Questions to Ask an MLM Company Before You Bring Your Team

Before you bring a team into a network marketing company, ask it questions in six areas: who owns it and how long it has operated, who buys the product besides the distributors themselves, how payouts are calculated on a concrete example, what the contract says about exit and transfer, what support your organization will get, and whether the answers match public sources. Get the answers in writing: you are responsible not only for yourself but for the people who will follow you.

Below, step by step: what to ask, how to read the answer, and what to do if it is evasive. The list is built for a leader with a team, but it works just as well for someone who is only looking at an offer.

Step 1. Find out who is behind the company and how long it has operated

Start with the people and the legal entity. Ask: what is the entity's name, which country is it registered in, who are the owners and managers, and what did they do before. Ask separately whether they had other projects and what happened to them. An honest company answers calmly, without taking offense and without saying "that doesn't matter."

Then the history. When did sales begin, how did the compensation plan and the product change, were there name or entity changes. A change is not a vice in itself, but it needs a clear explanation. If the company is new, its age is not a verdict, but you will have to ask more questions about its staying power; see the breakdown of a new network marketing company.

Finally, money and production. What funds does the company pay bonuses from, is there revenue from sales outside the organization, who manufactures the goods and where are they certified. The full procedure for checking public data is in the article how to check a network marketing company before joining.

Step 2. Ask about the product: who buys it besides the distributors

The key question here is the one the US Federal Trade Commission puts in its guidance on multi-level marketing: what does the company pay for, real sales to customers or the recruitment of new participants. Participants buying to meet a qualification rather than for their own use is a sign of a pyramid. A real product does not save a company: it can sell goods and still build income on recruitment.

Ask specific questions. Does the company have retail sales outside the organization, and how are they separated from distributor purchases. Is there a mandatory monthly purchase, and in what amount. What happens to a distributor's qualification if they do not buy product. How are returns handled. If the company does not disclose the exact share of retail, ask how it estimates that share in mature organizations. A refusal to answer is also an answer.

Judge the product with your own eyes: compare the price with ordinary stores and imagine whether someone who has no plans to join the business would buy it. If the honest answer is "people buy it in order to take part," that is a strong signal. The signs are covered in the articles on the signs of a pyramid and on the line between network marketing and a pyramid.

On the law, only general principles. In Russia, organizing a pyramid falls under Article 172.2 of the Russian Criminal Code, and attracting money into pyramids and advertising them falls under Article 14.62 of the Russian Code of Administrative Offenses. In Kazakhstan these are Articles 217 and 217-1 of the Criminal Code of Kazakhstan. This is as of November 2026; check with a lawyer before you decide. For a leader this is not abstract: a person who invites others is in effect advertising the company.

Step 3. Work through the payouts on a hypothetical example with a company representative

Do not just ask them to "explain the compensation plan." Ask them to calculate a payout for your organization: give them a headcount, the number of levels, and an approximate volume. For how plans work in general, see the article on the compensation plan without illusions, and for how points get lost, see the piece on personal and group volume.

A hypothetical example. You have 50 people, and the group's monthly volume is $10,000. The representative says: "10% of volume." Ask which volume: total, or only what counts toward points. Say $2,000 came from promotional items that do not earn points. Then the percentage is taken from $8,000, and the payout is $800, not $1,000. A $200 monthly difference came from a single clause that the presentation never mentioned.

A second question on the same example: how much of the $10,000 is purchases by the distributors themselves. If participants bought $6,000 to qualify and customers outside the organization brought in $4,000, then most of the payouts rest on purchases inside the team. That is a reason to go back to Step 2.

Add questions about timing and terms: when and in what currency payouts are made, what deductions and taxes apply, what happens to commissions when goods are returned, whether the company can change the plan unilaterally and how it gives notice in advance. If you are comparing several projects, it is easier when the terms arrive in one format: transfer bonus, percentage or fixed fee, and what the project expects from the leader. On LeaderPitch, projects send offers exactly this way.

Step 4. Request the contract and find the exit and transfer terms in it

Ask for the full set before any decisions: the contract, the compensation plan as an appendix, the company rules, the return policy. If the documents are "issued after registration" or after the first purchase, treat that as the answer to your question about transparency. Which clauses to read first is laid out in the article on the contract with a network marketing company.

For a leader, the exit clauses matter most. How can a distributor leave, and what then happens to their organization and commissions. Is there a ban on working with other companies during the relationship and after it, and for how long. Is there a ban on inviting partners. Who owns the contact base and the organization data. If you are currently in another company, check its contract too: a transfer is done openly, taking into account the terms and the interests of the team. The steps are in the article on switching companies with your team without conflict.

Separately, find the clauses on sanctions and changes: what the company can block an account or zero out points for, who decides, whether it can be appealed, and how much notice is given of changes to the terms. Before you sign, show the contract to a lawyer in your country: general principles do not replace a review of the actual text.

Step 5. Clarify what support the leader and their organization will get

Ask exactly what you will receive. Is there a personal manager, training, materials in your team's language, a distributor support service, and how quickly does it respond. If you have people in several countries, clarify for each one: is the product legally sold there, are there certificates, a warehouse and delivery. Without these, an organization in another country is held together by promises.

Ask for trial access to the back office or a screen demo. Can you see the organization by levels, the volume and points for each distributor, the history of commissions and deductions, and can you export a report. If the back office does not show how a payout was calculated, you can only verify it on trust.

Ask also what the company expects from the leader: planned volume, mandatory events, reporting format, and in return, response times and help with launching a new country. If you are not yet ready to reveal your organization, on LeaderPitch you can make your profile anonymous: your name and contacts are shown only after you agree.

Step 6. Cross-check the answers against public sources and record the discrepancies

Now verify what you were told. Check the legal entity and its details in your country's public registers, the product documents, and the trademark. In Russia you can look at the Bank of Russia list of companies flagged for signs of illegal activity in the financial market. In Kazakhstan, check the warnings from the ARDFM and law enforcement.

Talk not only to current distributors but also to those who left: they will tell you about returns, delays and conflicts. Read reviews critically; how to do it is in the article on network marketing reviews. You can check the project name and representatives' contacts in the LeaderPitch blacklist: the search runs by name, nickname, phone and project, and a moderator verifies every entry. The absence of an entry does not prove everything is clean; it is just one more filter.

The main thing at this step is not to keep the discrepancies in your head. The procedure is this:

1. Write down the answers verbatim. Who said what, when and in which channel, ideally together with screenshots of the correspondence.
2. Check against the documents. Find each verbal answer in the contract, rules or compensation plan.
3. Mark the discrepancies. Split them into minor inaccuracies and those that change money or risk.
4. Ask follow-up questions in writing. For each significant discrepancy, send a short question and ask for a reply by email.
5. Show the result to a lawyer and your closest partners. Make the decision to switch when you have documents in hand, not a retelling.