subject: How Pyramid Schemes Can Look Like The Best Multi-level Marketing Companies [print this page] It is not simple to pretend to be a good networking company, but it is doable, and some are so good at it that they can seem like the best multi-level marketing companies you would ever have the choice of joining. They offer massive payoffs with virtually no work needed to be done in a particularly short time and at minuscule investments re liquid capital. It sounds like a good plan - only it's not. And it is not even legal.
How to Tell One from the Other
There a couple of things that legitimate MLMs have in common with pyramiding schemes, which explains why the really good ones can pass off as the best multi-level marketing companies :
1. Both business structures rely on a good-sized network to function well and bring in profits, so recruitment really is absolutely essential.
2. The basic organizational structure is also the same - upline, downline and affiliates.
3. The payout system is comparable. You get commissions from your downline's sales and you give commissions to your upline.
But if you look closely, you'll see the slight differences in these aspects :
1. While the best multi-level marketing companies will encourage you to build up your network, your profits will rely often on your sales and your efforts, not your downline's. Additionally, you actually have a product to sell that has market valuation and practical use. The recruitment process is, therefore , just a means to an end and not the focal point of your business plan.
The real reason why MLM firms are built is to deliver goods in the most efficient methods as possible without the need to go through nonessential parties and lose overhead costs and operational costs. The net is kind of adept in providing the medium for this undertaking, and that is the reason why MLM businesses are flourishing.
2. Pyramid schemes are downline-heavy while the best multi-level marketing companies would have a better-balanced organization. Again, this is because pyramid schemes are out to 'funnel' the profits from the downline to the upline and not share it all around the structure in proportionate means.
If the company that you are looking at joining gives you imprecise answers about their products, if you don't pay their enlistment fee first, or if it looks like their products aren't marketable ( like say, expensive gold coins ) don't sign up. It may not be a pyramid con, but it will not be profitable for you either.
3. In much the same way as your profits will come from your attempts, your downline's efforts will accumulate to their benefit first. Even if your downline stops right after you, they will still be able to earn income because the profits do not rely on their recruitment efforts but on their selling skills. And this is what makes the best multi-level marketing companies work. There are no piggyback rides on the lower tier's efforts, and anyone who does not like inducting can still earn cash however.
In the end, pyramid schemes will always reach a saturation level, and the ones at the lowest tier will suffer the most. The best multi-level marketing companies, on the other hand, will always attempt to give you a long and fruitful business.
Concrete Examples
There are lots of firms that have prospered with the MLM structure or technique. Look at companies like Avon, Tupperware, Sara Lee, and Mary Kay. You'll notice that these companies have big name brands and quality products to sell, and you do not have to enlist members to earn income from their business plans. These are the hallmarks of the best multi-level marketing companies, which is why they have been around a considerable time.
