Part of the guide: Network Marketing Lead Generation
I’ve been in this industry part-time since 2002. Over twenty years of watching opportunities launch, peak, and quietly disappear has taught me one thing: almost every failed company, and almost every failed distributor, failed for the same reason.
Nobody outside the company actually wanted the product.
Not “nobody said they wanted it.” Distributors say they love the product all day long. I mean nobody who wasn’t earning money from the opportunity was willing to pull out a credit card and buy it at full price. When that’s true, you don’t have a business. You have a money transfer from new recruits to old ones, dressed up in product packaging.
So before I look at a compensation plan, a founder’s story, or a “ground floor timing” pitch, I run one test. I call it the end user customer test, and you can run it yourself in an afternoon. Here’s the whole thing, step by step.
In this guide
- Why this test matters more than anything else
- Step 1: Pretend you’re not allowed to join
- Step 2: Find the real retail price and shop the competition
- Step 3: Ask the question nobody wants to answer
- Step 4: Check where the volume actually comes from
- Step 5: Run the quit test
- Step 6: Score it honestly
- What I do with opportunities that fail the test
Why this test matters more than anything else
This isn’t just my opinion. It’s the actual line regulators draw.
The FTC’s business guidance on multi-level marketing is blunt about it: the difference between a legitimate MLM and a pyramid scheme comes down to whether compensation is based on sales to real end users, or on recruiting and purchases made by the recruits themselves. The FTC’s consumer guidance says the same thing from the other side of the counter: if the money mostly comes from recruiting rather than retail sales, walk away.
Notice what’s not on that list. Not the science behind the product. Not how nice the founders are. Not how big the market is “projected” to be. End user demand is the load-bearing wall. Everything else is paint.
Step 1: Pretend you’re not allowed to join
This is the mental reset that makes the whole test work.
Imagine the opportunity doesn’t exist. There’s no comp plan, no team, no rank advancement. There’s just a product on a shelf with a price tag. You are a regular customer, and the only question available to you is: would I buy this?
Most people evaluating an opportunity never do this, because the income story is doing all the emotional work. Strip it out. If the product only looks attractive when it comes bundled with a paycheck, you’ve already learned something important.
Step 2: Find the real retail price and shop the competition
Take the product’s actual customer-facing price — not the discounted distributor price, the price a stranger pays.
Now spend twenty minutes shopping. Search for comparable products on Amazon, in Walmart, at your local grocery store. Write down what a non-MLM equivalent costs.
If the opportunity’s product costs two to four times more than a comparable retail product, ask yourself what justifies the gap. Sometimes there’s a real answer. Usually the honest answer is that the extra margin exists to fund the compensation plan — which means customers are being asked to overpay so distributors can get paid. That arrangement survives only as long as the buyers are emotionally invested in the opportunity. Which brings us to the next step.
Step 3: Ask the question nobody wants to answer
Find the person recruiting you and ask this, word for word:
“How many customers do you personally have who are not distributors and have never been distributors?”
Then be quiet and listen.
You will learn more in the next thirty seconds than in any three-hour opportunity webinar. Common deflections include “well, everyone starts as a customer,” “our distributors ARE our customers,” and “I focus on building leaders.” Every one of those answers means the same thing: few or none.
You have been paid late before
You have watched the number on the dashboard not match the number in your account. What is different now is simple: it settles on a public contract you can check yourself, not a dashboard I control.
Read the contract →Most participants earn little to nothing. No income is guaranteed. You can verify every payout on the public smart contract.
A healthy answer sounds like: “I have about fifteen retail customers, most have been reordering for over a year, and here’s roughly what that’s worth per month.” Specific, unglamorous, verifiable in tone. If you’ve read my post on MLM red flags, you’ll recognize the deflection patterns immediately — they’re the same ones that show up everywhere else in a shaky opportunity.
Step 4: Check where the volume actually comes from
Ask whether the company publishes what percentage of its sales go to non-distributor customers. A few companies do. Most don’t, and the silence is informative.
Then look at the mechanics on the ground:
- Is there an autoship requirement (or strong pressure) to stay “active” or qualify for commissions? If distributors must buy monthly to get paid, a huge share of “sales” are really pay-to-play purchases, not demand.
- Do customers reorder without being chased? Real products get reordered because people ran out and wanted more. Manufactured demand requires constant follow-up, reminders, and guilt.
