My wife and I have spent the last 15 years in pursuit of a dream; to be self employed, financially secure and free to travel. The journey has included a few side trips through croc infested swamps, rocky deserts and frozen tundra. The one thing we’ve learned through it all, there are no short cuts.
The promise of many Pyramid schemes is quick riches with little work. Those who do succeed with Pyramid schemes do so through consistent, hard work and it may take several years to build the foundation of their business.
Are you considering a Pyramid business opportunity?
It is a Scam if
1) You only earn money by recruiting new members. Ultimately, any successful business must sell a product or a service. The foundation of the Pyramid doesn’t rest on any substantial base, a product or service, so the Pyramid crumbles. According to Wikipedia “Clearly, the flaw is that there is no end benefit; the money simply travels up the chain, and only the originator (or at best a very few) wins in swindling his followers. Of course, the people in the worst situation are the ones at the bottom of the pyramid: those who subscribed to the plan, but were not able to recruit any followers themselves.”
2) You are asked to purchase inventory or marketing materials in advance. According to the website, Crimes of Persuasion: “Inventory loading occurs when a company’s incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. Legitimate multilevel marketing plans actually sell their product to members of the general public, without requiring these consumers to pay anything extra or to join the MLM system.”
In fact, any Pyramid Scheme that meets the following criteria is an illegal endeavor:
You must make an investment to get the right to recruit others into the program…and
When you recruit another person into the program, you receive what the law calls “consideration.” That usually means money, but can be anything of value…and
Your new recruits must make an investment to get the right to recruit, and they receive “consideration” for getting others to join.
http://www.crimes-of-persuasion.com/
What is Multi Level Marketing?
Unlike Pyramid Schemes, MLM’s offer an end product or service and do not rely solely on sign up fees or membership obligations to profit. It is often difficult to distinguish a legitimate MLM from a Pyramid Scam. According to Wikipedia; “In the most legitimate MLM companies, commissions are earned only on sales of the company’s products or services. No money may be earned from recruiting alone (”sign-up fees”), though money earned from the sales of members recruited is one attraction of MLM arrangements. If participants are paid primarily from money received from new recruits, or if they are required to buy more product than they are likely to sell, then the company is a pyramid scheme.”
However, many MLM organizations have been criticized for their cult like community and questionable tactics. Before you invest in any MLM opportunity, do your homework. Take time to research the company, check with the Better Business Bureau or watch groups, such as: http://www.pyramidschemealert.org/ or http://www.matrixwatch.com/.
Should you decide to invest your time and money in an MLM opportunity, be prepared to work long hours. According to Robert L. Fitzpatrick, “Making money in MLM requires extraordinary time commitment as well as considerable personal skill and persistence. Beyond the sheer hard work and talent required, the business model inherently consumes more areas of one’s life and greater segments of time than most occupations.”
There are no short cuts on the journey to success. The only proven route is one of consistency, resilience and patience. Only then can you hope to arrive at your ultimate destination.
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