So, a quick recap.
Last week I wrote about
MLM as "The Devil Within". I
mentioned that I didn't like MLM plans because they
over-price the product to pay commissions on several
levels.
They also have a bad
reputation for being akin to
pyramid schemes...especially the ones which pay people
for recruiting *other* people and very rarely mention
actually selling *product*.
OK, so I'm fairly anti-MLM.
But, like all decent
scientists, I keep an open mind.
Several people wrote
to me after reading last week's
newsletter and claimed that "their MLM" was different.
Like I hadn't heard
THAT one before! ;-)
Seriously, though.
I can appreciate that products
sold through traditional channels have to pay mega
bucks to advertise or to have celebrities endorse
their products...whereas...
...products sold through
alternative channels such
as MLM via the Internet eliminate those costs and
therefore claim to be able to pay their participants
and still sell the product at a reasonable price.
Also, a lot of "real
world" businesses have substantial
startup costs such as franchise businesses or startups
trying to raise capital for new machinery, so I can
understand that there may be legitimate startup costs
associated with joining an MLM business opportunity.
OK, so I've conceded
those points.
But there are still
the original problems I raised. If
an MLM plan pays you for referring others, and doesn't
sell product, it's a pyramid scheme. Beware.
If you are forced to
buy any volume of "product" per
month to remain part of the MLM plan, Beware.
If an MLM plan makes
claims on how much you'll earn
and bases those figures on sales by your downline,
rather than sales YOU make, Beware.
If anyone endorsing
the plan speaks about revenue
they *think* they'll make from the MLM plan, Beware.
Ask for proof of any claimed earnings.
Check that there's
a "cooling off period" or a
clearly explained refund policy.
Do your homework. With
MLM having such a bad name,
the "real" MLM opportunities MUST be few and far
between!
http://www.ftc.gov/bcp/conline/pubs/invest/mlm.htm
This InfoShock was written by Neil Shearing, Ph.D.
To get your free copy of his Internet Success
Newsletter, visit the www.ScamFreeZone.com
