Evaluate a direct selling company before you sign anything
Ten guides on telling a solid opportunity from a costly one: what to ask, what to read, and which answers should make you walk away.
How do you evaluate a direct selling company?
Evaluate a direct selling company by checking four things: legal registration in your country, whether its products sell to non-members at full price, what its income disclosure shows typical participants earn, and whether it offers a written buy-back policy. Income that depends on recruiting is the main warning sign.
Ten guides in this section
Published guides link through. The rest are being written and reviewed now, in this order.
How to choose a direct selling company: 9 checks
The cornerstone method, step by step.
Read the guide →GUIDE02Direct selling vs pyramid scheme
The legal line, with a side-by-side table.
Read the guide →GUIDE03MLM red flags checklist
Warning signs to spot in the first meeting.
Read the guide →GUIDE04How to read an income disclosure statement
Median vs average, and the footnotes that matter.
Read the guide →GUIDE05Questions to ask before joining
What to ask the company, and your upline.
Read the guide →GUIDE06Is a direct selling company legal in India?
A five-minute check against the 2021 rules.
Read the guide →GUIDE07Buy-back policies explained
What a fair refund policy looks like.
Read the guide →GUIDE08How to compare two companies
A side-by-side framework you can reuse.
Read the guide →GUIDE09Starter kit costs: what's reasonable?
Kits, minimums and hidden monthly costs.
Read the guide →GUIDE10Signs of a healthy product line
Consumables, re-orders and real demand.
Read the guide →The four documents to ask for
If a company or team can't produce these four documents, you have your answer.
What is the biggest red flag in direct selling?
Income that depends mainly on recruiting people rather than on selling products to real customers. That is the defining feature of a pyramid scheme and the first thing regulators look for.
Should I trust a company's income claims?
Only if they match the company's published income disclosure statement. Look at median earnings and the share of participants who earned nothing, not the success stories shown at events.
How long should I take to decide?
At least a week. A legitimate company will still be there next week. Pressure to join or buy stock "this month" is itself a warning sign.