Multi Level Marketing or Pyramid selling? What’s the difference? MLM , pyramid , ponzi,scam

ANOTHER MLM OPPORTUNITY

Does your stomach sink when someone invites you to a business opportunity? Mention Network Marketing or Multi Level Marketing to most individuals and they automatically assume it is a pyramid or Ponzi scheme and yet some of the largest and fastest growing companies in the world attribute their growth to affiliates earning commission for selling their products… you would not consider companies like Amazon and Amway to be dodgy would you? So why is an MLM business likely to make you want to run a mile?  Because there have been some horrendous scams out there and we are all very wary and uneducated.

SO HOW DO YOU DIFFERENTIATE BETWEEN SCAMS AND LEGITIMATE MULTI LEVEL MARKETING OPPORTUNITIES?

We let’s take a look at what a Pyramid scheme is

A pyramid scheme (which incidentally is illegal) usually doesn’t have a product behind it.  It takes a hefty upfront fee without anything in return and money is made (mainly by those at the top) by recruiting others to come in.  The overall business model is unsustainable and creates no benefit other than a redistribution of money.  Many people will lose their money to make good the claims for a few.  Generally schemes telling you to do very little for great rewards with nothing for your joining or admin fee are pyramid schemes.  Another name is often a Ponzi scheme – named after Charles Ponzi – who used the technique in the 1920s to pay returns to other investors from money paid in at the bottom.  There is no profit earned and they require constant flows to maintain the scheme… he was by no means the originator of such scams as similar money making ventures were mentioned by Charles Dickens in the novel Martin Chuzzlewit in 1844 and in 1857 Little Dorritt. However Ponzi is the one remembered as the perpetrator if not for the method he used.

SO WHAT SHOULD YOU LOOK FOR IN A MULTI LEVEL MARKETING COMPANY?

1. Product, training or benefits to the value of your joining or enrolment fee
2. Products and services to sell as well as rewards for recruiting
3. Products are at a reasonable price
4. Income is achieveable just for selling product
5. Quality marketing material such as own web pages, banners etc
6. Back up and support helplines and emails
7. Quality marketing material
8. Quality upline training
9. Is there a product money back guarantee?

Understand the difference. Multi-level marketing companies follow a similar concept to a pyramid scheme, which is a reason for most of the confusion, except that two significant differences exist.

1. • Members at any level of a multi-level marketing model can make income through the company’s products and/or services without signing up any new members.
   • Members of any level in a multi-level marketing model can advance past the people who signed them up.
   • Multi-level marketing companies are LEGAL!

The main reason for this type of model is to reduce the cost of advertising. In this very social age rewarding the company’s members for “spreading the word” is a much more trusted and faster way of getting new customers than adverts and mailshots.  Unlike a pyramid scheme, any member on any level can make money without ever having to sign-up a new member. However, like a pyramid scheme, once the company reaches a certain population level, it becomes impossible for any new people to sign-up. Therefore, the people at the bottom cannot make bonuses for sign-ups, but they will still be able to make money based on the company’s product and/or services.  So if your products is in start up of a new concept, product or service you have the opportunity to make much more money than in a market that is saturated.
Look at the sign up fee…

1.  Is it reasonable?
2. Do you get goods or services that match up to the fee?
3. Can you make money from the product itself?
4. Can you make money without signing people up?

Like any business, your income depends on your ability to sell products or offer services. Any company that promises you money for doing nothing is not being honest with you and you will fail.

 There are many companies currently using this model to get new customers.  Many of the online mlm marketers have made a great deak of money at the launch by investing in the companies and getting them started.  This is of course a risk as how do you know how good a company and its products are likley to be if they are not tried and tested?  You are risking your own reputation on a product that will be going through beta testing and getting the bumps ironed out – BUT the rewards can be almost unbelievable if you have the right contacts and mindset.  Here are just a few of them.. ACN, Amway, Avon, TalkFusion, Tupperware, Nu SkinNetwork marketing is a very legitimate business, but some models may stray along a very tight line such as Herbalife who are being sued and have already had one court say they are a pyramid scheme.
To get the best return you need to be focused, be able to communicate with people or know someone who can and be willing to put in time and effort… if you have a product launch that has been successful in another country it is a strong bet it will be in yours too so look out for them – there will be some differences but at least they have ironed out most of the issues.  If it has been running a long time… it may now be staid and out of date as well as the market being saturated.. on the other side of the coin every NEW shiny toy will not make you money! So take care in looking at the business model behind the  idea.
Network marketing has proved itself as part of the new economy and a preferred way to do business here and around the world and it is by duplicating the same successful acts throughout the network that everyone benefits – the best network marketing or mlm models will reward those running the teams and sponsoring people in for helping their entire team to succeed NOT just for sponsoring them in to the system!
Just because a compensation plan goes more than one level deep does not make it scam.. it actually encourages those above to share their knowledge of what is working and get others to be successful so don’t be instantly dismissive.
Network marketing isn’t a get-rich-quick scheme. Success will follow for those who consistently put in effort, and who can repeat that… if they are leveraging a tiny amount off the people they are helping rather than on their own efforts burning them out they will be incredibly successful.

J. Paul Getty “I would rather make 1 percent on the efforts of 100 people than 100 percent on my own efforts.” This is the cornerstone of network marketing.

So to be successful in an MLM opportunity:

1. Find a product you like, have tested and believe in and check if they have any industry awards, affiliations and are following the DSA regulations such as not taking any more than £200 in the first 7 days…
2. Check out the training and the online comments about the product and take an average of what you find… most people will happily say nothing except if the product is exceptionally good or a bit rubbish…
3. Get to know your sponsor – what will they do for you over and above the norm or will they expect you to fly solo?  We have had both brilliant and invisible and believe me those who want to help you are far better than those who either don’t get it or don’t care.  They are duplicating someone else’s success so ensure they are doing something right and if you like them great – if you don’t find someone else…

In this age it is a huge shame if you do not open your mind to some astonishing opportunities – so ask a few questions, look out for what works well, has a high need, is not saturated and that you will happily invest time and money to make successful. After all we are all part of the largest pyramid scheme ever created…. it’s call life…




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