MLMs vs Pyramid Schemes

Are you considering a network-marketing (or MLM) program and want to avoid pyramid schemes? Or are you gathering more information before you decide whether or not you want to pursue network marketing?

Either way, avoid any pyramids by knowing:

1) MLM business programs do not require large start up costs. In contrast, pyramids often do. So, if a requirement of any program is for you to invest a lot of money to get started, be wary.

2) MLM companies no longer require their distributors to carry inventory. Most MLM companies provide their distributors a web site from which people can order product. If you’re being asked to buy and store a lot of inventory, it may be a pyramid.

3) MLM companies have a market for their products. If there does not seem to be consumer demand for the company’s products, it’s probably a pyramid. Avoid the program.

4) MLM companies have a strong focus on their products and getting those products in the hands of consumers. Pyramids will focus on fast profits by getting other people signed-up, with no regard to whether these people use the product or service.

5) Pyramid schemes will be designed such that a person makes more money recruiting new distributors versus by the volume of product sold. MLM programs are all volume driven.

6) MLM companies do not provide compensation for recruiting new people. If a commission is offered for recruiting a new distributor, it's probably a pyramid.

Take a few minutes to run any program that you’re considering through the above 6 points. There are many legitimate MLM programs available today. There is at least one out there that is ideal for you. So, there is no reason to settle for any type of scheme.

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