THE INCOME DISCLOSURE TEST

If a NWM recruiter touts income figures of top distributors, request that the company disclose average payout to distributors by percentiles (highest 1%, second highest 1%, and so on to the lowest 1%), so that you can determine your chances of success. Ask for net payout after product purchases for all distributors, even those not active. If they fail to furnish such data, they are not providing the balanced information you need to make an informed decision.

If less than 1% of all distributors earn the equivalent of a minimum wage for their time (after subtracting all expenses and NWM products purchased), you might want to consider a more profitable use of your money, time, and energy. (Some researchers estimate that less than 1% of NWM distributors ever turn a profit.)

üTHE PRICE TEST

Are the company's wholesale prices low enough to allow an respectable profit when marking up for resale -- at a retail price that is still competitive with comparable products through other sources? Or are prices so high that they must be sold at wholesale to achieve any volume?

If products are priced at a premium to support a large network of distributors, then the premium portion of the price could be considered the pyramid portion. So if a NWM product sells for $40 and a comparable product would sell for $20 at a typical retail outlet, the $20 premium may be deemed the pyramid portion of the price and would flow to top distributors in typical pyramid fashion.

üTHE GOLDEN RULE TEST

How did you feel about the way you were recruited to do the business, and how do you feel about approaching your family and friends in the same way? How important are your relationships to you? Are you offended when they attempt to exploit your connection with them for monetary gain? Would you want to do the exploiting?

THE TIME FREEDOM TEST

The perennial dream of those with a pyramidal mentality is to be successful at recruiting a downline that will bring in enough money to support them so they won't have to work themselves -- thus giving them "time freedom." They can then "leverage" their time by living off the efforts of others.

If a recruiter promises that by working hard for a brief time period you will never have to work again, ask what percent of their top distributors are no longer actively involved with the company -- and never attend opportunity meetings.

Ask veteran distributors when they last took an extended vacation. Were they able to do so without significant losses for not tending their downlines? And did any of them quit or scale down without experiencing major financial losses?

Better yet, ask for a copy of the recruiter's downline and upline. Contact distributors at several different levels to see if any have achieved "time freedom." And if you know the spouse of any of the distributors, you might ask what problems the family has experienced due to NWM participation (intrusive phone calls, untimely visits to the home, and neglect of family and other duties by the distributor).

THE HONESTY TEST

Has the recruiter been devious or up front in his or her inviting attempts? And can the products and "opportunity" be sold without making exaggerated product and income claims? Ask for validation of each of the claims made.

If you find the truth frequently distorted, powerful and escalating incentives may be driving the recruitment. If normally honest persons feel the need to exaggerate claims to sell the products and the program, you may find yourself having to do the same.

Also, NWM promoters who don't command respect themselves may lean heavily on the "credentials" or "character" of others involved in the "opportunity." If such references are used to excess, watch out. Such credibility links can be deceptive. Why? Because the ethics of NWM are so tricky to sort out that respectable and high level people have been drawn into the most problematical of programs.

THE SUPPORT TEST

Does the company offer an adequate support infrastructure to handle a temporary burst of volume?

Will your upline be there when you need them, or do they have a history of jumping ship when the next hot NWM deal comes along?

Are conferences and training programs, audio and video tapes, etc., free of charge (as is the case elsewhere for company sponsored programs), or are you expected to pay for them -- as another revenue source for the company and upline?

A FINAL WORD

If you have found this flyer helpful in deciding about participation in NWM, you could be doing your friends and family a favor by sharing this information with at least five of them. Then ask each of them to share it with five more persons, and suggest they tell each of them to share it with five more, and . . . .

© 2000 Jon M. Taylor. This flyer may be reproduced in its entirely for consumer awareness, but may not be sold or packaged for sale without the author's written permission. It has been designed for easy reproduction on 8½ x11-inch paper.

For more information on problems with network marketing and possible solutions, visit our web site www.whatisgood.com/nwm. Or write:

The Consumer Awareness Institute

P.O. Box 488

Kaysville, UT 84037

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