Is it a Legitimate Opportunity or a Pyramid Scheme?
Many people have found success in direct selling for companies which use a multi-level compensation plan. Unfortunately, not all opportunities are legitimate, and it’s easy to get caught up in the enthusiasm and big promises of a pyramid scheme posing as a trustworthy company. So how do you tell the difference? BBB provides consumers with information to help determine whether or not a company is trustworthy.
What is a Multilevel Marketing Plan? Multilevel Marketing is a method to sell goods and services through other distributors. These plans promise that if you sign up as a distributor, you will receive commissions from sales you make, as well as sales of the people you have recruited as your distributors. On the contrary, a pyramid scheme’s commissions are primarily based on the number of distributors recruited and generally ignore the marketing and selling of products and services.
The difference between these two plans can seem unclear, but there is one key distinction – MLM’s are legitimate, and pyramid schemes are illegal, so it’s very important to do your homework.
The BBB offers the following questions to ask before deciding whether or not to join an MLM:
If you answered yes to any of these questions, you are probably looking at a pyramid scheme. While a Multilevel Marketing Plan can be a legitimate and exciting new venture, the bottom line is, do your research as you consider a MLM opportunity. It could be a pyramid in disguise.
Here are some tips to consider before you make your decision:
Keep in mind, a legitimate company will portray an honest picture of the opportunity, including the possible risks, rewards, and challenges. A pyramid scheme, however, will enthusiastically sell you on the promise of making tons of money with very little effort. Unfortunately, self-deception is the hardest to recognize so take the time to research thoroughly before getting caught up in the hype.