subject: The Truth About Multi Level Marketing Scams [print this page] The Truth About Multi Level Marketing Scams
There is a great deal of confusion about multi-level marketing scams. Maybe the most crucial truth to point out suitable from the starting is that multi level marketing scams do not exist. In truth, multi level marketing companies are legal and legitimate businesses. Synonyms for multi level marketing are network marketing and MLM. But no matter how you say it, multi level marketing is on the up and up. When you think "multi level marketing scam", what you are truly referring to are pyramid or Ponzi scams. It's pretty effortless to see why they are confused so don't really feel negative.
Multi level marketing is based on a pyramid hierarchy (as are quite a few other forms of conventional business models) just as pyramid and Ponzi scams. Yet another similarity among the multi level marketing and pyramid/Ponzi schemes is that you generally have to pay an initial commence-up fee. When I say "usually", I am only refering to multi level marketing businesses since some of these don't basically call for an initial get started-up fee though ALL pyramid and Ponzi schemes need an initial investment. You'll see why in a minute.
But yet another similarity between the legitimate MLM and the illegitimate pyramid/Ponzi scheme is that in each, you earn commissions on the people today that you end up recruiting into your business. But pay focus mainly because here is exactly where you can genuinely inform if a business falls beneath the multi level marketing category or the pyramid/Ponzi scheme category: Although your initial fee in the network marketing also buys you some of the solutions or services that the company sells, the initial fee in pyramid or Ponzi schemes doesn't get you anywhere but "in" the business.
With pyramid/Ponzi schemes, you are generally just paying to be a member of this group which provides nothing at all but the opportunity for you to make income off other individuals who come into the identical group. In legitimate multi level marketing businesses, you can also earn from recruiting other folks into the business. On the other hand, you are recruiting others into the business to sell the merchandise or services that the company gives.
Network Marketing (or you might say MLM or multi level marketing) businesses have undergone really a bit of scrutiny due to their similarity to Ponzi and pyramid schemes. In fact, when these illegal businesses were 1st born, they did pretty a bit of damage before the FTC was in a position to catch up with them. And MLMs have suffered also mainly because of the mistaken connection among the two. Nevertheless, the great news is that strict manage by the FTC has pretty significantly wiped away pyramid and Ponzi scams. So don't forget, if you do see a business that seems to be supplying commissions not having supplying any form of item or service, make positive you examine it out with the FTC. And most of all, try to remember. . .multi level marketing scams do not exist.