- Do customers exist who found the product without a distributor relationship? Reviews from people who clearly aren’t building a business are a genuinely good sign.
I wrote about a moment that crystallized this for me in the complexity trap and the real customer — the difference between someone who buys because they want the thing and someone who buys because they’re in the system is the difference between a business and a treadmill.
Step 5: Run the quit test
Here’s the thought experiment that separates durable companies from doomed ones:
If all recruiting stopped tomorrow — nobody new ever joined — would revenue survive?
A real business says yes, because customers keep buying things they want. A recruiting-driven scheme says no, because the “customers” were mostly distributors, and distributors stop buying the moment the income dream dies. This is exactly the dynamic regulators test for, and it’s why recruitment-dependent companies collapse the way they do — the model requires endless new entrants, and endless new entrants don’t exist.
The playbook doesn’t die when a company does, either. It migrates. I’ve watched the same structure re-skin itself in crypto and prediction markets — new product, same failed quit test.
Step 6: Score it honestly
Tally what you found:
- Would you buy the product with no income attached? (Step 1)
- Is the price within shouting distance of retail alternatives? (Step 2)
- Does your recruiter have real, countable, non-distributor customers? (Step 3)
- Does volume come from organic reorders rather than qualification purchases? (Step 4)
- Does it pass the quit test? (Step 5)
Five yeses: rare, and worth a serious look. Three or four: proceed carefully and verify everything. Two or fewer: walk away, no matter how good the presentation was. The presentation is always good. That’s what presentations are for.
What I do with opportunities that fail the test
I pass. Every time. No exceptions for friends, no exceptions for “but the timing.”
Failing this test is a big part of why I stepped back from building network marketing seriously — too many opportunities were recruitment engines wearing a product costume, and I got tired of pretending otherwise. The test didn’t make me cynical. It made me selective, and selective is what over twenty years in this industry teaches you to be if you’re paying attention.
Run the test before you sign anything. It costs you an afternoon. Skipping it can cost you two years and your credibility with everyone who trusts you.
And if you want to see how I evaluate the tools and programs I actually use and recommend today — the ones that passed my own filters — start here.
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Step two, shopping the competition for a comparable retail price, is straightforward everywhere. Step three, asking the recruiter directly how many non-distributor customers they have, I think works differently depending on culture, in Turkey, asking a direct question like that to someone senior to you in a team can be read as confrontational in a way the article, writing for an American audience I think, does not anticipate. I would want a softer version of the same question that still gets an honest answer.
Even in twenty-two years of British corporate insurance, a direct performance question like step three was rare, we buried it in a review process instead of just asking.
Load-bearing gap across this thread: five of the six steps run in an afternoon. Step five, the quit test, needs weeks. Nobody’s flagged that the timelines don’t match.
Meera I think you just answered a question I didn’t know how to ask, because I’ve been trying to do this whole test in one sitting like the article seems to suggest and getting stuck exactly at step five, sorry if this is obvious to everyone else, but is it okay to just do steps one through four now and come back to five later, or does the test not really work if you split it up like that?
Elif raises something I saw constantly from the company side: the discomfort of asking is real and it is also exactly why the question works. A recruiter with real customers to name usually welcomes being asked, because it is easy for them to answer well. The deflection the article describes is a response to the question’s directness, not to your culture’s norms around directness. I would not soften it. I would just prepare to sit through an uncomfortable silence afterward, in any language.
The six steps are solid, but step six’s scoring, five yeses rare and worth a look, three or four proceed carefully, two or fewer walk, never states what share of opportunities actually land in each bucket. From what I’ve seen financing small businesses on the lending side, the median opportunity someone brings me lands at two or three yeses, not the extremes the scoring implies. Worth knowing you’re probably scoring in the murky middle, not at either clean end.
There’s a moment in here about the recruiter’s evasive answer being more informative than three hours of webinar, and I believe every word of it, because I spent nineteen years reading regulars’ faces before they ever said a word about whether the special on the board that night was any good. The pause before an answer always told me more than the answer itself eventually did, every single time, across two decades of watching faces over a counter. Step three, asking someone about their real, countable customers, is really just teaching people to notice that same pause on purpose instead of by instinct. Most of us already know how to hear it. We’ve just never been told before that it counts as diligence and not just a feeling.