How to Tell Multi Level Marketing or MLM Scams
Are you looking to earn some extra income and are worried about multi level marketing or MLM scams? You do well to be
cautious as of course there are many scams and schemes out there when
it comes to businesses, and ways that you miss out on making real money
online and in person. On the other hand, if you assume that every money
making opportunity and all business that use multi level marketing are
just MLM scams, you're likely to lose out on some income potential.
Multi level marketing simply refers to a particular pay structure,
wherein a salesperson gets commission not just for their own sales but
for the sales of those whom they recruit for the business. This is
where the term "multi level" comes into play. So not all multi level
businesses are actually MLM scams, and some are very reputable
business. How can you tell the difference?
One thing to remember about MLM scams is that you want to be selling a product in order for your business to be legitimate. Pyramid schemes
and other common scams don't really sell a product but instead sell the
"rights" to be part of those schemes, and in turn each person sells
more "rights" to the scheme. This is where MLM scams come into play; a
person isn't really purchasing anything other than the right to sell
nothing to someone else. Sometimes these schemes will involve an actual
product but they typically make the most money from those reselling
rights or licensing rights and not from the product itself. There is a
difference between these MLM scams and actual multi level marketing
businesses.
In a true multi level marketing business, you sell a product and recruit new salespersons. These are not MLM scams but just more ways to
earn money. When you recruit someone to sell the product you get a
commission from their sales. The bottom line is that they're selling a
real product so the customers are not scammed out of anything; they pay
for a product that they get. With MLM scams you're not really
purchasing anything or have to pay for the privilege of selling that
same product. But with real MLM companies, you buy a real product and
can also make money from selling that product, but don't need to pay
anyone to do so.
Getting involved with MLM scams or any type of scam can be costly, but getting involved with real MLM companies can also be a great way to
make money. If you can recruit others to sell the product this means
that you make money from your sales and their sales as well. Being
afraid of MLM scams shouldn't keep you from making real money from real
companies by selling a real product! MLM companies can work online or
in person, and some are so successful that they make a full-time income
from this type of sales, so don't be too quick to dismiss the
possibilities!
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Permalink Reply by Debbie Russell on -
I always love it when people say, "Is this one of those PYRAMIDS?" They really don't even know what one is when you ask them. They are meaning Pyramid Schemes, but still cannot usually identify the problem so it can be an opportunity for all of us to educate and inform. A real estate broker hires real estate agents to work for them in order to grow his business. Every corporation has a structure that looks like a pyramid, but it is not illegal. I think the people that invest their money with people promising a Quick and Big return somehow "spill over" into the negative thinking on MLMs. In South Florida we have a rash of them in the newspapers everyday. What were THOSE people thinking that they could really get that rate of return?
There is so much information on the web out there that is daunting for someone trying to start a new Home Based Business and also determine if it is a Legit Home Based Business. People need to evaluate 2 inportant components - The Company and the Marketing System they expect you to follow. I finally was able to write down some important criteria myself to help in making the decision.
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Permalink Reply by Rudy Hiebert on -
This was a good expansion of the topic. It's unfortunate, however, that you refer to MLM in the same breath as "scam" and this is possibly why the misconception. On the one hand, too many facts are, or potentially and hypothetically hidden when a direct marketing venture is explained to a prospect and on the other, the prospect doesn't not ask enough questions to get the full picture and is therefore not as informed as he/she should be. Consequently, a few months down the road the results are not as were assumed and suddenly it's a scam.
When the results are below what was anticipated or claimed, past experience may influence the assumption that what is being offered is just like the others that have gone "south" for this person. It is likely that it was not a so-called scam and to blame for a negative experience. Many here can remember the chain letter of yesteryear, well that is how I relate to much of what comes into my in-box that claims some very attractive numbers. Thankfully I have not been a victim of these.
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