What Is A Multi-Level Marketing Scam: Know Before You Join

People get approached all the time either on social network sites or from a friend they haven’t heard from in many years, and now they are asking to do business with them.

Most people involved in Multi-Level marketing will tend to explain why they are not in a Multi-Level marketing pyramid scam.

You need to protect your finances and understand what a multi-level marketing scam is.

You don’t want to be one of those people who say if I only knew, so before you join, find out what is a Multi-level marketing scam.

What Is Multi-Level Marketing

Multi-Level Marketing is a system where people can make money through a downline. Most multi-level marketing systems have a unique comp plan.

Meaning the potential money you can make through direct sales or when you recruit people into their system.

Most comp plans allow people to make money based upon your recruitments and who you recruited into the system. These comp plans can pay down seven levels depending on how each individual multi-level marketing system comp plan works.

There are various types out there that can go two levels deep or more. It all depends on the creator of the multi-level system.

How To Identify You’re In A Multi-Level Marketing system

To identify if you are in a multi-level marketing system is not based on direct sales alone.

It is based on the people you recruit, and the people they bring in, and I can say that four more times which indicates the levels.

The comp plan can get quite confusing when people are in these MLM systems because there are so many variations on how you get paid.

It’s not like you get paid a $50 commissions for a product you sold.

If it was that simple you can easily do the math and know if you sold ten products, your commissions for each product sold is $50, would be $500 on payday.

MLM’s Usually Have Incentives Or Bonuses

Most MLM marketing systems want you to move quickly. The faster you can recruit people, the bonus or incentives are appealing.

Bonuses or incentives tend to read like, make $10,000 if you bring in 10 active members within your first month.

Then you may see an explanation of how easy it is to do and may show many ways of recruiting people into their system.

A stranger can mean danger to some, so MLM tends to advise that you build a list of friends and family first because of that trust factor along with an opportunity to bring people in at a higher percentage.

These friends and family lists don’t mean they will join, but your mom or cousin may want to help you out so they might participate because of the connection.

Bonuses Are Difficult To Attain

What people should know about these incentives and bonuses is that there are rules in fine print that people may not know.

If you look at Surge 365’s bonus, it takes two months and 100 active members to receive their $10,000 bonus. The first month is what they call their qualifying month with 100 active paying members. The second month is their maintain month, meaning you have to maintain these 100 paying active members to get the bonus.

If one person doesn’t pay within those two months, you don’t get that $10,000 bonus. One hundred people is a lot of people to maintain to reach that goal.

If you get involved in an MLM opportunity, it is a good idea to learn how these bonuses work. Just like their comp plans, their incentives or bonuses have their own rules, and you should learn them before you jump in.

Different Types Of Multi-Level Marketing Scams

There are different types of Multi-Level Marketing scams. Scams are scams, and even if someone tries to tell you it’s not, the indicator listed below are telltale signs.

No Products

The basic pyramid scheme has no product that you can sell to the general public. It’s pretty much-passing money around.

You bring in two people, and they bring in two people, and you make commissions based on everyone recruiting people into the scheme.

As the pyramid scheme grows the people at the bottom of these schemes will not make any money, and the whole pyramid will collapse.

Products But

Some schemes like to mask what they are doing by calling it something else. They do have a product, but you have joined their system to get access to the product.

They don’t sell these products to the general public. Most of these schemes have digital products, and the comp plan works based on how many people you recruit into the system.

You also make money based on your recruits; however, it’s a Multi-Level Marketing scheme based on recruiting people into their system.

Money is based on you recruiting people and the people you bring in.

Don’t Get Paid Unless You Purchase Their Product

Each multi-level marketing scam makes money based on product volume from every member.

These businesses have to stay in business some way, so you recruit people in, and they have these autoship payments that have to be paid every month for people to qualify to make money.

If you don’t pay your autoship monthly payment, you don’t make money. Depending on the MLM autoship requirements, it can run some people hundreds of dollars, and they haven’t even made a return on their investment for years.

Franchise Scams

Some of these schemes will use the word franchise. They have franchise schemes where they say it’s a franchise people are buying into, yet their whole plan is based on you recruiting people to buy into their franchise.

Again their products are not sold to the general public; it’s based on you recruiting people into the scheme.

Low-Quality Products

A lot of Multi-Level marketing scams offer low-quality products. A lot of lotions and potions/snake oil, or should I say vitamins or diet products they have for sale doesn’t have to be FDA approved.

So there are a lot of claims that their products cured their terminal illness or helped them achieve their goal weight.

There is no real proof that their miracle potions or lotions worked. If their products worked as they claim, there would not be a Multi-Level marketing system in place.

Think about this; if there were a magic pill that made everyone lose the weight that it claims it does, people would buy it by the truckloads, period.

People would eat whatever they wanted when they wanted without gaining a pound.

If there were any proof of that, I would be in that line getting my pill and eating foods that I want to eat but don’t because I know it would shorten my life.

Good Indicator

As you can see the common denominator of a Multi-Level marketing scam is based on recruiting people not products sold to the general public.

Yeah, some schemes have a product to masked what they are doing, but the gist of the system is based on you recruiting people, and the people you recruit do, and it can go on and on to a certain amount of levels.

If There Are No Direct Sales, You Won’t Have A Business

Look at Amazon as an example. People go back there and buy all the time. I do it, and many others do. Amazon is based on direct sales.

If an MLM business doesn’t have products for their members to sell, you are in a Multi-Level marketing scam.

The products sold should be of quality. I know that people buy things they don’t need all the time, but people are not going to come back and purchase junk either.

Even though people buy stuff that they don’t need, it must be of value to them.

Building a business based on recruiting others isn’t going to last very long, and you’re just wasting your time and money.

The pyramid will eventually collapse, and the only people who made money are the people at the top of the scam.

All In All

Before you join Multi-Level marketing scam, look for those telltale signs. Is their whole incentive based on you recruiting people?

Also, does their product offer real value to people, or are they selling snake oil or low-quality digital products?

If that is the case, know that you are in a Multi-Level marketing scam.

A lot of people believe that all Multi-Level marketing businesses are scams. Not everyone is going to be enthused to join, I’ve done my share of them and the no excuses is something you’re going to have to deal with.

What is your take about Multi-Level Marketing, Tweet me @evelynbaz!

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