How can you tell the difference between a valid MLM opportunity and one of those network marketing swindles or ponzi scams everybody has warned you about?
What is the difference that makes all of the difference? Is there a fast method to comb the wheat from the chaff, chew the meat and spit out the bones, and shield you and your pocketbook from being taken for a ride? Let's dig a little deeper into the topic handy and find.
Network Marketing Scams Defined
MLM compensation plans, a. K. A "network" or "matrix" marketing, are a way of selling products or services thru a network of independent contractor, distributors or direct sellers. Amway is one of the biggest, most well-known network marketing firms. They have millions of active distributors worldwide and produce annual sales in the billions.
Traditionally, Amway has fallen victim to the "network marketing scams" label a considerable number of times. But in each case, including a 1979 FTC investigation in the U. S. , a 1997 Belgian court case and a 2008 court judgement in Britain, each fraudulent claim was dismissed.
Briefly the FTC found Amway not guilty of being an illegal pyramid operation or just another one of those network marketing stings because "distributors aren't paid to recruit people and must sell products to get bonus checks, and the company was committed to purchasing back its distributors ' excess inventory.
Network Marketing Scams Exposed
In a legit network marketing opportunity, commissions are earned only on sales of the corporation's products or services. Commissions can be paid on both retail and wholesale sales. But no money could be earned from hiring other people as a distributor. To paraphrase, you cannot make a dime from sign up fees. If a company pays out an indicator up charge, probabilities are it'll fall into that dreaded network marketing scams class as it then becomes an illegal pyramid or ponzi scheme.
Protecting Yourself Against Network Marketing Swindles
Every year there are many hundreds of new network marketing firms launched around the world. Like most little businesses, many of them will not survive a complete year in business. Others will drop by the end of year two and very few will still be around by the end of year five.
The best way to safeguard yourself against falling prey to one of those network marketing scams is to position yourself with a definite company that has stood the test of time and legal inspection. For example, Nexera.com hosts an annual list of the top twenty-five MLM corporations that fall into this criteria :
* The company supply a multi-level compensation plan. * The company must be in business for at least 10 years. * The company must have a Google Page Rank of 1. * The company must have an Alexa Rank. * The company must show up in Google Trends.
Of course, a lot of this criteria has nothing in the slightest to do with the legality of any actual company or its marketing model, but if you align yourself with a stable company that has been around more than ten years and has a well known web presence, you significantly decrease the chance of falling in yet one more one of those "network marketing scams".
What is the difference that makes all of the difference? Is there a fast method to comb the wheat from the chaff, chew the meat and spit out the bones, and shield you and your pocketbook from being taken for a ride? Let's dig a little deeper into the topic handy and find.
Network Marketing Scams Defined
MLM compensation plans, a. K. A "network" or "matrix" marketing, are a way of selling products or services thru a network of independent contractor, distributors or direct sellers. Amway is one of the biggest, most well-known network marketing firms. They have millions of active distributors worldwide and produce annual sales in the billions.
Traditionally, Amway has fallen victim to the "network marketing scams" label a considerable number of times. But in each case, including a 1979 FTC investigation in the U. S. , a 1997 Belgian court case and a 2008 court judgement in Britain, each fraudulent claim was dismissed.
Briefly the FTC found Amway not guilty of being an illegal pyramid operation or just another one of those network marketing stings because "distributors aren't paid to recruit people and must sell products to get bonus checks, and the company was committed to purchasing back its distributors ' excess inventory.
Network Marketing Scams Exposed
In a legit network marketing opportunity, commissions are earned only on sales of the corporation's products or services. Commissions can be paid on both retail and wholesale sales. But no money could be earned from hiring other people as a distributor. To paraphrase, you cannot make a dime from sign up fees. If a company pays out an indicator up charge, probabilities are it'll fall into that dreaded network marketing scams class as it then becomes an illegal pyramid or ponzi scheme.
Protecting Yourself Against Network Marketing Swindles
Every year there are many hundreds of new network marketing firms launched around the world. Like most little businesses, many of them will not survive a complete year in business. Others will drop by the end of year two and very few will still be around by the end of year five.
The best way to safeguard yourself against falling prey to one of those network marketing scams is to position yourself with a definite company that has stood the test of time and legal inspection. For example, Nexera.com hosts an annual list of the top twenty-five MLM corporations that fall into this criteria :
* The company supply a multi-level compensation plan. * The company must be in business for at least 10 years. * The company must have a Google Page Rank of 1. * The company must have an Alexa Rank. * The company must show up in Google Trends.
Of course, a lot of this criteria has nothing in the slightest to do with the legality of any actual company or its marketing model, but if you align yourself with a stable company that has been around more than ten years and has a well known web presence, you significantly decrease the chance of falling in yet one more one of those "network marketing scams".
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