How are you able to tell the difference between a legit MLM opportunity and one of those network marketing scams or pyramid operations everybody has warned you about?
Exactly what's the trick to discovering the distinction? Is there a speedy way for newcomers to sort out the winners from the losers prior to having been taken for an economic ride?
Network Marketing Cons Outlined
There are lots of assorted terms for network marketing, featuring MLM, matrix marketing and dare I state pyramid schemes, however they all come down to a business model for offering items and services through networks of independent providers and direct salespeople. Ask anybody who the most popular network marketing provider is and they will undoubtedly say Amway.
Amway has a network of tons of active providers globally who produce billions of dollars in sales per year.
Traditionally, Amway has succumbed to the "network marketing cons" label several times. But in every case, including a 1979 FTC investigation in the United States, a 1997 Belgian court action and a 2008 court judgement in the United Kingdom, every fraudulent claim was dismissed.
Fundamentally the FTC discovered that Amway was not guilty of being a pyramid scheme and that the distributors where not breaking any laws through their compensation plans. It is not illegal to recruit people and have them sell your products or services and obtain bonuses in commissions for sales volume.
Network Marketing Scams Exposed
In a legitimate network marketing opportunity, commissions are earned only on sales of the company's products or services. Commissions can be paid on both wholesale and retail sales. But no cash could be earned from inducting other people as a distributor. To paraphrase, you cannot make a cent from sign up costs. If a company pays out a signup fee, probabilities are it will fall into that feared network marketing tricks class as it then becomes an illegal pyramid or ponzi scheme.
You simply can't make any money by recruiting other distributors. You will not make any hard earned cash from sign up fees. If a company supplies you something free of cost without any kind of product sales, then you're probably looking at the network marketing hoaxes that show up each year all them exactly like ponzi or pyramid schemes.
Unfortunately every year there are people that prey on would be network marketers by supplying dubious MLM opportunities. They undoubtedly will not last in excess of a few months or as few a couple of years because they take people's cash rapidly, do not provide the product or service and afterwards disappear. Extremely few bogus network marketing providers will definitely be there after five years.
The best way to defend yourself against becoming a victim of one of those network marketing scams is to position yourself with a definite company which has survived the test of time and legal examination. As an example, Nexera.com hosts a once a year list of the top twenty-five MLM companies that fall into this criteria:
* They have a legitimate multilevel settlement deal * They've been in business for over a decade * Their site has good Google ranking (PR1 +) * The web site has an Alexa ranking * The provider appears in Google trends
By taking a portion inside an organization that has established a track record of staying in business you reduce your dangers tremendously.
Nevertheless, even the criteria listed above has absolutely nothing to compete using the probable good results you will have in such a firm. So now you know the traps, and are greater equipped not to fall into the dreaded "network marketing scam" category.
Exactly what's the trick to discovering the distinction? Is there a speedy way for newcomers to sort out the winners from the losers prior to having been taken for an economic ride?
Network Marketing Cons Outlined
There are lots of assorted terms for network marketing, featuring MLM, matrix marketing and dare I state pyramid schemes, however they all come down to a business model for offering items and services through networks of independent providers and direct salespeople. Ask anybody who the most popular network marketing provider is and they will undoubtedly say Amway.
Amway has a network of tons of active providers globally who produce billions of dollars in sales per year.
Traditionally, Amway has succumbed to the "network marketing cons" label several times. But in every case, including a 1979 FTC investigation in the United States, a 1997 Belgian court action and a 2008 court judgement in the United Kingdom, every fraudulent claim was dismissed.
Fundamentally the FTC discovered that Amway was not guilty of being a pyramid scheme and that the distributors where not breaking any laws through their compensation plans. It is not illegal to recruit people and have them sell your products or services and obtain bonuses in commissions for sales volume.
Network Marketing Scams Exposed
In a legitimate network marketing opportunity, commissions are earned only on sales of the company's products or services. Commissions can be paid on both wholesale and retail sales. But no cash could be earned from inducting other people as a distributor. To paraphrase, you cannot make a cent from sign up costs. If a company pays out a signup fee, probabilities are it will fall into that feared network marketing tricks class as it then becomes an illegal pyramid or ponzi scheme.
You simply can't make any money by recruiting other distributors. You will not make any hard earned cash from sign up fees. If a company supplies you something free of cost without any kind of product sales, then you're probably looking at the network marketing hoaxes that show up each year all them exactly like ponzi or pyramid schemes.
Unfortunately every year there are people that prey on would be network marketers by supplying dubious MLM opportunities. They undoubtedly will not last in excess of a few months or as few a couple of years because they take people's cash rapidly, do not provide the product or service and afterwards disappear. Extremely few bogus network marketing providers will definitely be there after five years.
The best way to defend yourself against becoming a victim of one of those network marketing scams is to position yourself with a definite company which has survived the test of time and legal examination. As an example, Nexera.com hosts a once a year list of the top twenty-five MLM companies that fall into this criteria:
* They have a legitimate multilevel settlement deal * They've been in business for over a decade * Their site has good Google ranking (PR1 +) * The web site has an Alexa ranking * The provider appears in Google trends
By taking a portion inside an organization that has established a track record of staying in business you reduce your dangers tremendously.
Nevertheless, even the criteria listed above has absolutely nothing to compete using the probable good results you will have in such a firm. So now you know the traps, and are greater equipped not to fall into the dreaded "network marketing scam" category.
About the Author:
Joe Burke writes under the names jbmuchin and augustus1. His usual topics are MLM, Internet Marketing and Network Marketing. His articles can be found on many article directories.network marketing tips, andnetwork marketing tips
