There are opportunities for self-motivated individuals with a knack for sales to make more money.One’s primary source of income can be found working for a multi-level marketing company, also known as direct sales and network marketing.It is easy to be deceived by pyramid schemes.Pyramid schemes have grand promises, huge sums of cash, and minimal work that are very tempting.Knowing the difference between legal multi-level marketing and illegal pyramid schemes can help you make the right decision.
Step 1: The company was founded.
Most of the top 25 MLMs have been around for more than 20 years.If you treat a company that has been around for less than 10 years with caution, it could be a problem.Since pyramid schemes are illegal, the top executives close their doors as soon as they make a decent profit.
Step 2: You can do a web search of the company.
The internet makes it easy to find impartial sources with opinions about companies.To get people’s opinions, add the words’scam’,’reputation’ or’review’.You should find positive and negative reviews, even if pyramid schemes hire internet marketers to make false reviews.The Better Business Bureau is a good place to start.A nonprofit that processes complaints against businesses resolves questions of illegal or unethical behavior.The Federal Trade Commission website has information on companies that have been fined or pursued for illegal business practices.
Step 3: Look at the structure of the company.
The large pool of self-motivated underlings may make them seem similar to schemes on the surface.This system is used as a substitution for a larger advertising budget.The work is done by people on the ground.It is probably a pyramid scheme if the company emphasizes the work of the executives in recruiting new members in their ‘downline’ over the role the salespeople play.pyramid schemes use the term “downline” to refer to those who work under them.It can be hard to know if a salesperson is going to be promoted to a supervisor or not.
Step 4: Take a look at the compensation.
New members of the network make their money off sales.They want to keep and recruit good salespeople.Pyramid schemes will tell you how much money you can make after you get promoted.If you want concrete profit margins for salespeople, then push them to give you actual yearly averages of profit for entry-level workers.The MLM strategy is to establish a large population of salespeople to distribute the project and increase their sales force.The commission on the sale of the product is paid to the promoter.
Step 5: Find out what their policy is.
To find out if a pyramid scheme is a scam, you have to dig a little deeper.It is possible to find out if you will get a full refund for unused products.Pyramid schemes rely on people buying packages of useless products in order to find out that they are unsellable.People point to the ‘no returns’ policy in the contract when they contact the company.
Step 6: How do you get promoted?
People move up in pyramid schemes based on how many recruits they sign.People are promoted based on their sales numbers.It’s probably a pyramid scheme if you can promote yourself without an official appointment.
Step 7: Look at the business model.
It should be simple.People outside the company are recruited to buy large quantities of merchandise from the salespeople.Pyramid schemes rely on promises to cover up the fact that they don’t have a legitimate business model.Their model wouldn’t get as many people to buy in.Business models are easy to understand.They might have a successful line of products.The consumer is often charged more for products that are inexpensive to produce.This method will show you how the business makes money.Business models for pyramid schemes are hard to understand.They often promise to change their industry or introduce a miracle product.They emphasize the process of recruitment and promotion over the actual product.Don’t get lured into the job until you understand how the company makes money.
Step 8: Do research into what they sell.
This is the biggest mistake with pyramid schemes.They don’t mention what product you’d be selling, but they talk about making money off the downline.The products they sell are often ridiculous and unsellable, picked for the lure of getting rich selling them rather than actually using them.There are useful everyday products that have been sold door-to-door and on the internet for decades.’miracle cures’, unfamiliar health products at seemingly high prices, or low-cost, high-yield investment opportunities are some examples of fake pyramid scheme products.
Step 9: Find out how employees make money.
Pyramid schemes often offer low profit margin products.New members will make the real money.These details may not be apparent to someone outside the company, so you need to use other criteria to make a decision.There is a chance that the product is not a dead gift.There was a pyramid scheme that sold inexpensive DVDs.This appears to be a legitimate product.How much profit can you hope to make?It may be difficult to tell.Look for signs of a pyramid scheme if there is a high reward for recruiting members.
Step 10: The cash flow should be looked at.
Is the company sustainable?Businesses that are stable depend on a cycle of production, marketing, and sales.Money comes in.Money coming from inside the business is not self-sustainable.
Step 11: What do you get from your contribution?
It may be a good idea to get a briefcase of popular cosmetics.It’s probably a pyramid scheme if you only get the chance to sign other people to work for you.It needs to be a viable business opportunity for everyone.