Is Multi-Level Marketing Legit?

Planning & Saving
on May 27, 2013

Multi-level marketing (MLM), also known as pyramid selling, is a method in which salespeople are paid for their sales and the sales of the people they have recruited. These marketers have several levels of compensation. There are people who criticize MLM because of pyramid schemes, forced product purchases and price fixes. Although there are some successful people in the MLM practice, they are few compared to the number of unsuccessful people.

Multi-level marketing is designed to promote products to as many people as possible. As a MLM distributor, you agree to sell a product and find your own customers. Then, you hire a downline of distributors who also find their own customers. As the original distributor, you receive cuts for all the payments and commissions of your recruiters. In the end, the recruited sellers do not benefit because the most money floats to the top of the chain. The amounts get smaller the more they go down the pyramid. At the very bottom, sellers who do not recruit any sellers themselves will end up with negative balances.

Participating in a MLM plan is one technique of saving money. Wholesale products are affordable items that work for the bulk buyer. You can find similar styles at wholesale cost cuts. As a distributor, you save money by working less and getting more. Have extra money to buy the things you want or invest in a new business. Work part-time in your professional endeavors and still earn for months or years in the future. Devote more time to more important needs.

The legitimacy of the MLM business will always be in question. There are many pyramid schemes that are promoted as legit MLM operations. These schemes easily fall apart when distributors cannot find any more sellers. Then, the people at the bottom of the pyramid are left with no earnings. The Federal Trade Commission sends out warnings that people should not base their income on the earnings of distributors.

It is possible to make money from multi-level marketing, but that is realistic if you belong at the top of the pyramid. Anyone who wants to pursue this plan should know the risks and seek helpful guides. If the plan works, generate some income and invest it wisely.

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