What is MLM?
Extra income for:
Work From Home
Gym or Club
Spa or Salon
Athletic Gear Store
Successful MLM Companies VS. Unethical Pyramid Schemes
Despite the many reputable firms, network marketing is often associated with the term "pyramid scheme" in the minds
of many consumers. It is vital to make the distinction, both to yourself, and your future customers.
Unethical practices by some companies and representatives create an unfair image of
Multi Level Marketing (MLM) and Network Marketing. Therefore, we must begin with the negative...
What is a pyramid scheme?
Why must you avoid pyramid schemes?
Pyramid schemes are bogus money-making scams in which new participants at the bottom of the pyramid pay money to
people at the top. They pay for the chance to move up and profit from payments of others who might join later.
The "investment" to join may range from a small fee
to thousands of dollars. Only after the few at the top have collected from everyone do members at the bottom
finally move up to have a chance at profiting themselves. Until then, new members are simply poorer
by the amount of their out-of pocket expense as the search for new participants continues and new levels are
The entire pyramid may collapse before you "advance" the top. In order for everyone in this illegal activity to
profit, there would have to be an unending supply of new members. This is not possible, so each new level becomes
more likely to lose money.
- They commit fraud - Participants in a pyramid scheme are, consciously or unconsciously, deceiving those
- Money will be lost - The scheme is based on simple mathematics: many losers pay a few winners.
- They are illegal - Besides losing your investment, the operation could be closed down by legal
authorities and the participants subject to fines or arrest
How to distinguish legitimate MLM from disguised pyramids?
Pyramid promoters try to make their schemes look like valid multilevel marketing to help you get rich. Multilevel
marketing is a lawful and legitimate business method using a network of independent distributors
to sell consumer products. You can get rich.
To appear as a multilevel marketing firm, a pyramid scheme includes a "product line", claiming
to be in the business of selling to consumers. But little effort is made to actually market
the products. Instead, money is generated in the classic pyramid fashion. Unsuspecting new distributors
are recruited and are pushed to purchase large amounts of costly inventory.
Unfortunately, it can be difficult distinguish whether the products have a legitimate consumer market or are
cheaply produced, inferior products or untested 'miracle cures' to medical problems or other difficulties.
What should be avoided?
- Those who denounce other products or firms.
- Those who confuse you or exploit your lack of knowledge.
- Those who try to convince you to cancel a contract made with someone else.
- Companies charging a large entry fee and promising huge profits.
- Companies pressuring you to purchase large quantities of products.
- Companies selling few or no products.
Advantages of Multi-level Marketing (MLM)
True income opportunities with MLM or Network Marketing
Network Marketing is a form of retailing whereby consumer goods are sold, not in stores by sales
staff, but by independent businessmen and women (distributors), who work from home. Distributors
set their own hours and earn money by selling products supplied by an established company. Examples include
Herbalife, Amway, Mary Kay, and Watkins.
The multilevel structure allows you to build your own salesforce by recruiting, motivating, and training others
to sell the same products. Your compensation includes a percentage of the volume of your
entire organization (in addition to earnings on your own sales). This formula makes
multilevel marketing an attractive opportunity to start your business with comparatively little money.
Personal selling of quality products or services
A genuine MLM program is basically the idea of person selling a product or service to another person.
This method offers certain advantages to the consumer. Unlike buying at a retail store, the customer
is buying from a person committed to customer service. The seller is not merely a clerk, but a
teacher, and provider of information. So MLM or network marketing is a fancy name for direct selling, but
with a more lucrative commission structure.
Advantages of MLM as a business model
- Lower set-up costs than franchises or other small businesses
- Low barriers to entry - college industry experience not required
- Work from home with flexible hours
- Even part-time can allow high earnings
- Residual income on your sales and downline
- MLM Company manufactures and ships all products
- Pre-existing business plan is your road map
- Be your own boss - take business in the direction you wish
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