Multi-level marketing (MLM), financial pyramid schemes, some people interchange the terms freely, some do not.
The truth is in the eyes of our law makers and governments its often difficult to prove definitively an organization is a financial pyramid scheme. The only people who lose out by this inability to classify are the people who get involved and invest money they potentially can’t afford to lose.
What is a pyramid scheme?
Typically pyramid schemes and MLMs work on the model you can sell a product directly to customers to make money, or you recruit people to sell products and every person you recruit who sells product, you in turn get a small commission from.
To be eligible for the commissions you typically must purchase a pre-defined amount of product every month. Many find themselves in the position they cannot sell enough product direct, and are relying on commission from those they recruited and those their recruiters recruited, and so on.
This is where people end up spending money on product they can’t sell, that sits in their garage. Then the commissions never materialize from those they recruited, leaving people out of pocket and in debt. The supplements game is great for this as the product has a shelf life and you end up with crap your cant sell.
Selling the dream
If someone is trying really hard to sell the dream to you, of why this organization is so great, and how you are going to make your fortune….ask some serious questions:
• What has your commission looked like, with evidence
• How much stock do you currently have sitting around
Many of these organisations are actually banned from making claims on how much you can earn and the wonder nature of their products as its been proven statistically to be untrue.
They will put on big flashy seminars and charge you thousands of dollars for the privilege of going and being part of the revolution!
Be on guard
If someone comes to you and tries to sell this dream be very careful, don’t get stung.
Here is a list of some of the common ones out there:
https://en.wikipedia.org/wiki/List_of_multi-level_marketing_companies