SO WHAT IS THIS CONFUSION ABOUT PYRAMIDS?
ISN'T MLM A PYRAMID SCHEME?
In 1979 the US Federal Trade Commission specifically held that Amway was not a pyramid. To quote Amway: "The income generating event in a pyramid is the mere act of sponsoring. The sale of product is either non-existent or incidental in the pyramid scheme. In fact, the whole pyramid operation is set up specifically to defraud participants because it does not build sound selling businesses. They are usually promoted as "investment opportunities" or "marketing plans", which they are not. Typically, a large initial cash investment is required, large inventories must be purchased (which cannot be returned) and profits are made from selling distributorships rather than products. Pyramids collapse when there are no more people who can be lured into them to sell more distributorships."
The proper test is "can the last person into the business make money?" The answer is Yes if the last person in can buy the product and resell it and make a profit.
YOU CAN'T MAKE MONEY FROM RECRUITING OTHERS TO THE BUSINESS!
The law is clear. Legitimate Multi-level or Network Marketing is a viable system of distribution and sales where independent contractors earn commissions on the sales of products from a manufacturer or marketer to the end consumer. The one and only way to earn money in this business is from the sales of products. Being paid for the mere act of recruiting is a scam, no matter what shape or form it's packaged in.
Here's a simple way for you to test any MLM/Network Marketing opportunity. If someone earns a commission from the registration fee you would pay to join the com-pany as a distributor, more than likely it's illegal! People are being compensated on recruiting you as a member. They should only earn commissions on the products or services you purchase and distribute.
MULTI LEVEL MARKETING:
Is a Legal, recognized form of marketing.
1. Companies must fulfil strictly enforced requirements.
2. Emphasis is on retail sales and consumption of product,
enforced through minimum retail sales or turnover
requirements to receive bonuses.
3. No financial benefit is derived from simply getting people to join
4. here MUST be a full money back guarantee on all products
sold to consumers.
5. Companies MUST pay a refunds for stock returned by
distributors who wish to terminate their agency.
6. Companies MUST discourage distributors from holding a large
stock inventory. Therefore no capital risk.
7. All distributors MUST have an equal opportunity to reach the
top levels in the marketing plan.
8. Company MUST accept full legal liability for its products.
9. There is a minimal up-front investment. Usually less than
10. Successful companies provide ongoing training and
1. Emphasis is on sponsoring new distributors, not on selling
2. No guarantees, no money back.
3. Customers are not sought. Profit comes from recruiting.
4. No return of stock or refund of joining fees.
5. Encourage new distributors to buy in BIG! Capital at risk.
6. Only one person can ever be at the top. The further downline
you join the business , the harder it is to succeed.
7. Company accepts no legal liability for products.
8. Large up-front investment.
9. No back up or training,
10. Success comes from shifting the risk to other people.
SO WHAT ARE WE REALLY LOOKING FOR IN MLM?
The simple answer is