Why MLM Is Not A Scam

Wednesday, May 5th, 2010 at 12:13 am

Multi Level Marketing or MLM utilizes a different business model than old-fashioned businesses. In a traditional business, your goal is to just sell your products or services. In MLM, your goal is still to sell your products and services, but you form a network of distributors to help you do that. Now this scenario looks similar to a manufacturer having wholesalers and retailers distributing their products, but the difference here is that in MLM, you don’t have to continue handling the products to get paid. Once your network is set up, you get paid on your network’s activity, normally referred to as residual income. In MLM you are able to leverage your time, effort and skills.

Another factor that makes MLM so untraditional is the cost involved in starting your own business. Typically you need capital to get started in a traditional business. The reason for this is that you’re not just getting another job, you’re starting your own business. Businesses cost money, jobs don’t. However, in MLM there is hardly any cost to get started. Actually, many MLM companies nowadays will just want you to buy the products and give you the business for free. This is a BIG benefit of getting started with an MLM business, but it can also be a cause for people not realizing that MLM is a real business. When new people get started in an MLM venture and they don’t have to pay anything for the business, they don’t think of it as a real business. They start treating it like a get-rich-quick scheme, like a quick way of making their dreams come true or getting out of financial troubles.

When people start treating their MLM business like a get-rich-quick scheme, they rarely succeed and then start blaming their MLM company for their failure and start calling it a scam (saying stuff like “I joined that program, but I didn’t make a dime from it… it was a scam!), because according to their expectations it was supposed to make them rich quick. In reality, MLM was never meant to be a get-rich-quick scheme.

Of course, just like any other business or venture, there are characters out there who will try to sell you their make-money-fast schemes disguised as MLM businesses, take your money and disappear. These scammers do not represent the real MLM industry. Just like you have scammers in the stock market or real estate, etc.

MLM scams can be avoided by using good old simple common sense. Ask these objective common sense questions when evaluating an MLM business:

1. Does this MLM opportunity make real business sense? (just because it’s MLM, it doesn’t mean that it does not have to make business sense)

2. Are the products or services competitively priced? Would I buy the product even if there were no MLM opportunity involved?

3. Are they claiming to pay me for doing nothing? (This is one of the worst ones; you can kiss your money goodbye when you get involved in one of these! Ask yourself this… “If they are going to pay me for being a couch potato, what do they need me for???”)

4. Are they promising to pay more money than they are collecting?

5. Are they charging you sign-up fees or annual fees? (It makes no sense to pay a company to sell THEIR products)

Just remember, a legitimate MLM company will talk about their products first and then about their pay plan, and NOT the other way round.

MLM is a wonderful business to be in. It’s simple, it’s inexpensive and it can work for just about anyone. Just make sure that you do your home work, and just use basic common sense. Avoid acting out of desperation and greed. This will ensure that you won’t be getting into anything that might be a scam.

No matter what you do, don’t let the fear of getting scammed stop you from doing a business that can truly change your life.

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Aziz Jangbar is an Internet and Network Marketer with a real passion for MLM and Home Business. He has successfully built growing downlines and helped many people achieve financial freedom. To learn how you can benefit from his efforts, visit: http://www.GBGMLMopportunity.com

Source: http://www.submityourarticle.com

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