The Five Factors You Must Look at to Determine if Any MLM Opportunities are Illigal Pyramid Schemes……….
Well, I must say there are a number of MLM Opportunities that are really just plain old Pyramid schemes and are deemed illegal by the FTC !
Back in 1991 I was involved with a network marketing company . The products centered around home water filters and humidifiers. My brother was excited participating in it. I was too.
I remember at one of the rally meetings a man stood up to talk about how he made 25k per month with the company , and he was only 19 years old.
Needless to say , this company went under water for a while because the FTC looked upon it as illegal.
The reason why ? In this program , you could actually buy a certain amount of product from the git go and be placed in a higher commission tier.
In other wards, if you bought say $500 worth of inventory you were at 25% commission of your referrals’ earnings and if you bought $1,000 worth of inventory (i.e water filters, humidifiers) you would make 40% commission or there about !
It was indeed a pyramid scheme !
So I will give <b>5 factors</b> you need to look for to determine whether you are dealing with a Pyramid scheme or not.
<b>1. If the company is requiring very large sums of money to become a network associate with them, then that is a big red flag. Stay away !
2. If any MLM Opportunities require you to buy into a certain amount of inventory to qualify for payout then this could be a pyramid scheme. This is called upfront loading ,and it is the reason why the one I talked about earlier got slapped big time by the FTC. My brother and I purchased over $1,000 in inventory to start out as a diamond associate.
3. If the associates within any MLM Opportunities concentrate to a high degree about the income opportunity and push the attributes of the Product itself to the side…….well, then this is a tell tell sign that this company is headed in the wrong direction. It is probably nothing more than a Ponzi scheme which is illegal.
4. If the whole MLM program is based on a flimsy product that has no intrinsic value ,and it is product you can find most anywhere including Walmart then this is something you should take note of and turn and run the other way. (Especially if there is no retail sales of the product , to speak of.)
5. Finally, look at the top executives at any Network Marketing Company and ask yourself whether they seem credible and sincere about starting the company. Personally, ask questions about their track record. Or if they were in another MLM Opportunity before. If so, why did they leave that one and start this one. Basically, get a feel for the overall motives of the founder and leaders of the organization. If they are kind of vague about any of these questions or seem uneasy when you ask them , then reconsider joining them. It may just be an overnight scam where the top in charge get their money and leave while the others are left hanging (i.e. Pyramid Scheme)</b>
I hope this helps when you are trying or considering to join a Network Marketing Company. There are plenty of good ones. Ones where the last to join do not have to be the losers.
Remember, if you are at the end of the ‘ totem pole’ in any MLM Opportunities but really like the actual product and continue to use it , well then no one loses !