Have you ever been invited to parties selling jewelry, clothes, make-up, kitchen gadgets, essential oils, or health supplements? These can be fun events but understand that these parties are essentially multi-level marketing techniques. The advantage is that this approach allows a seller to reach a number of people in a social environment and pitch their products or services. People make money selling product and recruiting others to be part of their sales teams. Multi- level marketing is legal, but there is a fine line between these businesses and illegal pyramid or Ponzi schemes. Before you become involved with multilevel marketing, know the difference.
What is the difference between multi-level marketing, pyramid schemes, and Ponzi schemes?
Multi-Level Marketing: With multi-level marketing, your income is based on the actual product sales. This can include both your direct sales and the people on your team.
Pyramid scheme: With a pyramid scheme, your income is based on the people you recruit to your team.
Ponzi scheme: A Ponzi scheme typically involves some type of fake investment opportunity. People invest money through a “trusted” individual who touts fantastic returns with little or no risk of loss.
Do your research before you engage with a multi-level marketing opportunity:
• What Will You Be Selling? Is this a product that you are excited about promoting to your friends and family? Are there training and marketing materials provided? What type of support does the company offer you?
• Research the Company. The internet is a good place to start. Look for reviews and complaints @ bbb.org. Use the search words like “review” and “complaint.” Search for news articles on the company or product.
• Understand the plan. What are the terms of the agreement? What expenses are yours? If you recruit others are you responsible for claims about how much money they will earn. Is there a track record of others that have been successful selling these products? Get all information in writing.
• Contact someone who has been successful with the company. Ask them things like:
About BBB® Serving Central Indiana
ABOUT BBB: For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2015, people turned to BBB more than 172 million times for BBB Business Reviews on more than 5.3 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada and Mexico, as well as home to its national and international programs on dispute resolution, advertising review, and industry self-regulation. BBB Serving Central Indiana was founded in 1916 and serves 46 counties in Central Indiana.