Multi-Level Marketing Opportunities

Multi-Level Marketing Is Legal, Pyramid and Ponzi Schemes Are Not.
March 30, 2017

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 @   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: 

  • How many people are on your team? 
  • How long have you been in the business? 
  • How much money did you make last year? 
  • What were your expenses last year? 
  • How much product did you sell to customers and how much to distributors?
  • What percentage of the money you’ve made came from recruiting other distributors and selling them inventory or other items to get started?

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