Is MLM Legit Or Scam, Check These Characteristics
February 15, 2017
Is MLM Legit Or Scam, Check These Characteristics
Today, there are many ways to earn money. One of the ways is joining a multi-level marketing company. Multi-level marketing is also known as network marketing. It is a retailing system in which the products are sold by distributors (independent salespeople). The earnings in this system are based on ability and effort to sell products that are supplied by the company to the distributor. The company will also persuade the distributors to build their sales by recruiting, supplying, training, and motivating others to sell the products. The distributors will also earn a percentage of the others’ sales.
Is MLM legit or scam? Some MLM companies are legitimate. Since not all MLM companies are legitimate, you should beware of MLM scams. MLM scam is any opportunity that recruits people and promises them a high return on their investments. In this system, commonly the people who are recruited first will be paid higher than the people who join late. The people who join first will earn money gotten from the investment of the people who join late. The system in MLM scam is made deliberately to take advantage of the people who join late. The people who join late will never earn more than those ones who join first. The high payment will go to those who are at the top of the scheme since the people at the bottom came late so they.are not considered as the big investors..
Is MLM legit or scam? Some pyramid schemes are considered as MLM scam. Pyramid schemes mainly focus on making fast profits that are earned by recruiting others. When you find a plan that concentrates more on recruiting participants than selling products, it can be a pyramid scheme. Pyramid scheme makes little or even no mention about the market for the products. The participants will try to earn their investment by recruiting potential investors. Pyramid schemes should be given red flag if they promise to create thousands of dollars with only little effort. Some pyramid schemes will tell a long story about many people who have made a fortune with them without giving concrete facts. Don’t easily believe an achievement story without real facts. They may only attract you to join their plan. Pyramid schemes generally require substantial start-up cost. There are also some large hidden fees to be a distributor. The revenue is earned from selling opportunity.
You should beware when finding an MLM opportunity that promises high earnings with little effort and serious commitment. You need to learn the characteristics of scams to differentiate between the real network marketing and MLM scams to develop a long-lasting network marketing business. Scams could not survive longer if the people at the bottom could not recruit others. If you do not differentiate them, you could be in trouble because the chances of recruitment are high. They will offer attractive income so you could be attracted.
Is MLM legit or scam? You can check the compensation plan. The compensation plan in MLM scams looks like to be very simple. In most cases, MLM scams have very simple compensation plan since there is no work done except using others to earn money. The main work done is to take people on board and earn money from their investment. You just need to recruit others to get income. In some cases, there are no products that can be sold. The source of the income is only from the recruitment.
Real network marketing strategy compensates sales that they generate and the sales of another distributor that they recruit. Tupperware, Avon, Amway, Mary Kay Cosmetics and GNLD international are the examples of network marketing companies. Not like network marketing where the leadership is taken into considerations, MLM scam does not support to the new recruits. Everyone want to get new people recruited to earn money from the people who join. This is common characteristic almost for all MLM scams.
The other characteristic of MLM scams is a short term earning. MLM scams are different from real businesses. With real businesses, you must struggle for several years to make a stable income by generating opportunity. This is very different from MLM scam where there is quick earning. You should be careful with something that promises you quick income at a short time with little effort. Nothing can be easy in business without a struggle.
Is MLM legit or scam? Before investing an opportunity, you need to get and verify the company information, including address, name, website, principal, and phone number. You should discover the start-up costs and the probable return on the investment. Reviewing the marketing material and sales plan are also important. You should discover the strengths and weaknesses so you can decide that the plan is appropriate for you. You can verify the earning of the distributors that are employed by the company to give additional information. Consider clarifying the contract cancellation and product policies.