How you can distinguish Between Pyramid Scheme & (MLM) Multi Level Marketing
Hello friends I
am junaid and I am writing mine experience in the “Network Marketing” business.
I hope it will help you people to have an idea between fraud and a genuine way of making business.
As the world is growing so fast and the ways of doing business is
changing so fast. In these days when is discussed on MLM or down line people
automatically associate a wrong concept and most of the people assume that
these word denote a “pyramid scheme” and move away from it assuming that it is
a fraud scam. However, it is not true and it is the way of analyzing any
business plan. If you are good at investigating then you may find the some of
the genuine “network marketing” based companies in the world. Main difference
between a fraud “pyramid scheme” and genuine “MLM” is that pyramid scheme will
ask for a starting fee (normally thousands of dollars) to start earning but a
good company will ask no money or very less amount to offer you business. Here I
will try my best to explain how to make a difference between “pyramid scam” and
“network marketing business”. First let’s have a basic knowledge about both
methods.
If
you have noticed in the picture then you will observe that in an illegal method
the way of earning is “signing up new members” and no product exists. Sometimes
product exists in the illegal method but that product is not manufactures by
them it will be purchased by other companies. On the other hand in “network
marketing business” you will be given products to sale. Use, suggest etc and
the money will come by sale of the product.
Let’s get back to the track and know about the pyramid scheme. Pyramid
schemes are usually non-sustainable because the main reason is the exchange the
money from new member to old member. Pyramid scheme is working good for those
who have joined at first level but no way to earn money for those who have
joined late. So as much time as pyramid scam remains, it becomes weaker and
weaker.
In
the pyramid scheme money belongs to the top level. In the above picture money
is on the top and failure is in the bottom. It’s like a king’s kingdom all the
kingdoms works for a king but in war bottom level people sacrifice to save the
kingdom.
First
of all you need to understand that what is MLM (multi level marketing) or
network marketing. Although Multi-level marketing companies follow a
similar concept to a pyramid scheme but still there is difference between both
of these.
1> A major difference is
that people in MLM can earn money at any level and they have not the only
condition of signing-up new members to earn but they can earn commission from
the sale, purchase, retail etc.
2> A good fact is that in
MLM or network marketing the earning is depended on the person. That means by
doing work hard or doing work smartly a person can earn more than the person
who has signed him, suggested, referred.
3> In MLM a person can
win if he/she has ability to help the down line people. Infact the win of down
line is the win of top level.
The
structure of MLM is almost like the pyramid scam but MLM is a verified
business, approved by government or a state.
Now
we should look at the working of the MLM. To know the working of MLM we can
take example of a company producing let’s suppose soup. The company needs to
increase the sale so it will go to an celebrity to make an advertise for them. It
may cost them thousands of dollars but on the other side another company’s need
is same but that company will use
network marketing to increase the sale. And rather than spending thousands of
dollars on advertisement it will be given to its own employee as a bonus. The each
employee will do his best to do more sales and get the bonus. So that’s the
core concept of MLM companies. Just like a common man if a person does the MLM
business gets reward. If does with proper management gets higher bonuses and if
leaves the down line will keep working and getting the reward.
HOW
TO RECOGNISE THE GENUINE COMPANY
Now
you will need to recognise the genuine company by taking these points in mind
1>
The
genuine company will ask for a little amount to register you as a member or it
will ask no money needed for signing up.
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>>
You
will be shown the business plan and your main source will be coming from the
sales of the products or services offered by company. If someone says you will
have nothing to do but cash will fall from the sky then believe me he is lying
to you.
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>>
You
will sign-up new members according to your need that means not signing-up new
members will not affect your business. No genuine company will ask you to recruit dozens of new members daily.
>>
If
you can’t increase your bounce than your senior then don’t ever think about
joining that company.
>>
Ask
for necessary certificates according to your country and state. Take time and
verify them. Genuine company will never hesitate to show contracts,
certificates etc.
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SSOME POPULAR MLM BASED COMPANIES ARE AS FOLLOW THAT YOU CAN JOIN ACCORDING TO YOUR INTEREST AND AVAILABILITY IN YOUR OWN COUNTRY.
- Amway;
- Avon;
- TIANSHI GROUP OT TIENS
- Herbalife;
- Tupperware;
- Empower Marketing / Moreishi
- The Royale Business Club International, Inc.
- Nu Skin/Pharmanex/Big Planet;
- Primerica
I hope mine little effort will make you able to judge between good and bad. So be a good investigator rather than a blind follower. Your value able feedback will help me to serve you in a better way. thanks
Email; sjahsb@gmail.com
www.facebook.com/honeyshah09
Mind blowing analysis Well done junaid
ReplyDeleteAwesome!
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