Who's really making the money? You or your sponsor?
As technology continues to grow, so do the numerous opportunities of MLM (multilevel marketing). Companies using this strategy are multiplying at a rapid rate. Solicitations to jump on board can be found anywhere these days. According to those promoting the business, they are offering you the "opportunity of a lifetime", "the prosperous wave of the future". Their business model is turning heads in the industry and rolling with tons of momentum. Everyone is catching onto the idea as the business is becoming openly accepted, a factor that proves it's legitimacy. They will explain how this new financial venture will inevitably replace most forms of marketing in the very near future. After hearing all of this, it's sometime difficult not to buy in. Anyone who has so much faith in something and tries that hard has to succeed with it eventually. It would be a crying shame if they didn't.
Beware of the get-rich-now pyramid scheme
Unfortunately, several of the MLM business models that will approach you are concealed underneath misleading promotions and blatant scams. The grand opportunity an IBO (Independent Business Owner) will offer is something very comparable to a lottery ticket - probable to all who participate but very unlikely for most.
Many claims made in the multilevel marketing industry are questionable at best. The very legality of such systems rests loosely on a 1979 verdict that ruled in favor of a single company. Since then, the guidelines set forth have been ignored and abused on a routine basis by many companies. Lack of oversight and strict governing by designated authority figures provides this industry with ways to prosper despite an occasional prosecution by a state attorney or the U.S. FTC (Federal Trade Commission).
When checking the documented scoreboard, you will find that multilevel marketing is characterized by a high-rate of failure and financial loss for millions of individuals across the country. The MLM structure is based on a never ending sales chain. Beginners are led to believe that the model revolves around buying and selling goods from the super distribution center available at their disposal, a process known as personal retailing. Before long, the sales pitch begins to sink in, the meeting you attended starts to make a lot of sense. After all, it's cost effective, gives you nationwide distribution and caters to a plethora of consumer purchasing preferences. The retailing aspect is actually a misleading pretext for the core of this type of business. The cardinal goal is to enroll ambitious investors into the pyramid like structure with the promise of exponential growth.
Just like many similar structured schemes, the income attained by the large number of sponsors and those at the top are a continuous stream provided by investors at the bottom. While the multilevel marketing model may appear well designed by the uniformed, many of them eventually collapse or are prosecuted for breaking the law.
Discerning the real from the fraudulent
We all want to be on that road to financial freedom, but at what cost? While there are numerous multilevel marketing scams being conducted, a few legitimate businesses exist as well. The best advice here is to thoroughly research the company, learn how the model works, exactly how much it will cost to enroll and how you will be paid for participating.
You can learn more about multilevel marketing and pyramid schemes by visiting the FTC's website: www.ftc.gov
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