Do You Know the Difference Between an MLM Scheme and a Legitimate Business Venture?

When considering the different ways you can supplement your income, make money online, or just be in charge of your own finances, do you look into multi-level marketing companies? If you do, then there are some things you need to contemplate when looking into which company you desire to get into. There are many legitimate multi-level marketing companies (that you can make some serious money in), but most of them out there, are nothing but a multi-level marketing scam or in other words, a pyramid scheme. Here is some advice on what to look for to know the difference.

Take a close look at the mission of the business. In a legitimate multi-level marketing company the main focus of the business should be about sales of the product or services, depending on the company. In an multi-level marketing scam the main focus will most likely be recruiting new members and the company will push on you the importance of finding distributors over actual customers. Whatever company you decide to invest in, make sure to check for product sales or service profits over recruitment profits.

How is the amount of earnings decided? Just like above, the most profit should come from sales of the product or the service. In a legitimate business most of your income will come from this, however there should also be bonuses in signing up other distributors as well as a percentage of income coming from the down-line product sales. In a pyramid scheme the biggest percentage of the earnings will come from the fees paid by the new recruits or bonuses paid for getting new recruits into the program.

What kinds of products or services are being offered? If the product is something someone (including yourself) would buy without the desire to make money off the product or service then it can be considered legitimate. Make sure the product or service can stand by itself. If it cannot stand by itself conclude that it is an multi-level marketing scam. In a multi-level marketing scam the product or service is usually useless and the only people using the product or service are distributors trying to sell it. Beware of products that claim to work overnight or “miracle” products.

How much does it cost to start the business? The cost should be low or even nothing, however most legitimate businesses will at least charge a small amount to allow for you to obtain marketing materials or even your own website and tools to grow your business. Mark it as a pyramid scheme if the membership fees are an arm and a leg and the company continues to ask for more money, once you are involved, for marketing materials or tools. This is a red flag.

Can you easily contact the support team or your up-line? If the support team is easily contacted when you have a credit card in hand, but they suddenly disappear and are nowhere to be found when you have a question or concern about the company, your multi-level marketing scam alert system should go off. Legitimate multi-level marketing companies will be ready and willing to answer all questions about anything from the earnings to the specifics of the product or service.

Can you personally talk to people who used the product or service? If the company is excited about providing you with stories of people who had successful results with the product or service and even will give you references as to where these people came from, it most likely is a legitimate multi-level marketing company. Multi-level marketing scam alert if they only provide references of other distributors or will not provide any at all.

Is income guaranteed? A legitimate multi-level marketing company will never guarantee an income and will let it be known that without putting an honest effort into your business, you will not succeed. An multi-level marketing scam will make promises like “everyone and anyone can do this” or “you will become rich quickly.” Look out for these types or comments.

Is the business a lasting one? If the business has lasted a long time and you can see the potential of it growing, trust your instincts and join. However, if it has many people who get in and get out quickly it is destined to fail in the fast coming future, run! Check with the Better Business Bureau (BBB) to see how long it has been in business and what the goals of the company are.

If you are deciding to join an multi-level marketing company and do not know which one to join, make sure to go down this list to make sure it is not an multi-level marketing scam. In a legitimate multi-level marketing company profit is based on efforts and time spent on building your company and product/service sales (a GOOD amount of money can be made with real effort). In an multi-level marketing scam you will most likely lose your money you invested (which was probably a BIG amount).