Weeding Out The MLM Marketing Scams Before Investing
Bogus companies and imbalanced reporting have given mlm marketing opportunities a bad rap. This often means that valid and viable business options get lost in a sea of misinformation. By understanding how to recognize the scam in a bogus opportunity you can learn to choose your business endeavors without sacrificing unnecessary money.
Multi-level marketing is often referred to as network or matrix marketing because of the skill in building marketing relationships that is necessary for success. These companies typically revolve around the sales distribution of products or services. Commission is first earned on the distribution of sales. In many companies commissions are also earned by recruiting new distributors. Commissions are also earned on the sales of distributors that were recruited by you. Recruitment is often done based upon these tri-fold profits rather than the value of the product of service.
This particular brand of network marketing can also be called pyramid marketing as it relies upon being at the top, with several levels of recruiters beneath, help generate your income. When the sign up of new recruits becomes more important than the service or product that is marketed, many see this as a sign of fraudulent advertising. This is because salespeople are often drawn in based upon the value of the goods for sale, when in fact, recruiting new salespeople is of far greater importance.
Many times companies such as these require exorbitant monthly fees to remain an agent or distributor for the company. This can result in having to sell distribution positions to numerous people under the guise of promoting a worthy product in order to meet a monthly quota. This can be a disconcerting process, as the end result is moving from attributing value to the goods for sale, to simply needing to acquire more distributors.
However, some opportunities can be both legitimate and valuable. These are companies with genuine intentions and that do good business. Many of these well known companies have been household names for decades. Legitimate companies include many distributors of jewelry, kitchenware, beauty supplies and ethnic art among many others.
In fact, a large number of these type of companies have seen greater success in recent years. Knowing how to assess an opportunity can save you both money and time. It is prudent to remember when researching that the true worth of a business is generally seen in the product that it distributes. If you cannot market the product in confidence to loved ones and friends, then its value remains questionable, as does the business opportunity itself.
Before buying in make sure to test and assess the product for value. The product is the greatest tool for recognizing pyramid or other scams. If the product is sold based upon its value, and not upon your talent at luring in new investors, its is likely that you have stumbled upon a good opportunity.
Research will always be key before investing money and time in any mlm marketing opportunity. This will help save face among the contacts that your will use within your business endeavors. It can also prevent you from joining a venture that does not sit well with your own value system. There is money to be made, but caution should always be used.
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