What is MLM about? Is it a Scam?

What is Multi Level Marketing About? Is Multi Level Marketing Scam? Is Multi Level Marketing a Pyramid Scheme?

MLM (Multi Level Marketing) is a strategy which several companies are using to sell their products by giving incentives to their distributors when they can recruit more new distributors as their downline to sell their products and in the same time all those distributors can also make money by selling their products direct to the customers. These kind of MLM companies main focus is to sell their products. When distributors make the direct sales, they will get certain commission according to the sales volume and also get commission according to the sales volume of their recruited distributors. Many MLM companies provides opportunity to earn commissions from multi level downlines, means if you recruit some distributors and those distributors recruit other distributors, then also you can earn commission from the sales of your those third level distributors which your recruited distributors have recruited. Like these, some MLM companies even offers to earn commissions from several multi level downlines, means upto 5-10 levels. The main benefit that companies can get from this kind of MLM strategy is the more sales of their products. However, people often get confused between MLM and Pyramid Scheme about which we have explained in detail later in this post.

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Is Multi Level Marketing a Scam? Nope, if it is far from Pyramid Scheme

Although, Multi-Level Marketing is a legitimate business platform, but also there are so many controversial. There are lots of business models out there which pretend to be MLM, but in real are Pyramid Schemes which are making people confused. Actually, the Multi Level Marketing companies focus to sell their products by recruiting new people, but the Pyramid Schemes just focus on recruiting the people more than selling their products. If you find the business plan of some MLM company is more focused in recruiting, then that is not a real MLM company, but is a Pyramid scheme which is an illegal business model and even most of times can't sustain for a long run. If you find the compensation plan of some companies seems to be using the money from new recruits to pay the people at the top, then that is 100% Pyramid Scheme, not a Multi Level Marketing company. 



Is Multi Level Marketing a Pyramid Scheme? If not, then how to differentiate ?

Aforementioned, it is clear that Multi Level Marketing is not a Pyramid Scheme. So, now let's find out how to differentiate it.


The legit Multi Level Marketing companies always focus to sell their products to real consumers, not to their distributors. However, if you find some self claimed MLM companies whose compensation plans are more focused to sell their products to their members who recruits new members to buy their products than selling to the real consumers, then that is Pyramid Scheme. The Federal Trade Commission (FTC) which has been investigating in this field from many years, has found several Multi Level Marketing companies that has been trying to blur the lines between the Pyramid Scheme and Muti Level Marketing and making many people confused. That is the reason why many people think MLM is a Pyramid Scheme, but it is not.


Conclusion. Is MLM a Worthy Place to Earn Money?

According to the industry data, although millions of people have been involved in this business, but only few has earned good amount from legit MLM companies. According to our reserach on different MLM companies, we have always found only less than 5% members of each MLM companies are making good income to make a living from it. And other who get confused to identify between Pyramid and MLM companies, most of time even have lose the money than earning from this industry. So, according to this data, it is clear that it is not a cup of tea for everyone to earn good amount from Multi Level Marketing companies. You need to do lots of hard work and need to risk certain amount of investments in order to get succeed from MLM companies and even sometime still hard work doesn't guarantee the good returns. So, in this type of situation, we prefer Affiliate Marketing over Multi Level Marketing companies.


We are not saying MLM is a bad, but Affiliate Marketing is more easy because first of all you can find every kinds of products to promote through affiliate marketing because companies like eBay and Amazon also provides affiliate commissions, means the commission when you can sell their products. You can think yourself, won't it be more easy to sell the popular products of our choice directly to the consumers and earn commission than going over to some specific unpopular products for which we need to do some initial investments and need to explain consumers about what those products offer and also need to convince people to be our downline to sell those products and need to teach them to make more downlines? Yep, may be many here will argue with us when we say MLM offers unpopular products. But, can you give the name of single MLM company which offers popular products like affiliate programs eBay and Amazon can offer?  Yep, may be you will say Amway, Herbalife etc., but don't you think those products are also just become popular by pushing up from MLM strategies? Even compare with other branded products, those products are still unknown for many people. Actually, most of times those companies start to follow the MLM strategies which get struggle to sell their products in the real market. So, according to us, we prefer Affiliate Marketing over MLM. Even our No.1 recommended online work company known as Wealthy Affiliate also offers only an affiliate program because its main focus is not to recruit the members in it,  but to sell its detail training program which will help anyone to be an expert affiliate marketer and make money from affiliate programs like eBay, Amazon, etc. and also teaches the expert business skills to make money by creating our own website in our own subject of interest and also teaches to make money from companies like Google AdSense as well as even from MLM companies. Even you can consider Wealthy Affiliate as an university for anyone who want to make money online. You can find more details on Wealthy Affiliate by clicking this link:- newsonlineincome.com/wealthy-affiliate-review/

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