1. Avoid companies that ask you to pay a lot of money up front for marketing materials or products that you will not use. A feature of pyramid schemes is to ask you to pay simply to get a place in the matrix, without offering a genuine product or service. This is now illegal in most countries. Some companies try to get around the law by offering a low value product at a high cost. If it seems to you that nobody would pay the asking price for the product alone, then stay away.

2. Avoid plans that claim that you will make a lot of money through the expansion of your downline without you having to do any work. While it is true that you may earn something from several levels of your downline, a legitimate scheme does require you to do some work in sponsoring at least some of those people. You should also remember that the majority of people joining MLM programs drop out in less than 3 months without having sponsored anybody, so the idea of you recruiting 5 people who each recruit 5 people is simply not realistic. You will need good sponsoring skills and strong support from your company or upline to make any serious money from your downline.

3. Do your research on the company. How long has it been in business? If it is a start-up, who are the directors and have their other projects been successful?

4. Avoid 'miracle products' and remember that for every customer who says it cured their cancer, hair loss, etc, there may be 100 others who saw no benefit at all.

5. If the product seems genuine, does your local drugstore sell it or something like it? If so, is there a benefit for your customers in buying from you rather than their drugstore? And if the drugstore doesn't sell it, why not?

6. If the product is something you could use yourself, ask if you can try it before making your decision. If not, ask if you can talk to people who have used the product to build up your understanding of its benefits. Most of us can only successfully sell something that we genuinely believe in.

7. Be cautious when you are shown testimonials from people who claim to earn huge sums through the plan. Even if true, those people may be founder members or have years of experience behind them. Realize that it would probably take you several years of hard work to get to their level.

8. Avoid paying or signing contracts at the first meeting. Insist on time to do your research and talk the matter over with your spouse, accountant, lawyer or someone you trust.

9. Remember that after you have found a company with a good product and a solid multi level marketing plan, some investment of time and money will be required to build a business even with the top network marketing companies.