Multi level Marketing Companies: The Holy Grail for Fast Cash or Mere Scams?

So let’s talk about multi level marketing companies… Advertising techniques, customized marketing solutions, and affordable online marketing are all sensible and viable options when you are confronted with ways to keep your business profitable. But what if you discovered some profitable business ideas that were a little different. Maybe, they even made you a little uncomfortable.

“Why get bored stiff working 9 to 5 and live from pay check to pay check when for a small amount of so and so dollars, you can easily make thousands in commissions if you sign up as a distributor?” Why indeed? And so, you suspend your common sense and part with your hard-earned money, hoping that in a few months or weeks, it will come back to you tenfold.

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Borne out of a need for instant cash with just a minimal amount of capital and legwork, multi level marketing is here to stay. And this is not a bad thing with the right company. And, yes, the best companies that offer the best success programs will be revealed on this page. Business and Ideas mixed together to create some very sweet deals.

What is multi level marketing and how does it work?

Multi level marketing is a way of selling products and services through distributors. The premise sounds simple enough: You sign up as a distributor, and get commissions for your sales and those of your recruits, commonly referred to as “downlines.”

Independent distributors of multi level marketing companies expand the business either by actively selling the products and services themselves, or by managing their recruits who in turn also market these products. Another way for distributors to amass profit is to purchase products from the parent company at wholesale price and retail these.

Some of the larger and more legitimate companies that utilize multi level marketing are Amway, Avon, Fund America, Inc., Forever Living, Excel Communications, Equinox International, Mary Kay, Nu Skin Enterprises, and Tahitian Noni. These companies make their presence felt in 50 states of the United States and in more than 100 countries. Other terms multi level marketing companies use to describe their business are “affiliate marketing” or “home-based business franchising.”

Viewed by many as a mecca for unlimited income, it is no surprising that scores of people, from enterprising housewives to students, from the unemployed to the 9 to 5ers, get tempted, and eventually succumb, to the charms of multi level marketing. In fact, some physicians were found to be selling health-related multi level products to patients, prompting the American Medical Association Council on Ethical and Judicial Affairs (CEJA) to ban physicians from selling “non-health-related products” to their patients.

Are Multi Level Marketing Companies Legitimate?

Many criticisms have been heaped on these types of marketing companies for their seemingly blatant disregard for the law of supply and demand (oversaturating the market with more products than people can actually make use of), and for being a “human churning machine with no off button,” as one analyst would say. Still, others find the often cult-like propaganda used by multi level marketing companies, such as slick video tapes and intense pep-talks, quite disturbing.

Try to get within five feet away from multi level company distributors and you would immediately hear them mouthing their mantra of “instant money, unlimited commissions, overnight success, road to riches, and incredible ground-level business opportunity.” The truth is most successful sales people do have an enthusiasm for what they are selling – and well they should!

For all the negative connotation attached to multi level marketing it is not fair and not accurate to make a sweeping dismissal of all these business ventures as sophisticated con schemes. After all, many users of this marketing do earn a substantial income from it.

It is unfortunate that when some people are not great at sales, and they do not make money in multi level marketing – they claim it is a scam. This is simply and utterly false. The only things needed to make great money is to have the right success mindset and understand how to achieve authentic success.

So, How Do You Know For Sure?

So, how does one set apart the rotten tomatoes from the fresh, juicy ones? Sometimes, it is not easy to distinguish legitimate and reputable multi level marketing companies from illegal pyramid or Ponzi schemes. One positive sign of legitimacy which the Federal Trade Commission uses as a gauge is when the commissions are earned on sales of products or services and not on recruiting other people alone (asking downlines to pay sign-up fees).

If the money paid to the members of a multi level marketing company come primarily from membership fees of the recruits, or the distributors are required to buy more product than they could sell, that particular multi level marketing company could be engaged in pyramiding.

Another common method of testing legality is to check if a particular multi level marketing company adheres to the 70% rule which requires members to sell 70% of previously purchased products before they could place new orders with the company. This prevents members from resorting to “inventory loading” to snag bonuses. While some companies readily allow consumption of products among the participants themselves, some companies implement this a little differently: selling 70% of the purchased products to buyers outside of the organization.

Is it safe to join multi level marketing?

So, you just can’t resist it, can you? As long as you steer clear from the ones that clearly defies the universal law of earning probability by promising impossible financial success, you may give multi level marketing a try.

Here are the 10 commandments you can adhere to to avoid getting scammed by multi level marketing companies that may be pyramids in disguise. Most of these suggestions come from the FTC itself.

  1. Thou shall avoid multi level marketing that include commissions for recruiting additional distributors.
  2. Thou shall beware of multi level marketing companies that demand new distributors to buy expensive products and marketing materials.
  3. Thou shall be cautious of multi level marketing that promise that you will make a lot of money by continuously recruiting downlines.
  4. Thou shall beware of claims by multi level marketing companies that you will be selling “sure-fire” or “cure-all” miracle products and making enormous earnings by doing so. Always look for evidence.
  5. Thou shall learn to differentiate between real testimonials or those made by paid decoys by multi level marketing companies to lie about so-called huge earnings.
  6. Thou shall refuse to pay or sign any contracts during motivational or initial meetings with any multi level marketing. Think about the offer tenfold, or consult a lawyer if you must.
  7. Thou shall verify the legality of any multi level marketing with the Better Business Bureau and state Attorney General.
  8. Thou shall not suspend disbelief for multi level marketing companies that guarantee that you will not have to do any work at all; you just invest your money and that’s it. This one absolutely stinks of scam!
  9. Thou shall beware of any multi level marketing that make any suggestions that you pawn, sell jewelry, house, or other properties, or withdraw all your savings from the bank to invest in the business.
  10. Thou shall at least believe in the efficacy or personally have used the products you will be attempting to sell.

If a product is claiming something that you know from personal experience don’t work, why help promote a lie? If a multi level marketing company you are considering is guilty of violating as many as five of these commandments avoid this company like the plague!

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