*** MLM Companies—5 Simple, Cut-to-the-Bottom-Line Questions to Ask Before Even Looking

There are some extraordinarily good MLM companies. They offer real value to every customer and real opportunity to every distributor.

There are also a lot of very average ones. And, unfortunately, there are far too many thinly disguised pyramid schemes that are simply trying to masquerade as legitimate multi-level marketing operations.

If you are like many people in these economic times, you probably would be open to real opportunity. But, you probably don't have much more than 60 seconds to spare on something that is not. So, when you are approached by a well-meaning friend, neighbor, or associate with a question like this one, "do you like to keep an open mind about new business opportunities," here are five questions to ask that will help you find out, within a minute, whether investing any other of your precious minutes is warranted.

1. What product or service is the company selling?

Legitimate MLM companies differ from pyramid schemes legally and practically in that they earn their money by selling real products or services that people really want. If the “distributors” aren't talking about that, they probably aren't worth a minute more of your time.

2. What is the USP of the product?

A USP is a unique selling proposition. If the company's product does not have a clear and easy to understand USP, it will never catch on in an MLM model. MLM is driven by excited part time people without great sales skills. If it's not unique and easy to talk about, the business won't last long—there is just too much competition.

3. Would you buy it? At that price?

Be honest with yourself. Even if there were no way to make money by being associated with the company, would you still buy the product or service at the price it is being offered? The truth is, most people do not make much or any money in network marketing for various—but not nefarious—reasons. (Most just never really get started doing the work involved.) But if they are not making money, they won't keep buying or recommending the product unless they really like it at the price it is being offered. If you wouldn't buy it at that price, probably others won't either. Game over.

4. Who owns and runs the company?

I am still amazed by how many times I get approached to look at some new MLM. I go to their website, and I can't easily find out who's behind the business. Or, I can't find out where they are located. What are they afraid of? Why don't they want anyone to know who and where they are? That's a red flag the size of Texas.

5. Did you like how you were approached?

Was the way you were approached respectful? Straightforward? Honest, rather than sneaky?

The stereotypical worst approach of all times happens this way. You are invited to a spaghetti dinner at a neighbor's house. "Great. I have been meaning to get to know the neighbors better," you think. But after dinner, the white board comes out and, with no opportunity to excuse yourself, you find yourself at an Amway business opportunity meeting—hardly a respectful tactic.

(It still happens! I was talking to a colleague with years of network marketing experience a few days ago. He related how he was invited to a "motivation" speaker's presentation within the last few days and—as it turns out—it was really an Amway sales pitch. Even those of us who have been around get blindsided sometimes.)

If a company and its representatives can't be straight forward and honest in the way they teach people to do their business, you may well conclude that more of your time should not be wasted.

All that said, make sure you don't, as they say, throw out the baby with the bath water and believe the erroneous arguments of the few, but very vocal anti-MLM critics who will try to convince you that all MLM companies are evil. That’s simply not true. Such statements are usually the product of fundamentalist, black or white thinking and a great deal of ignorance. Life is much more interesting and challenging than that.

In the case of network marketing, I know far too many people who have achieved a remarkably free lifestyle by discovering and building a good MLM business. It is has been the largest source of my income for over a decade as well.