The Fine Line Between Legitimate Businesses And Pyramid Schemes
In affiliate marketing you get paid money, or credit, for recommending a product or service you love. The company may give you a discount code to give out to your network so that they will want to do just that. It is a win-win for everyone and the company has several people advertising their line vs taking out ads in magazines, etc. Some pyramid schemes pressure you to pay a large amount to become a "distributor." What are you getting for your money?
Pyramid schemes are not only illegal; they are a waste of money and time. Because pyramid schemes rely on recruitment of new members to bring in money, the schemes often collapse when the pool of potential recruits dries up . When the plan collapses, most people, except the few at the top of the pyramid, lose their money.
Just like the depicted flow diagram above, you have the product in your hand and it's time to make a plan to form a good sales idea. Then analyzing the current marketing strategy using research, observations, case studies, proper dig-ups from various sources, etc. This is the best way to create a strategy and in this manner, a marketing business model can be developed. In China, volunteers working to rescue people from the schemes have been physically attacked. The overwhelming majority of MLM participants participate at either an insignificant or nil net profit. Said earnings are then emphasized by the MLM company to all other participants to encourage their continued participation at a continuing financial loss.
You may also need to buy training and marketing materials or even attend in-person seminars. All things considered, it can cost hundreds or even thousands to get started. If that doesn’t work for you, there are plenty of other businesses you can start for $1,000 or less. Yes, there are some legitimate MLM opportunities out there. And if you’re a customer of a particular company and personally enjoy their products, becoming a MLM distributor can help you score a discount on those products and earn extra money on the side.
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No one in network marketing should ever put their eggs in other people’s baskets. The only pay you can guarantee is the main commission you are promised to make on your own sales. This should be upfront in every company and no confusion about how much you make with what you sell. Gather all information regarding the company, its officers, and its products or services. Get written copies of the company's marketing plan, sales literature, contracts, etc.
If the company and its distributors make money primarily from the sale of products to end-users (and not boxes of product accumulating in a distributor's garage), it's OK. Participants are also encouraged to bring in or recruit others into the program as participants. While they may not be pressured to do so, signing up new contractors provides a financial incentive for participants, who receive a percentage of the sales of their recruits. Beware when the products or services are simply vehicles for recruitment.
The entire purpose of a pyramid scheme is to get your money and then use you to recruit other suckers (ahem - distributors). A supposed marketing, business or investment opportunity is predicated on you recruiting others into the program and collecting commissions on them. Again, you do not have to choose to step into leadership but that track is there and paid accordingly if you do decide to do so. I have team mates Anti-MLM that make full time salaries that would make people’s jaw drop concentrating on sales ALONE. The product and training is there, it is up to you what you decide to do with the opportunity. As long as you stand behind a product that is trusted, proven, loved, and in demand, you have the perfect ingredients to establishing a reputable business that doesn’t have to push something down people’s throats, so to speak.