To most, multilevel marketing (MLM) is nothing but a scam, Ponzi scheme, or something that is flat out not legit.
For those involved, they will always think otherwise and they have every right to.
The problem that lies within the MLM world comes in many different forms and I will like to discuss them within this simple blog post.
But first, let me answer the very common question…
Is MLM a Scam?
It is a business model that involves real products and a bunch of requirements just to get started.
But don't get confused with every MLM as some do come with products but can still be considered a Ponzi scheme, if they do not abide by the FTC and its rules.
These rules are very precise and most companies fall out of line by simply ignoring a few of them, which will then result in getting shutdown and investigated.
This is very popular but do not let this blanket the whole world of network marketing as there are legit companies like Amway that have been around for 50+ years.
Not to say that everything is legit either as if that was the case then we wouldn't be having this discussion.
The Pyramid Style Business Model
This is where things can get a little fuzzy with anyone new to network marketing.
The way MLMs are structured are very much in the form of a pyramid.
Sure almost everyone involved are at the bottom of the pyramid but that does not mean that all MLMs are scams.
Upon joining and growing your MLM business, you will utilize the pyramid style business model, placing you at the top of YOUR pyramid.
Everyone that joins under you will then be placed under you as well as those that join from the people you signed up.
When this happens, a pyramid is naturally formed, thus allowing you to make money through the different levels.
And I'm sure none of you have any problems making money from people you don't even know, right?
Well that's how these pyramids work and they are actually one of the business models I actually like.
Now what usually happens, is schemers and scammers take this model and use it to their benefit.
Pyramid schemes are very common and will probably never stop.
These come in the form of an actual MLM but can be distinguished with several characteristics.
One, there is no product attached to the “opportunity”.
With hype comes the chance to promote such an opportunity and in most recent years, you may have seen crypto currency type Ponzi schemes.
Secondly, they all promise some type of return of investment and promote a money making opportunity.
Lastly, recruiting is the name of the game and that is the only way for you to make money.
Too Good to Be True
At the end of the day, if any so called opportunity seems a little fishy, has no products, and flat out promotes nothing but a way to make money, then the chances are that you have just encountered a Ponzi.
If you feel that something is too good to be true, then it most likely is.
I don't care if anyone showed you that they made money, that means nothing.
Making money through any legitimate business model requires this thing called work and will never focus on the amount of money you can make.
Not to say that they can't motivate you or market to you in such a way but you can tell by the simple figures they present.
“Make $10k by tomorrow” is what you will see compared to “make a solid income”, which is fair and completely fine.
I say that because most people will let the money take over, they will join, and eventually find the need to seek other opportunities.
This is a very common cycle that dreams get put on, so please, just don't join something just because someone told you that you can make money.
I mean, that person introducing the opportunity for you is doing it because they will benefit.
This is also the same reason why I refer people to the affiliate marketing business model, since recruiting other to make money is not cool with most.
Besides that, be scam smart and always, always, do your research.