just Plain Suck

mlm companies to avoid

You may have come to this blog post with the assumption I would give you a list of currently operating MLM companies to avoid.

While I do have some company names in mind, it would be quite unprofessional to name them because it could be perceived as an unfair attack.

The goal in today’s post is to not tell you such and such company sucks and it is a MLM company to avoid, but to give you all the tools to properly research and determine MLM companies that suck.

Before I move on, I am sure that if you discovered this post via your search engine, you also saw many sites telling you to avoid multilevel marketing all together. Many of these people will try to feed you with the “pyramid” argument.

Yes, MLM companies are set up on a pyramid system. But so is every other business and most organizations. After all, how else would that business run in a competent way?

There is a person at the top and flows down to various levels.

The only time a pyramid is bad is when the top-level or levels are the only ones receiving benefits.

So any business can run a bad or a good pyramid. Multilevel marketing is just simply a business format. In itself, MLM is not bad. The bad comes from the people leading and running the pyramid. So don’t look at the system, look at the leaders and you can determine if the pyramid is bad.

MLM Companies To Avoid – Learn From Companies Who Were Shut Down

One of the best places to start in determine if a current MLM company sucks and should be avoided is to examine past MLM companies that have been shut down.

If the current MLM company is following in a similar track as a company that was shut down, there is a good chance you should avoid that MLM company.

Let’s look at a few past MLM companies who were closed and why.

Fortune Hi-Tech Marketing

Known as FHTM, this MLM company was shut down in 2013 when the FTC froze all assets.

FHTM had representatives supposedly sell products from other companies (Dish Network, mobile plans and much more), but the company just pushed independent representatives to recruit more people. There was few products being sold but the company was making money on start-up fees and packages.

It was determined that 98% of the people lost more money than they made.

Equinox International

Founded by Bill Gouldd in 1991, Equinox International grew quickly using a hype technique.

People would answer ads promising monthly incomes of $2-3,000, but they would have to purchase $5,000 worth of products to be able to earn those income levels.

So essentially, the only products being sold were to distributors and Equinox International was shut down as an illegal pyramid scheme by the FTC.

Bill Gouldd had to promise not to be involved in MLM anymore, but some say he has found a way to “skirt” around that.

Others

Those were just 2 companies that you should study. If you are considering any MLM company but see they are using similar tactics, they are probably MLM companies to avoid.

Some other companies you may want to research are:

  • Global Information Network (GIN)
  • Trek Alliance (another Bill Gouldd investment)
  • Holiday Magic
  • PrimeBuy Network
  • Five Star Auto Club

MLM Companies To Avoid – Red Flags

Before joining any MLM company, it pays to research. There are certain red flags that can pop-up which can tell youmlm companies that suck to avoid that particular company.

I am going to go through various red flags you should be on the watch for.

Look over online reviews

Just because a MLM company has some negative reviews does not make it one of the MLM companies to avoid. You must use a measurement scale.

Check the Better Business Bureau and other review sites and see what people have to say. You can get great insight on a company by reading reviews.

Too good to be true

When advertisements from MLM companies make promises that seem too good to be true, they probably are.

Make sure and ask questions… Deep and difficult questions and if the MLM customer service representative cannot satisfactorily answer those questions, I suggest you run the opposite way and look for a good MLM company.

Check the prior records of key leaders in the company

It is quite common that if a MLM company sucks and is bad, the leaders have also run other companies in the past or even committed crimes that will show they do not have the best intentions.

Take a close look at the past records of the key leaders. You can get some great insight into the MLM company by doing so.

Does training cost money?

The basic training in managing your new home based MLM business should not cost you any money. As a matter of fact, the FTC takes a hard-line approach to this.

Yes, advanced training may have fees associated with them, but the basic training to manage your MLM business should be free.

How long has the MLM company been operating?

While every company has to start somewhere, you can rest assured that a MLM company that has been operating for over 5 years has better odds of not sucking.

Normally, a bad MLM company will show its true colors within 1 year of starting.

Does this mean you shouldn’t jump onto a ground-floor opportunity?

By all means, go for it if your intuition is telling you to. Remember, we are entrepreneurs and entrepreneurs take risks. If you have measured the other variables on a new MLM company and it looks good, don’t let the length of operation be the one choice that stops you.

