If you are looking to take your personal finances into your own hands and start your own residual income business, there is one very important aspect you need to take into consideration first; is this new opportunity a legitimate and legal home business such as Network Marketing/MLM or is it a Pyramid Scheme.
In the next paragraphs, you will learn exactly what the difference is between a Network Marketing business and a Pyramid Scheme. You absolutely have to know, without a doubt, that the business you are about to embark on is something that will bring positives into your life.
A pyramid scheme is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public. Therefore, Pyramid Schemes are a form of fraud. Basically, if it has no product outside of a “business”, there is a good chance the opportunity is not legitimate.
A successful pyramid scheme combines a phony yet apparently credible business with a simple to understand yet complicated money making formula which is used for profit. The essential idea is that a “con artist” Mr. X, makes only one payment. To start generating income, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of the “introduction fees” from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the “business” expands. This is not the residual form of income that comes with Network Marketing as it is only one time payments.
Again, these “businesses” rarely involve sales of real products or services to which a monetary value might be easily attached. However, sometimes the “payment” itself may be a non-cash valuable. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information. The flaw is that there is no end benefit, such as residual income. The money simply travels up the chain. Only the originator (sometimes called the “pharaoh”) and a very few at the top levels of the pyramid make significant amounts of money. The amounts dwindle steeply down the pyramid slopes. Individuals at the bottom of the pyramid (those who subscribed to the plan, but were not able to recruit any followers themselves) end up with a deficit.
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they bring into the business, creating a downline of distributors and a hierarchy of multiple levels of compensation. Other terms for MLM include network marketing, direct selling, and referral marketing.
Network marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Life force International, Mary Kay Cosmetics and Tupperware, fall under the network marketing umbrella.
Network marketing programs feature a low upfront investment, usually only a few hundred dollars for the purchase of a product sample kit or the product(s) itself and the opportunity to sell a product line directly to friend, family and other personal contacts. Most network marketing programs also ask participants to add other sales representatives to their teams. The recruits make up a rep’s “downline,” and their sales generate income for those above them in the program.
Network marketing is a legitimate business, based on a Supreme Court ruling in 1979. It’s based on providing people with real, and usually high quality products they need and want at a fair price. While some people do make a lot of money through network marketing, their financial benefit is always the result of their own dedicated efforts in building an organization that sells real products and services.
There are a few tools that you can use to ensure that the company you are looking at is legitimate. One is the Better Business Bureau and the other is the Direct Selling Association. Plug the company into these databases and see; 1) if they exist, 2) what their status is, 3) what kind of reviews do they have.
Network Marketing is a wonderful way to generate an extra, full time, or rich income, and will be one of the best decisions you have ever made. BUT, first, ensure you are with the right company. That is the “lynch pin” decision between success and failure.
If you would like to learn about one of the best Network Marketing/MLM companies in the industry, look no further than Life Force International!