Have you seen the term “MLM Scheme” and been wondering exactly what it is? This article aims to clear up the confusion about this term and others associated with network marketing.
Simply put, network marketing is a model for marketing and selling products and services. A company which uses the network marketing model will not hire a staff of human resources or salespeople. Instead, they will rely on you, as a consumer, to spread the word and sell their products. They will also rely on you to recruit other members to help you sell the product. You get paid on the amount of products/services you sell and the number of people you can recruit into helping you with sales and recruitment.
Network Marketing can also be referred to as Multi-Level Marketing or MLM. Although each company differs in the products/services offered, the compensation plan, the training and experience, Network Marketing, Multi-Level Marketing and MLM businesses are all legal businesses that help millions of people around the world. Some of you may be surprised to learn that companies like Shaklee, Avon and Mary Kay are all MLMs.
Network Marketing companies are often confused with Ponzi Schemes. These are illegal set-ups where members get paid by recruiting other members but there are really no products or services involved. One reason for the confusion is that Ponzi schemes were actually created by previously unsuccessful network marketers who weren’t able to make money by following the rules. So, they made their own rules. Although Ponzi schemes were a little more common in the past, the FTC clamps down on them very quickly these days so, if they do spring up, they are usually shut down before they can do much damage. Because of Ponzi schemes, Network Marketing also undergoes VERY strict control by the FTC to insure that an MLM is not or will not become a Ponzi Scheme.
So, the truth is . . .an “MLM” scheme does not exist. There are MLM companies and MLM businesses. And there are Ponzi schemes.
As mentioned previously, network marketing companies are helping thousands of people around the world to start their own businesses from home. These new business owners include people who were laid off from their jobs, those who lost their retirement funds and need a new source of income, moms who have decided that they want to spend more time with their kids, etc. And most network marketers enter into the business because the products that they now sell had significant positives impact on their lives.
If you are interested in becoming involved in network marketing, you have an enormous choice of solid, stable and exciting options. You can join MLMs that deal with travel, skin care, health products, green products, business development products, and many, many more.
The MLM scheme does not exist, but if you think that a comapany you are looking at may be a Ponzi scheme, make sure to check with the FTC.
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