If you’re reading this article, then you’ve probably heard some bad things said about mlm Multi-Level Marketing.
Top of the list of questions people have is mlm a pyramid scheme?
Before I dive into that, let’s take a step back and look at the world around us.
Do you currently work in a pyramid structure?
As you will see in the diagram most companies in the world have the CEO at the top, who is often also the founder of the company.
Below the CEO there is the vice president, below him or her, management, and below them the employees.
Who makes the most money? The CEO of course, and then the vice president, and so it flows down to the employees.
There are Pyramid Systems in Everyday life …
If you look around in everyday life you see people who have more money than you. You see others who have a lot less.
In a lot of cases there is extreme inequality and poverty. It’s not nice but it’s a fact of life
Some people say humans are the highest form of life on this planet. I look at some people and look how they act, and tend to disagree ..
Back to the question – Is MLM a pyramid scheme?
The short answer is a big NO.
A pyramid scheme is in fact illegal.
In the context of a mlm company, a pyramid scheme is one in which there are no actual products to sell.
All the income is generated by recruiting new people into the company, with the guy at the top making the most money.
Then as the pyramid grows it gets more difficult for new people to be signed up. As a result, the pyramid collapses and people lose their money
How to avoid a pyramid scheme
There are unscrupulous companies out there that are a pyramid scheme. if you suspect the company you’re interested is one, then you must do your due diligence and check them out thoroughly first.
Within a legitimate MLM Network Marketing company you will find a clearly laid out product portfolio which you as a potential distributor can sell. You will also find the opportunity to recruit other people to also sell the products which you will get a percentage of.
I hope you can see the difference.
It’s true that an mlm company will contain a pyramid structure, but it is not the same as a pyramid scheme. As I should you previously, such pyramid structures are all around us, and maybe you’re in one now where you want to escape from a company because of a horrible line manager above you.
I hope this article has answered your concerns of is mlm a pyramid scheme.
I am aware of the pitfalls in this industry and conduct my own research when a new opportunity comes my way. Here is an example.
What is your experience of working in an mlm business? Would you recommend it to your best friend? Please comment below.
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