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Is It MLM or PLP?
It amazes me how even today people will still get sucked into a PLP and call it an MLM. You Have to Know the Difference between an MLM or a PLP or you could get scammed.
Multi-Level Marketing is a legal program where people are paid for the legitimate movement of product. This is commonly used by companies who have a new health product that they want to introduce to the market. This is to help the market understand the product and its benefits. Since the beginning of time people have been telling ohter people about the products they have found, whether it was seeds or berries or new eye make-up, or a new way to cook something. Everyt tribe for centureis has had a medicine man who could cure people of dreaded aiments using naturalingredeints and the success of the medicine man was often shared by his clan.
Today our sickness care system, masquerading as a health care system, has many activists to ensure that drugs are known and sort of understood by people who might benefit from them. Just think of all the ads you have seen for Lipitor, Prozac or Vioxx , back in the day, to name a couple. Plus of course all the drug companies have Sales Reps who go out and sell doctors on these products and the doctor then prescribes them to you and sometimes, but very rarely, to me. I have been known to take anti-biotics while swallowing massive amounts of pro-biotics to keep my gut flora healthy so my digestive system keeps working properly.
So a legitimate MLM might have a unique health product. It is usually all natural and the best companies will have patents on the products and lots of peer reviewed articles for their ingredients in the health journals like pubmed.com
The field reps for the company, that is you and me, can now go out and market those products and either sell them retail or encourage other people to join us in the business of marketing this product or service and then the representatives can buy the product or service at wholesale. The key thing is that Product is Moving from the company to an end user.
The critical feature in determining the legitimacy of this program is the product that is being placed into the distribution channel. If it is a product that you might well find on the shelves of a health food store, or some other store, than you are fine.
The problem is the information products or the sham products that are created just to have a network marketing opportunity. That is when you have a PLP
Proper Looking Ponzis are evil programs designed to trap the unwary, and they come in many guises, all of course designed to "look" like legitimate MLM programs, hence the name "proper looking ponzi". The most recent example that I am aware of is Zeek Rewards, which just got shut down this summer, in 2012. Right now all the people involved are just learning that all their hard work and the money they put into ZEEK Rewards is probably gone. This PLP ran for about two years, which is fairly standard.
It is sad but true that the government does not act quickly to shut these scams down and so lots of people get hurt.
How can you protect yourself. First of all ask yourself "does this sound too good to be true?" I see people recommending, and ads saying things like this, "Put $X down once only and get paid for life" If you are only putting in $2 or $7 and it is a one time thing do you really think you are going to be paid for life?
Beware the Gifting scams and the High Yield investment scams but really beware of the PLP's. On a conference call today one guy, named Brian, was talking about being offered a chance to join a supposed MLM program, and all he needed to do was put up $497 . This thing was really flying he was assured and he'd probably get his money back before the end of November, 2012. When he asked what he got for his money his buddy didn't really know but thought it was a website. So Brian asked to talk to his buddy's upline and that guy told Brian not to be a jerk, just get in and start making money.
Needless to say Brian walked away and kept his $497. Hopefully his buddy managed to get his money out, but probably not. Remember It is your money, don't throw it away.
Another sure fire giveaway of a scam is the claim, "You keep 100% of the commissions". First it is telling the authorities, and it should be telling you, that the product being marketed has no value. So why is money changing hands? If this is a loss leader to promote and convince you to buy a more expensive product later on, then this works in Affiliate marketing but not in MLM
One site I would suggest you check if you have any concern is http://www.mlmwatchdog.com/MLM_Watch_list.html They have a pretty good list of the most egregious scams.
PLP or Affiliate Marketing
The companies that are selling information products and promoting themselves as Affiliate marketing programs are usually fine. Their payouts cannot go more than two levels deep and you want to watch for lots of complaints, but if those criteria are met than the Affiliate program is likely fine. The FTC is always prowling to see who might be over promising and under delivering or promising things they are not allowed to promise, and unfortunately the FTC sometimes makes mistakes and can damage legitimate affiliate operations. But when a company is selling information and promoting themselves as a network marketing program or an MLM that is not legitimate.
Use Your Brain
Sorry if that sounds a little harsh but really, if you want a 6 figure or 7 figure or 8 figure business it is going to take some time and the emphasis should be on training and duplicating not recruiting. Think of a franchise. People expect to take years to really learn the business and finally get their money back out of it. So it is with any legitimate business.
I know a lot of the Internet Marketing crowd keep trying to convince us that MLM is just like internet marketing but it is not true. Internet Marketing is a sales business, he who sells the most widgets, and the most expensive widgets wins, period.
We may use internet marketing methods to attract our leads but then it becomes a people business. You need to build a relationship with that person who became a lead and get to know them. Get to know their personality type, get to know their dreams and hopes, get to know what their family is like, what are their personal circumstances and what is their Definite Major Purpose.
Since unlike a franchise, we do not require people to put up $50,000 or $500,000 or more it is harder to get people to stick with their MLM business. But if they get into a legitimate MLM business and the timing is right, and the products are unique and protected, they can easily go on to earn the sort of money that far surpasses anything that any franchisee can earn. But you have to keep them in the business long enough for them to learn the skills and to build their business. This is why their Definite Major Purpose is so important. But that's another story for another day