Multilevel Marketing: What It Is and What It Isn't

  Written by Art Basmajian on Apr 11, 2009 1:23 am

Read More: CPM  |  Marketing

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Multilevel Marketing: Down and Dirty

Anyone would say that "multilevel marketing" is not a good place to put your money into. That's probably because along with its popularity, a bad connotation surrounds it. There are some whose experience didn't quite meet their expectations, leading them to think that they've been scammed. Although the whole thing is legal, most people would rather say no to mlm marketing than be a part of something they might later regret, like being in a pyramid scam, for instance.

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So what is the difference between mlm marketing and pyramiding scams? The former is a lawful business, while the latter is just simply a scam that is unethical. Multilevel marketing is a type of business model that cuts out the middleman to decrease the overhead costs. This means that the end consumer won't be paying the bills for the store's rent, labor, electricity, and others. Pyramiding schemes are illegal ways of getting people's honest money with an empty promise of larger rewards, and in reality, this is just a transfer of money to the "upline" (this will be explained later).

You know what they say, if it's too good to be true...

If it's too good to be true, then it's more than likely that it is a pyramid scam. Just like a wolf in sheep's clothing, pyramiding schemes mask themselves as legitimate mlm marketing businesses. Pyramiding schemes uses the same techniques and also the same processes in building a network.

In both business models, you have to sell some kind of product, you will create a "marketing network", you will either be "sponsored" by your "upline", or you will sponsor a "downline" with the idea that the "upline" gets commissions from the sales of the "downline." The first thing that would tell you that you are in a legitimate mlm marketing business is that the commissions from your "downline" are just a plus, but the bulk of your profits come from YOUR sales and YOUR hard work.

To Enter the Market

Multilevel marketing is a relatively easy business to get into, sometimes for investments as low as $29, which is in no way saying that it's an easy business to thrive in. On the plus side of the equation, it is a very flexible business environment. You can stay at home all day in your jammies and still make a decent enough living. Formal education isn't even necessary, but a bit of techno savvy does help.

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