THIS MARKETING ARTICLE IS SPONSORED BY:

www.DroppingJawMegaPack.com

INDEX OF SECTIONS>>HOME OF THIS SECTION >> The Difference between MLM and illegal Pyramid Selling

The Difference between MLM and illegal Pyramid Selling
By frann leach

How can I tell a legal Network Marketing business from an illegal Pyramid?
Network Marketing — also known as MLM ('multi-level marketing'), relationship marketing and referral marketing, is the 21st century way for entrepreneurs to build a high income, without having to make huge financial investments. Most MLMs don't need any premises beyond a computer desk and perhaps a filing cabinet (though some may need storage space for product). Unlike franchises (the business opportunities of the 20th century) in general the upfront investment is small and training is usually free or very cheap. Overheads are low or non-existent, profits can be very high indeed.

At first glance, MLM is very similar to the pyramid schemes which have been made illegal in most of the West. In the pyramid, a representative pays his initial stake when he is recruited and is then shown how to recruit other representatives. Every representative recruited brings a bonus and adds to the potential residual income. But, if no customers are required, sooner or later the whole structure will collapse, because there is nowhere for the income to come from. In pyramid schemes, the people at the top are the only ones who can make money, because there is a limited pool of potential recruits, and no other source of income. It's pretty obvious that no company can survive for long without any customers.

How to distinguish a Pyramid from an MLM


ˆ
In MLM, it is possible for a recruit to overtake the person who recruited them, and end up making more money than them
In a pyramid scheme, your place in the matrix is fixed. You cannot overtake your sponsor. Even if they do nothing after recruiting you, they will still make more money than you.

 

ˆ
In MLM, nobody makes any money until there is a sale: the company's income derives from its customers, and so does the income of the company's representatives
In a pyramid scheme, you are paid bonuses for recruiting other representatives, regardless of whether or not they achieve any sales or gain any customers. Because there is no income to the company, sooner or later this scheme will collapse.

So there you have it. When you look at the differences, it is quite clear why pyramid schemes were made illegal in the first place; they're just a scam. In contrast, network marketing is an excellent way of making money by recommending products and recruiting others to do the same; it is the 21st century answer to the franchise. It's hardly surprising that 10% of new millionaires made their money in MLM... and who knows how many settled for just half a million, or less?

There are thousands of opportunities available online, many of them through my page at: <"www.informationzone.biz/what-an-opportunity">http://www.informationzone.biz/what-an-opportunity/">www.informationzone.biz/what-an-opportunity, but whichever you choose, do bear these points in mind before making a final decision.

Finally, let me wish you as much success as you deserve in your new venture.

©Frann Leach, 2004

About the Author
Frann Leach
http://www.informationzone.biz/

Frann lives in Edinburgh, Scotland. She has her own internet marketing business and is always on the lookout to recruit go-getters like herself.

Find out more: here

OTHER ARTICLES OF INTEREST:

Attorney Marketing – Boosting Revenues With No Added Costs
Attorney marketing can encompass a number of areas. You might have a media campaign; direct mail, educational marketing, PR, Internet or you might focus your legal marketing on building a referral...read more

Creating your Future with a Marketing Plan
Almost everyone who dreams of starting their own business is familiar with the fact that they should create a business plan. However, often that’s where many people stop. When you created your...read more

Free Internet Marketing Articles!
Did you know there is a new site that offers over 1000 free articles on internet marketing There is! Check out this new resource on MAKING MONEY ONLINE! Brand New Internet Marketing...read more

MLM Training Newsletters- The Top 17 Network Marketing Newsletters in MLM
After a years worth of research, here are the top 17 MLM Newsletters for training in MLM! Read on to learn more! A good MLM training newsletter is worth a million dollars to a...read more

Reality Check! Do you really understand what marketing is?
Please consider my article for publication in your e-zine or website. You are permitted to reprint my article electronically or in print so long as you include the by lines. Exact word count 579...read more

RSSTAGHERE4