Unreasonable product claims

There have been many MLM companies fined or shut down because they made claims that were unreasonable.

If the company claims their product can:

  • Cure cancer
  • Make you look like a famous model when you now look like an infamous gorilla
  • Etc…

You should move on to the next opportunity.

The Federal government takes a dim view on misleading product claims with no scientific proof to back those claims.

Look at the financials and top earners

The financial stability of the company can give you a good sign if the company sucks or not. If the company is on themlm company financials edge of bankruptcy, do you really think you will do well?

I also suggest you take a look at the top earners in the company. If possible, even “pick their brain.” It is a great way to see if the MLM company will be a good fit for you.

Do they lead with the product or the opportunity?

When the person approached you about this particular MLM opportunity, how much did he/she explain about the products or services?

This can be a good sign as a MLM company that doesn’t suck will be proud of their products and will train their agents to lead with the products.

In all actuality, it only makes good sense to try an MLM product before agreeing to distribute it.

If an MLM company barely even mentions the product, there is a good chance that MLM company sucks.

See these too:

  1. Cold Market Recruiting Strategies That Work Even if You Suck on The Phone
  2. 7 Warm Market Prospecting Tips to Grow Your Downline Fast
  3. Cold Market vs Warm Market: What Happens When You Run Out of Your Warm Market
  4. How to Overcome Fear of the Phone in Network Marketing

MLM Companies To Avoid – Some Suggestions And Advice

Again, I don’t want to name and companies because that would not be right, but there are some suggestions and advice I would like to offer you.

First and foremost, to really build a massive MLM business, you need to love and be passionate about the products. If you are not willing to share the products with friends and family, you should ask yourself if it would be a good fit for you.

More advice

  • MLM companies that don’t carry their own products but sell 3rd party products probably are MLM companies to avoid. Most generally, the same products can be attained by consumers at a much lower cost elsewhere.
  • MLM companies that sell mobile apps and mobile service plans can be risky. In the same scenario as above, those plans can usually be purchased at lower costs elsewhere.
  • MLM companies that offer only 1 product puts you in a difficult position. You will have no flexibility and if that one product doesn’t solve the consumer’s problem, you have no other fall backs.
  • There have been a few MLM companies jumping into the precious metals arena. Personally, I love investing in precious metals but doing so in a MLM business format just seems somewhat ignorant. The rates will need to be adjusted to pay commissions and the odds of that precious metal rising to levels above what you paid are low. Lets just say an ounce of gold is valued at $1,200 and through the MLM, you pay $1,400 for that ounce. How long would you have to hold it to make a profit?

The best advice I can give you is find an MLM company that has a good range of products and products that are consumed. If the product is consumable, you will have repeat customers.

MLM Companies To Avoid – Key Factors To Look For In A MLM Company

After explaining all of this to you, I want to summarize what I believe to be the 3 key factors you should examine before joining a MLM company:

1) The Company Leadership

You need to determine if the leadership of the company truly has your best interests in mind, or if they are just doing it to fill their own needs and desires.

You should be able to get a good idea just by looking at their past and how they answer your questions.

2) Product Or Service Uniqueness And Value

What about the company product or service is unique?

How does it compare to similar products or services on the marketplace?

What benefits does it have? How can you show higher value than retail items?

If the company’s product or service is essentially the same thing as an item a person can get at the local retail store but at an inflated cost, do you really believe you can justify selling it?

3) Availability

One key factor in MLM is being able to use your online as well as offline contacts to sell and recruit. But if the MLM product availability is low, it will cut down your opportunities.

It is wise to involve yourself with an MLM company who has, or is planning to expand operations in various countries.

Last but not least, you should always study the MLM company’s compensation plan.

Every compensation plan has pros and cons, but just examine the system and see if you will feel comfortable. Most MLM companies have a compensation explanation PDF you can download on their website.

If they are not clear how you are compensated, I suggest you move on to the next opportunity.

MLM Companies To Avoid – Conclusion

I really hope this helps you make the proper decision on the MLM company you will join.

If you would like to know more about the MLM company I am with and the products, I would love to talk with you. Just contact me here.

Now do know that your MLM business will require work, It is not a lottery or slot machine.

Just take your time and do proper research. You WILL find the right MLM company to start your business with if you follow the advice I provided today.

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