Multi Level Marketing (MLM)
"Let me tell you about an incredible ground-level business opportunity," and you are invited to a house or to lunch for "a discussion." Funny enough, you feel sick in your gut that there is some hidden agenda or deception. "Probably a multi-level marketing (MLM) organization," you think. Suppose it is? Should you trust your instincts? Is there anything wrong with MLM?
Ah! This is the latest Internet marketing storm which promises you overnight riches almost without doing anything than registering in one of the luring MLM Wesites at a one-time fee, and then just go on building a ‘downline’ of either actual purchasers of the product or service the site sells, or, what is more enticing, simply a chain of distributors who should in turn be encouraged to build their own ‘downlines’ in the same fashion – a typical ‘pyramid’ structure!
And what you are promised - and what you in turn promise to your ‘downline’ – is a percentage of the commission earning of each ‘downline’ member from actual sale of the product or service in question.
The catch is: Ultimately all people “upline” share the profits generated by the “downlines” below them, if, and only if, one or more of those downline guys manage to make some actual sales. In the process, the the ‘top’ guys corner the bulk of the cake from all ‘downline’ sales – but even these guys at the top may nor be making a decent living unless the sales at the bottom are comfortable enough
A pyramid scheme is a fraudulent system of making money which requires an endless stream of recruits for success. Recruits (a) give money to recruiters and (b) enlist fresh recruits to give them money. A pyramid scheme is called a pyramid scheme because of the shape of a pyramid: a three dimensional triangle. If a pyramid were started by a human being at the top with just 10 people beneath him, and 100 beneath them, and 1000 beneath them, etc., the pyramid would involve everyone on earth in just ten layers of people with one con man on top. The human pyramid would be about 60 feet high and the bottom layer would have more than 4.5 billion people!
In very short order, 10 recruiting 10 and so on would reach 10 billion, well in excess of the earth's population. If the entire population of earth were 5 billion and we all got involved in a pyramid scheme, the bottom layer would consist of about 90 percent of the planet, i.e., about 4.5 billion people. Thus, for 500 million people to be WINNERS, 4.5 billion must be LOSERS.
Plans that promise profits mainly for recruiting new members are illegal pyramid schemes. In legitimate multilevel marketing plans, profits come primarily from selling goods and services to consumers. New recruits give money to current members with the promise that they will receive money from future recruits.
All pyramids are doomed to collapse. That’s because it’s impossible to keep on getting fresh recruits who will pay to participate. Legitimate multilevel marketing plans only succeed if they offer products or services that customers want. All successful businesses depend on repeat sales. If there isn’t constant demand for the products or services, the business will fail.
Sales to other distributors don’t count. Legitimate multilevel marketing plans aren’t based on sales to distributors. Profits should come from sales that you and any distributors under you make to the end-users.
Be wary of big earnings claims. No one can guarantee how much you’ll make. That depends on how hard you work and whether consumers like your products or services.
The more frightening sophistication in this field in recent times is the lure of the promoter promising to build your downline himself, or offering a brand new website to use for placing necessary ad links yourself, as soon as you ‘buy yourself’ into their Scheme for a one-time price! This is a sure sign that it is a scam. If the product is worth a darn, the company will make its money selling the product. No program that requires you to buy into the program is real, meaning that all are scams.
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