Everything you need to know about MLM pyramid scheme

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What are MLM Businesses and Pyramid Schemes?

Multi-level marketing business and pyramid schemes are business opportunities that consist of selling products to people that are around you and recruiting them to do the same. If you are considering applying yourself to such a business then this article is meant just for you. Some MLMs are illegal. Most legitimate MLM pyramid scheme are not that beneficial and you make little to no money even after immense spending time and effort. Sometimes people do not realise that they are part of illegal pyramid schemes and end up losing all the money they had invested. In some cases, it even leads to debt. 

Here are some things that you should look at before investing in an MLM business

MLMs explained

Multi-level marketing firms sell their products on an individual person- to- person basis. If you are an MLM salesperson, your position is generally that of a participant or an independent distributor. Your job description involves selling directly from your home or online. You can either sell products to customers that are not involved in the scheme or you can recruit other participants and earn commissions on their sales. The people that you recruit and the people that your recruits recruit forms a network. A legitimate business will pay you on the basis of your sales without having to recruit other people.

What are Pyramid Schemes and How to Spot Them?

Pyramid schemes are basically illegitimate and illegal MLM businesses. They are basically scams meant to rob people of their investments. You should learn to distinguish between a business and a scam before embarking on any such venture. A major characteristic of these scams is that they appear quite legitimate. So it requires a critical eye to discern between a legitimate business and a scam. A rule of thumb that you should keep in mind is that if something appears too good to be true then it probably is. A company that is making you see all these unrealistic visions about getting rich quick is probably a pyramid scheme. Constant recruitment is yet another sign of a pyramid scheme. 

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