subject: What Makes Network Marketing Legal [print this page] Although legitimate network marketing is not illegal, many network marketing legal issues must be considered before you begin. The line between network marketing and a pyramid scheme is thin in some cases, so you must take the time to ensure that the program in which you are involved is not the latter. The industry has become much more regulated in recent years, so making sure that the company that you involve yourself with is legitimate is of the utmost importance.
Look at the Products
The first thing that you can do to avoid any network marketing legal issues is take a close look at the products being sold. Firstly, you must decide if the products have a place in the market. If you are selling completely useless products, while getting people to buy into a program, it could be considered a pyramid scheme.
Likewise, if the products are sold at inflated prices, but come with access to the program, you could see some legal problems arise. The key is that the product must be useful and sold at a fair price, with access to the network being an added bonus.
Upfront Cash
Another thing to consider is the amount of cash that is required to get started. Some companies will force you to buy into the program, call for a cash investment or require you to make significant purchases before you can begin. Legitimate business opportunities might require an investment, but you should not have to make mandatory purchases. Many network marketing legal problems arise when people are forced to make these purchases before they can begin with the actual program.
Leaving You with Merchandise
If the network marketing company has the right to leave you with any unsold merchandise if you exit the program, it could lead to network marketing legal issues. Look for companies that will re-purchase these items from you after you cease working with them, as this is a good indicator that the company wants to do things the right way. This includes any sales kits that you must purchase to get started.
Commissions
Perhaps the most important thing to look for in a network marketing company is what you will be paid for once you begin. If the company focuses mostly on the recruitment aspect of the business, then there is a good chance that it is a pyramid scheme. Legitimate marketing networks will pay you for the products that you sell, rather than the people that you can get to sign up underneath you. The company should also train you properly, so that you can make sales at a reasonable level.
Making Your Choice
In the end, you must decide on the merits of a company yourself based on the information that you are provided. Many companies that represent themselves as network marketing programs end up being pyramid schemes. These schemes never work out long term because you are selling substandard merchandise, your income potential is limited, and they are illegal. Consider the network marketing legal issues that could arise from your involvement and only work with legitimate network marketing companies because when operated properly, they can become long-term moneymaking opportunities.
