Beware Of These Network Marketing Scams

By Joe Burke

How can you tell the difference between a legit MLM opportunity and one of those network marketing swindles or pyramid schemes everyone has warned you about?

What is the difference that makes all of the difference? Is there an easy way to separate the wheat from the chaff, chew the meat and spit out the bones, and defend you and your pocketbook from being taken for a ride? Let's dig a little deeper into the subject.

Network Marketing Scams Defined

There are plenty of different terms for network marketing, including MLM, matrix marketing and dare I state pyramid schemes but they all descend to a business model for offering goods and services with networks of independent suppliers and direct salespeople. Ask anyone what the most prominent network marketing company is and they'll probably say Amway.

Amway has a network of tons of active distributors around the world that generate billions of dollars in sales yearly.

Traditionally, Amway has succumbed to the "network marketing cons" label a considerable number of times. But in every case, including a 1979 FTC inquiry in the US, a 1997 Belgian legal action and a 2008 court judgement in the United Kingdom, every fraudulent claim was dismissed.

In brief the FTC found Amway innocent of being an illegal pyramid scheme or just another one of those network marketing cons because "distributors aren't paid to signup people and have got to sell products to get bonus checks, and the company was committed to purchasing back its distributors ' excess inventory.

Just how to Spot Network Marketing Scams

In a legit network marketing opportunity, commissions are earned only on sales of the company's products or services. Commissions can be paid on both wholesale and retail sales. But no money may be earned from hiring other people as a distributor. Put simply, you can't make a dime from sign up fees. If a company pays out for the sign up fee, probabilities are it will fall into that dreaded network marketing stings class as it then becomes an illegal pyramid or ponzi scheme.

Protecting yourself Against Network Marketing Scams

However every year there are people that prey on would-be network marketers by offering dubious MLM opportunities. They undoubtedly won't last beyond a few months or a few of years because they take people's hard earned cash rapidly, do not supply them then fade away. Extremely few bogus network marketing providers will definitely be around after five years.

Unfortunately, every few years there are people that prey on would be network marketers by offering dubious MLM opportunities. They most likely won't last in excess of a couple months or a couple of years because they take people's hard earned cash quickly, do not supply, then fade away. Bogus network marketing providers will certainly be around for many years.

Guarding yourself against a single fraudulent network marketing scam might be carried out by finding a firm that features a track record and is immune to legal ramifications from their compensation program. You are able to checkout for a list of the top rated 25 MLM organizations that qualify:

- Company has been in business for a minimum of a decade. - Firm provides a MLM compensation plan for it is distributors. - Company has an Alexa rankings. - Organization has history in Google Trends Reports. - Company at a Page Rank of Higher than 1.

Nonetheless, even the criteria listed above has absolutely nothing to complete with the probable achievement you'll have in such a business. So now you realize the traps, and are far better equipped not to fall into the dreaded "network marketing scam" category.

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