MLM or Pyramid scheme - What is the difference?

Many people question the ethics of MLM. They claim that the people on the top get all the benefit from the people working below them, while the people below don't get much if anything at all. Nothing could be further from the truth!

Think about where you work. Isn't it true that the boss is raking in the big bucks out of the money YOU are making for the company? And if there is cutbacks who is the first to go? Definitely not the boss and probably not his bonus.

With an honest MLM, you can easily make more than the boss if you put the effort into it. He gets a little bit from your sales, but you get the lion's share.

But isn't this just a big 'pyramid scheme'? Yes and no. Anyone who works a conventional job is in a pyramid scheme. Every company, army, and government in the world is built on the pyramid concept. However, with multilevel marketing, you aren't held back by the people above you like you are in a conventional job.

With an MLM, you can build your business as large and as profitable as you want it to be.

So, what is a Pyramid scheme?

These illegal scams involve a large number of people at the bottom of the pyramid, all of them paying money to a few people at the top. Each new participant pays for the chance to advance to the top and profit from cash paid by others who join down the line. Pyramids resemble a legal MLM in structure, but there is an important difference. Pyramid schemes seek to make money from you, while multi-level marketing seeks to make money with you. The Direct Selling Education Foundation suggests that, before you sign up with a company, you ask yourself these three questions:

1) How much am I required to pay to become a distributor? An MLM company will generally charge a small start-up fee. Pyramid schemes make most of their money from signing up new distributors, so their start-up charges are often very high. These start-up fees may be called many things and you may be told they are required or are recommended purchases for training, computer services and product inventory.

2) Will the company buy back unsold inventory? Honest companies will usually buy back any products that you fail to sell. Bogus companies will stick you with the inventory.

3) Are the company's products sold to customers? Pyramid schemes

gain nothing by actually selling a product, and often don't sell anything at all. They focus only on gaining new investors. Be wary if you must start by buying a large amount of product. Also, take a good look at the product itself. Multi-level marketing depends on quality products that are well-priced; pyramid schemes do not. Pyramid schemes are much like chain letters; they require mathematical gymnastics that cannot possibly work. Pyramids always collapse in the end, and only a very few (usually the con artists themselves) make any money on them at all.

As with any other investment, before you commit ask questions about the company, its products, start-up fees, buy-back policies and its earnings. Take your time and investigate any information you're given. Talk to other investors and research the company. Don't act hastily!

You have permission to publish this article electronically or in print, free of charge, as long as the bylines are included. A courtesy copy of your publication would be appreciated.

Paul Marsland is an independent distributor for a Multi-level marketing company with 25 years of experience and trading in 59 countries worldwide. Along with his wife Annette they run a successful MLM business, full time from home, around their young family.
For more information please go to: http://livin-the-good-life.biz/?r efid=ezineaticle-567883263

In The News:

Pyramid schemes  Lexology
Network Marketing : Good or bad?  The Sangai Express
MLM companies continue their hot streak  Natural Products INSIDER
Simply Put: Heat on Big Tech  The Indian Express

WebToors Guide To Success

There are over 700 million computers in use in the... Read More

10 Killer Ways To Sell Your Back-End Products

A back-end product is a product you attempt to sell... Read More

What is a Lead Worth?

Lately, I have been happily attracting leads for my Internet... Read More

Dream Stealers

"Honey, I tried to tell you this wouldn't work.""Why did... Read More

Why Network Marketing?

Put simply, Network Marketing is just a way for businesses... Read More

Residual Income, a Myth?

I'm writing this in response to the every distributor in... Read More

Systems Dont Fail But People Do, Does Your Company Has All Necessary Systems In Place?

The secret of success is following a proven system. As... Read More

Finding Targeted MLM Leads

The objective of multi-level marketing (MLM) is to sell the... Read More

Tips For Finding A Work At Home MLM Business Opportunity

If you wish to start a work at home MLM... Read More

The Best Network Marketing Company

...is the one that will work best for you.With that... Read More

Creative Marketing for Home Businesses

Okay, so you're working from home and you need a... Read More

Steps That Spell Success in MLM

Many people want to get into multi-level marketing without knowing... Read More

Effective Use of Traffic Exchanges

Like them or love them, traffic exchanges always seem to... Read More

Let Them See It To Sell It

You know that problem of having a fantastic offer that... Read More

MLM Prospecting- The 4 Steps to BLAZING Network Marketing Prospecting

What is MLM Prospecting?According to Webster's Dictionary, prospecting is looking... Read More

Why Network Marketing Never Works for You

Let me tell you this... if you always jump from... Read More

Using Testimonials To Create Traffic to Your Web Sites

Most good sales pages for internet marketing products, services or... Read More

Network Marketing Secret: Go Sheep Shopping, You Get Sheep

Recent discussions with fellow network marketers have centered on whether... Read More

MLM Cyanide Pills: Top 5 Sure-fire Ways to Kill Your Network Marketing Business

If I walk down the street today, telling people about... Read More

Child-like Confidence will Build Your Network Marketing Business

You learned most of what you know in your first... Read More

MLM Network Marketing Training - Are You Thinking Yourself Out of MLM Success?

After nearly 20 years in this MLM industry, I have... Read More

Network Marketing Training - The FAST Start New Distributor MLM Success Formula

That is how most people want to go in this... Read More

MLM Pyramid Misunderstanding, Its Actually Inverted and Fair

Many people that bad mouth MLM industry use the pyramid... Read More

25 Proven Strategies For Improving Your Telephone Results To Build Your MLM Dowline

1. Reap what you sow! What does that mean? It's... Read More

The Dirt On MLM

When I told a friend of mine about my information... Read More