Are you considering a multilevel marketing opportunity (MLM)? Proceed with caution. The company your looking at may well be a legitimate multilevel marketing businesses – or it may be a pyramid scheme. One could turn out to be a lucrative venture, while the other is an illegal scam designed to steal your money. The key to achieving success is to make sure you can distinguish between them.
How does an MLM work?
An MLM consultant or distributor (different companies use different terms) makes their money be selling products to other multilevel marketing participants. If they are not already a member of the company, the distributor signs them up. In addition to making money off their sales, the distributor makes money off of the other distributors they’ve brought on board. In many cases, there is a bonus for selling particular amounts of product or signing up a certain number of members. Another big attraction of an MLM is the sense of being part of a large extended family, a community.
What is a pyramid schemes?
Unfortunately, some multilevel marketing companies are actually frauds designed to take people’s money. These schemes are carefully disguised. Just like an MLM, pyramid schemes offer the opportunity to make money by signing others up and reaching certain levels of achievement. However, unlike an MLM, a pyramid scheme is different in the way it operates. Its sole purpose is to get people’s money – and then use them to recruit others. Other signs of a company being a pyramid scheme is a structure that allows for easy exploitation of recruits like unreliable buyback programs for unused inventory.
How to Protect Yourself
As with any business venture and opportunity, when you’re investigating a multilevel marketing company, make sure you gather all the information you can. From the MLM …
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