Multi-Level Marketing

How it is Supposed to Work and The Reality

Okay, multi-level marketing (MLM) falls into a separate category because they'll disguise themselves with other ads. Some will tell you straight out that they are MLMs others claim they are not MLMs.

You will only discover the truth after you read the fine details. Although some people will tell you that multi-level marketing (MLM) are complete scams, the concept behind it is legitimate. Multi-level marketing is a system of selling in which you sign up other people to assist you, and they, in turn, recruit others to help them. Sounds like a pyramid scheme, right?

Well, in order for it to be considered a pyramid "scheme" the offer needs contain these three elements:

  1. A lottery prize: expectation of monetary or other gain from participation in the pyramid,
  2. Chance: the monetary return you may receive from your participation is entirely up to chance, that is, dependent on the efforts of those below you in the pyramid,
  3. Consideration: the fee you pay to become a distributor.

Frequently, the entrance fee into the pyramid is very high. In many cases, the money spent for such an entrance fee can often be considered lost the moment you pay. To protect yourself against falling victim to a multi-level marketing scheme, note whether the basis of the promotion is the sale of a product at the retail level, as opposed to an emphasis on recruiting more and more distributors to help you increase your income.


More Information:

Still not sure they are scams? Check out these links for more information. Note, these are not links to "legitimate" companies. These are links to articles by the BBB, FTC and new organizations exposing the frauds.

Multi-Level Marketing

Work-at-Home Schemes

FTC Names Its Dirty Dozen:12 Scams Most Likely to Arrive Via Bulk Email

USPS's Work-at-Home Schemes

Work At Home -- Find Out How to Separate the Scams From the Legitimate

Work-at-Home Schemes: Modern Twist to Old Scams

Work-At-Home-Schemes Now Peddled On-Line

Better Business Bureau Warns Consumers of Three Work-at-Home Companies Based in State of Oregon