The Truth About MLM Scams

What’s the first thing you hear when you mention to anyone you're considering an MLM business?

“Oh, one of those MLM scams, huh?”

Your friend or family member just deflated your bubble before you even got to tell them about it!

Don’t worry, it’s a common reaction and there are ways to combat it. Here’s a little history to help you.

The Truth on MLM

Most Multi-Level Marketing opportunites have been incorrectly referred to in the past as scams, pyramid schemes and fraudulent businesses mostly because people don’t understand which ones are genuine and which are run by people out to make a quick buck.

Some even think that those chain letters received in the mail asking to sell books-recipes-hand towels-whatever, are MLM businesses.

Not so!

An MLM business opportunity is not a pyramid scheme. These schemes tend to have one person at the top, a couple below them, a few more below them and a whole bunch more at the bottom.

The people at the bottom are paying more than what the product is worth, so that those above them can make the 25%-40% commission and unless they can make a huge number of sales of an overpriced product, they will never make any money.

In fact, they will probably lose a lot of money and that’s why pyramid schemes are illegal – they unlawfully mark up a product and advertise a large discount to dupe people into buying quantities that they are never going to be able to sell.

Genuine MLMs Are On The Rise

MLMs are making a comeback because savvy business people have found a way to make them work legally where everyone can make money. And with the help of the internet, you can avoid talking to people to some extent – especially if you are one of those painfully shy people.

MLMs are also coming more in to the mainstream because:

• Almost 80% of US homes are wired to the internet. You can reach almost everyone with a few clicks of your mouse.

• Technology has created some awesome products and MLMs always need awesome products to sell. The two have met and married and several MLM businesses have skyrocketed.

• The job market isn’t strong, dependable or even flexible. MLMs offer all of the above to those who work at them.

MLM Fraud

Even when you have found the best sounding MLM for you, you still need to be cautious before agreeing to, signing anything or dishing out money. On rare occasions, there are still MLM frauds that exist.

When they ask for a lot of money up front and don’t look to deliver any product, support or training, be wary. Don’t be afraid to ask questions!

MLM scams are rare these days, but they can still exist so just as you would do with everything in your life – from large purchases to hiring a babysitter – investigate, ask questions and look online for references.

Also consider calling the BBB (Better Business Bureau) and make sure they don’t have any claims against them.

Once you’ve done your homework and everything checks out, feel confident that your MLM will soon be growing and earning you money.

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