Is Your Network Marketing Opportunity The Best MLM? Criteria #1: Start-up Cost

I was recently approached by a good friend who is a fellow network marketing professional and was looking to recruit me for the latest pre-launch MLM opportunity.  As one of his pitch tactics, he asked me whether or not I was already in the best MLM on the planet. Of course, I had to chuckle to myself, because Sales Rule #1 is never ask a question that you do not already know the answer to. And obviously, my friend did not know my answer to this question, or he would have pitched it differently.

You see, I resoundingly believe that I AM already a member of the best MLM company on the planet. I first got involved with network marketing way back in 1994, so I've been around the block a bit.  When researching my present MLM opportunity, I came to the table with some steadfast criteria, and I was determined that if any of these factors were lacking, I would not be joining.  Here’s my list:

1. What are the start-up costs?

People, do not be fooled by the answers to this question.  I asked my friend this question and he literally told me that the startup cost was zero!  Zero!  Can you believe it?  In case my sarcasm is wasted on you, let me just explain: I’m not buying the zero!  There are absolutely no MLM Companies around today where the startup cost is zero!  What my friend should have explained was that the membership fee is being temporarily waived for the pre-launch period, and that following the pre-launch, the regular registration fee will be blah-blah-blah dollars.

Start-up costs are EXTREMELY important in network marketing, just as in any business.  First, there is the initial registration fee.  This is what you pay to the MLM company just for signing up.  Some initial registration fees can be in excess of $1000; some fees are less than $100, some are free.  It all depends upon the company you join.  Then, there may be a membership renewal fee, which is due at the beginning of the fiscal year, or every twelve months on your anniversary.  Without paying this fee, the company may suspend or even cancel your membership.  Some companies have monthly maintenance fees (which you pay for simply continuing to be affiliated with your company), personal website fees (a monthly fee for having a company replicated website or product store), newsletter subscription fees, and online marketing fees and materials costs.

Additionally, many MLM companies require members to make periodic product purchases (aka “personal volume” or PV) in order to qualify for commission payouts.  This is important to consider when joining an MLM, as it will figure into your monthly bottom line and determine your profitability from month to month.  For example, let’s say that you join ABC MLM Company that distributes various household consumables (toilet paper, cleaning products, etc.)  Your membership fee is $40, and in order to qualify for commissions, you must generate a minimum of 300 personal volume points per month through product sales or purchases.  Now the average individual that joins an MLM company knows absolutely nothing about marketing, and the learning curve (if you are using the company’s marketing training and materials solely) can be rather steep.  This means that selling products and adding repsto your business to offset these costs may take a while, so the 300 points you need to generate must come from your own product purchases; thusly, these figures should be added to the initial start-up cost.  Pretty soon, that “free” start-up cost is nothing of the sort, and you’ve spent anywhere from $100 – $500 (maybe more) in your first month.  How’s that for a profitable “business opportunity?”

The bottom line is this: make sure you do your research before joining any MLM.  Network marketing is an absolutely fantastic business building opportunity that can provide a steady residual income if approached from the proper perspective.  Knowing and preparing for your up-front costs can save you tremendous time, effort, and money in the long run.  But as usual, don’t just take my word for it…take it for checking!