You can look at MLM companies from several perspectives to get an idea if they are running a legal business or a pyramid scheme. In this post, we cover how legal MLM companies approach training their distributors. Legal direct selling companies will encourage distributors to run their business with ethical standards and realistic expectations.
A good MLM company, seeking longevity in the marketplace, will put a lot of effort into training their distributors on how to manage and build their business. Businesses will provide online training, event training, and incentives.
Not every MLM company has the same opportunity, or compensation plan. There are many types of compensation plans and many variations on the original compensation plans (stairstep, unilevel, breakaway, matrix, binary). Each compensation plan and MLM company is unique in how it approaches consultant training.
Regardless of what compensation plan you’re using, there are common distributor training techniques among all companies and compensation plans. From a legal perspective, MLM companies must be realistic about their distributors’ statistics for success. It is not easy to become a MLM multimillionaire. Only a small percentage of distributors achieve such high success. Therefore, when legitimate direct selling companies present their training, management and support programs to encourage and train distributors they use some (or all) of the techniques in the list below.
If distributor training in your company sounds a little like this list, then it is likely looking good from a legal perspective. A MLM company opportunity should prioritize some or most of the following:
- Enhance distributors’ self-image.
- Enhance the image of the network marketing industry as a whole.
- Educate distributors about the direct selling, MLM industry.
- Create a realistic picture of what it takes to succeed in operating a network marketing business.
- Help distributors understand the responsibility of being in business for themselves.
- Make product education paramount in training programs.
- Develop business management skills.
- Help consultants understand the dynamics of people-interaction or person-to-person relationships.
- Teach (or encourage the learning of) new business technology application to the business, such as computer software programs and website platforms.
- Help distributors understand the basic concepts behind the network marketing method of distribution.
- Create an appreciation of ethical standards.
- Teach distributors how to run a small business, such as managing taxes, distributor networks and accounting.
- Work on goal-setting and planning; develop one, two, and three plans, rather than promote unrealistic instant success schemes.
- Develop the art of prospecting (finding and recruiting new distributors for your downline).
- Help distributors understand the concept of commitment.
- Learn to value the contribution of others in their home business.
- Prepare to give effective presentations.
- Learn how to deal with objections, rejections, and discouragement; helping distributors understand that an objection is nothing more than a question in disguise.
- Develop an understanding of the legal issues impacting the network marketing industry and the individual distributor business owner.
- Help distributors understand the art of duplication and the power of setting an example (in recruiting).
- Help consultants understand that people are involved in network marketing for different reasons; allow those who are interested in the business opportunity to develop at their own pace and resist the urge to pressure satisfied consumers to engage in the business opportunity if they simply want to remain customers.
When MLM companies work to encourage their distributors to work hard, learn about the business, and have realistic expectations, then they are working to support a network of distributors that will last a long time.
If a direct selling company tells you that you’ll become a millionaire in a month then the chances are likely that they are not operating a legitimate business. Remember, if it’s too good to be true, then get out quick!
Would you like to learn more about distributor training, legal MLM compensation plans, or the MLM industry in general? Watch some of MLMLegal.com’s videos, presented by MLM Attorney, Jeff Babener. Visit MLMLegal.com for the most trusted MLM legal information on the web.
