What is MLM & Is It Legal??
First of all, the basic terminology can be confusing - Network Marketing, Multi-Level & Referral Marketing are all the same biz - just a different branding spin on a business/commission structure that pays you for your sales as well as on the sales - of those you “recruit” into the business (this is known as your “downline”).
Party Plan Sales is another type of structure often used by direct sales companies (TupperWare for example!), and may or may not pay the same “multi-level” commission structure, it just depends on the particular company and whether or not you have the ability to recruit a sales force or downline - just different names for basically the same structure.
In any of these types of companies, the emphasis is on product sales - and most importantly - there IS a legitimate product or line of products to be sold. These are NOT to be confused with the illegal structure known as Pyramids.
Pyramid schemes mimic multilevel marketing in that they compensate their so-called “distributors” on a multilevel structure, providing incentive to sell the business opportunity to prospects. The difference, however, is that pyramids focus primarily on recruiting new salespeople for your downline, not on selling products or services. In fact, in many cases there is no real product or service. ALL gifting or loan programs fall under this category, there are no exceptions.
Any program that requires an investment that you will get back simply by bringing in other “investors” is also a pyramid. There have been attempts to work around this by offering ebooks, “loans”, etc, etc…but most of these programs tend to work in “cycles”, “circles”, “phases” etc - where your position rises as you bring in bodies, then drops you to the “bottom” level again after you get your pay-out…and the cycle starts all over again. The problem is that sooner or later - the pyramid runs out of prospects ….and the bottom level loses everything. Over the past two years some very well known people have been arrested and convicted for running pyramid scams. Although the prospect of easy money may be tempting - it is not worth the risk.
There are enough legitimate network marketing companies to choose from that you should have no problem finding one that will fit your needs, personality and work style!
The Benefits Of MLM:
Successful MLM companies understand the importance of training their distributors and creating systems that assist their distributors in making sales and building their businesses, online and off. With A good MLM company, you receive support from your upline (the person that originally brought you into the company) as well as the company itself.The systems provided are usually easy to follow and duplicate with little technical skill.
But above and beyond any other benefit of joining MLM opportunities is this one - the creation of residual income. There is no other way to put this - find a good product or service that people will buy and use month after month - and you are on your way to creating streams of income that will last a lifetime.
As you have probably guessed by now, we believe in spreading our income streams across several different types of products with several companies. In this we minimize the risk of market changes, or popularity of a single product declining. By creating residual income streams, we offset the risk even more!
The Downside of MLM -
There are two main downsides with MLM, the main one is that a lot of people have misconceptions about what it really is. Many people want to lump true, legitimate multi-level marketing companies with the illegal scams and pyramids. Fortunately, as the growth of MLMs online has expanded - this myth is being quickly reversed, as ordinary people are changing their lives through network marketing online!
The second issue? MLMs DO require a monetary, and usually ongoing investment. But don’t let this deter you - some of our most successful ventures have had very minimal expenses, and most of them are for products and services that we spend money on monthly anyway. The expense was already in our budget - but now we have the added benefit of building a business with those dollars at the same time!