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Is Your MLM/Multilevel Marketing Business
Legitimate?
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by:
Ted Riley
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Copyright 2004 Android Technologies, Inc.
INTRODUCTION
A legitimate multilevel marketing business is a great way to get a
legitimate residual income that could change your life from the 9-5 rut
to a life of financial freedom. But there are many pitfalls out there
that will make achieving this difficult. (Or even illegal depending on
the MLM you decide to sign up with.)
There are several ways for a person to ascertain whether or not a multi
level marketing company is or is not a legitimate MLM. There are a few
things that can be checked to make sure you are not going to get
involved in something that breaks the fifty or so statutes that govern
this type of company.
TYPE OF PRODUCT
One of the ways to separate the legitimate MLM from the scams is by
looking at the type of product that the multilevel marketing home
business will provide. Many multilevel marketing home business ideas
work on the principle that they will be charging way too much for the
service or product they will provide. So check that the company is
charging a fair price for their product. Also check that you can become
involved with the company without having to pay for a huge amount of
inventory. This is also the way that many scams operate, on the idea of
selling to people who think that they will be selling in large volume
from the get go and not caring what happens to the investor after that.
If you have to invest thousands in a multilevel marketing idea then it
is best to head in the other direction fast.
It is best to ensure that you can be a sales representative with little
or no more than the purchase of a sales kit or demonstration materials.
COMPENSATION PLAN
Looking at the compensation plans of your prospective multilevel
marketing company is one fo the best indicators as to whether or not it
is a scam. Check whether the compensation plan pays bonuses or
commissions purely on the basis of recruiting more people into the
company. If it does, it is illegal. It is also not a legitimate MLM if
it pays headhunting fees as this is also illegal.
A home business idea such as a legitimate MLM is great because of the
relatively low financial risk involved. This may not ring true to the
work at home business ideas you have seen but the good multi level
marketing companies will buy back the sales kit and any re-sellable
materials from any of those who wish to cancel. This is actually
required by law so have a look at this before handing any money over.
PERSONAL USE OF GOODS
The FTC also rejects the idea of personal use of the goods or services
that you will be providing as a legitimate retail sale. But the debate
continues over whether or not the sales to non-participants and
purchases in reasonable amounts are retail. There are big grey areas in
the world of multilevel marketing so keep abreast of the laws and
statutes in your state.
TRAINING
Probably the single best way to ascertain whether or not a company is a
legitimate MLM is to look at the training that will be provided in the
way of sales and recruitment. Any company worth its salt will want to
have people who know what they are doing. So they will provide training
to those who have little or no idea how to sell or market a product.
Also, having a clear idea as to what you will be doing is important in
choosing a work at home multilevel marketing business. It is astounding
to see how many companies do not stipulate whether or not you will be
in a selling, supervising, distributing or soliciting role which is
required under federal law.
About the author:
Ted Riley is an entrepreneur and educator interested in teaching others
on the benefits and rewards of having your own home business. He writes
frequently for the web site "A Grandmother's Business", a web site
dedicated to the needs and equirements of the mature woman entrepreneur
and job-seeker. To see more articles like this visit:
http://www.grandmabiz.com/
Circulated by Article Emporium
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©2005 - All Rights Reserved
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