Scams - Multi-Level Marketing Scams

ProgramCritique.com Review:

Multi-level marketing itself is not a scam. It is a legitimate and popular method of conducting business. The genuine MLM works through the sale of a product or service through a chain of distributors. These distributors are paid commissions based on their sales and then number of people they are further able to recruit. This chain of distributors is referred to as a downline.

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The scam is in pyramid schemes. These are MLM’s that are purely relying on people being recruited into the downline. The owners of the company usually offer commissions based on the number of people you recruit. These fresh recruits are then forced to buy start-up kits and stockpile. As a result, the company earns more money. Any product that exists in such a scheme is usually a namesake and used as a means to make the business sound legitimate. Pyramids hardly ever make sale to outside customers. The chain usually thrives by selling products to people within the pyramid and in your downline.

The product might vary and so might the name but pyramid schemes are illegitimate and usually people who are part of the scheme as distributors end losing a lot of money. Therefore, it is important to do your homework before you sign up as a distributor for an MLM.

You must question the past trackrecords of the company and check with a local Better Business Bureau or the Attorney General’s Office. Moreover, the network must be heard of and have genuine downlines. Do no fall for promises of fortune that will follow by just purchasing a start-up kit. No matter how well backed it may be, MLM is also selling and is as challenging as retailing.

To add to it, as a distributor you become responsible for all claims you make on the company’s behalf. Hence, it is a good idea to confirm the quality of the product you are selling as well as check on distributor compensation since you are answerable to your downline. MLM is popular and if you are a little careful, you can avoid any frauds.

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