Multi-level marketing (MLM) has garnered much attention from society as we know it. Many claim they are scams, while some others profit immensely from it. Ultimately, investing in a legitimate MLM company is about choosing the right one, and it can be done by taking the necessary steps to ensure the legitimacy of its payouts and quality of the products it sells.
Firstly, the methods of how and when payouts are given should be investigated. If commissions are only given when new members are “recruited” to join in the venture as new distributors, you’re likely to be in a world of trouble. This practice is called a “pyramid scheme” (or in some cases, a Ponzi scheme) and it is illegal in many countries. This type of marketing is doomed to eventually fail, as earning commission through this method will cause the business structure to eventually collapse when no more new distributors can be recruited.
Additionally, the products that are sold should be thoroughly investigated as well. Many companies that employ “pyramid schemes” disguise themselves as legitimate MLM companies and claim to sell products that are useful to the public in general. However, they may use trickery and attempt to fool customers into buying their products, such as “proving” the legitimacy of their product using pseudo-science, often backed up by “renowned experts” with fake qualifications.
While many fraudulent and illegitimate companies have disguised themselves as legitimate MLM companies, this does not mean all MLM companies are suspicious and are out to consume one’s wallets. Many legitimate MLM companies exist worldwide that are internationally recognized such as Avon and QuestNet.
QuestNet is an established MLM company with more than 10 years in business. The company has more than 5 million members worldwide, and leverages on the power of the Internet and online e-commerce stores to push its varied range of products. You can download the QuestNet Presentation to see how a typical MLM business/compensation model is like.
Saying that, potential investors just have to ensure that they take the proper precautionary steps to ensure that the company they invest in does not eventually dry out their wallets, or the wallets of their recruits.