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

---

The X Factor of MLM Mega Earners

Send this to your downline. It will give them a... Read More

10 Killer Ways To Sell Your Back-End Products

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

Network Marketing: Extended Definition

Entrepreneurial spirit is sweeping the Nation's interest at a phenomenal... Read More

The Big Dream Life

It's 9:36 am when your eyes suddenly pop open. You... Read More

3 Key Skills Required to Running a Successful Internet MLM Business

An internet mlm business is very different from an offline... Read More

MLM Success Training - The Secrets to Deciding Who You Will Become in MLM

There are many factors that impact Success in life. And... Read More

How Network Marketing Can Help You Build A Second Income Fortune

We live today in an age of inflated money- where... Read More

How To Start A MLM Business

When considering whether to start a MLM business, begin with... Read More

Residual Income Awaits Only by Staying in the Game

"Freedom is a scent, like the top of a new... Read More

MLM Recruiting- MLM Online Recruiting 101 for Network Marketing

Recruiting on the Internet in MLM is very popular! Yet,... Read More

New Style Network Marketing - Why Professionals are Rushing to Join!

There is absolutely no doubt. Network marketing or multi level... Read More

The Concept of MLM Mega-Mind

In the old days we would play in the woods... Read More

MLM Blunders

It's really strange! Too many people start an MLM business... Read More

Trapped and Want Out?

Do any or all of these statements sound familiar or... Read More

What is a Lead Worth?

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

MLM Success - For MLM Success, Its ALL About VALUE in Network Marketing

There is ONE Word in Network Marketing that prospects seem... Read More

The Importance Of Cash Flow In A Network Marketing Business

Many networking marketing affiliates and mlm business owners face one... Read More

Do You Really Want To Try Network Marketing?

Make no mistake it takes a unique skill set to... Read More

Luck Is What You Make it

I get so frustrated when people call me lucky. They... Read More

Why You Should Start Your Own Online Business ? The Power Of The First Step

10 to 20 years from now, most of us will... Read More

Make Your Home Party a Success!

Home parties can be a lot of fun and a... Read More

MLM Success Secrets- The Two Unchanging Laws in Network Marketing

There are two unchanging laws in Network Marketing that most... Read More

Tips For Finding A Work At Home MLM Business Opportunity

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

Quality Beats Quantity Every Time

Back in the early days of developing my home based... Read More

I Could Have Quit $1,000,000 Ago

Two Things (Maybe Three):1) Over the course of this on-line... Read More