Are You Joining an MLM Business or a Pyramid Scheme?
If you browse through the articles on some of the article directories or go through the blogs of some authors, there are many people who write articles claiming that so and so company in the MLM industry is actually a pyramid scheme. And pyramid schemes are something to be avoided totally is the general perception. If you are someone who is interested in a work from home opportunity, you might have valid doubts about the company you are joining. You might wonder whether it is actually a pyramid scheme or a valid network marketing opportunity. I will give you 3 points based on which you can differentiate whether a company is a pyramid scheme or a legal MLM company.
1. Product: An MLM company has products which it sells. These might be physical products like juices and pills or services like VoIP and energy supply, but there is something tangible to be sold. In a pyramid scheme, there is no product. People simply join a pyramid scheme by paying money and bring in other people who join by paying in money but there is no product involved. Some critics have classified MLM companies which sell products based on the fact that a large percentage of the products are consumed by the distributors themselves. However, the fact still is that there is a product. If you find that the company is asking you to join and if there is no product involved, you can be sure it is a pyramid scheme.
2. Equal opportunity: An MLM Company provides an equal opportunity to all its distributors to earn money. It does not matter when you start or at what level you start, you can still earn the dollars. It is not so in a pyramid scheme. The whole purpose of the pyramid scheme is to make the guys at the top of the pyramid rich while those at the bottom of the pyramid are not making any money. So while evaluating a home business, you need to talk to many other distributors to find out how much money they are making or is it that only a few at the top are getting richer at the expense of others.
3. Legal: Pyramid schemes are illegal by law while MLM companies are not. MLM companies have huge offices and it is easy to reach people who are working in their corporate offices while it is difficult to get to talk to someone in the top of the pyramid.
If you consider these 3 criteria, you will be easily able to make out whether a company is a pyramid scheme or a valid MLM company.
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