Multi Level Marketing

Multi Level Marketing (or MLM) is another system that can be quite deceptive. There are basically two types of Multi Level Marketing programs, the legal sales oriented type, which offers a product or service for a fee. And the more common type, also known as a pyramid scheme. It is often difficult to tell the difference between the two, so here I will explain not only how legitimate MLM works, but how to avoid the pyramids.
Basically the way MLM works, is that a company hires it's sales people as independent contractors, who sell at their own pace on their own time. These contractors also are able to recruit other people to be contractors and will receive a bonus or commission for each person they recruit. Amway, Avon and many other well known companies can fall under the umbrella of MLM.
So how does it actually work? Well, often you have to buy a supply of the product, wholesale, and then simply try to sell it for a prophet. As a member of the company, the company itself will often offer various forms of assistance to begin with but ultimately, as an independent contractor, it is up to you to figure out how to sell the products. This is very much a self motivated field. If you work hard and really put in the effort, you can make a great deal of money from your sales, but in general, you can make even more from recruiting.
This is where the difference between the legit, and the not so legit comes in. When the focus is on the sale of a product or service it tends to be more legit, while if the focus is on recruiting the legitimacy begins to come into question.
Here is an example of a typical pyramid. A man tells me he is a cell phone salesman. He offers to sell me a phone with all kinds of great G3 access and all the apps, and a great service with rollover minutes and a family plan unlimited nights and weekends all the bells and whistles. He shows me a picture of the phone, he shows me his 'catalog' and all the plan options typed out on very professional looking paper, glossy and all. He even produced and order form and all the paperwork that looks all legit. Then, finally, the real sales pitch started.
He told me that "just between us" this selling phones thing is working great for him. He told me how now he is his own boss and makes insane large sums of money, and that I could make the kind of money he does as well! How? How do I make the same kind of money you do? "Easy.." he says "look at what I just did with you, you could do that right? Of course you can, if I can do it, you can. And I can get you in! All you need.." here it comes... "is to join our plan for a small license fee." Now the license fee can be training fee, or money for the products or whatever they want to tell you it is. In MLM it is a real fee, in a pyramid it is the money he gives to his boss who pays him a percentage of it, for getting the money from you.
How to tell the difference? Well when it came right down to it, using the example above, I said no thanks, but I DO want the phone! I'll buy it from you right now, I got the cash give me my phone. BUT no phone. He did not sell me a phone because there was no phone, there was only an attempt in talking me into giving him money, to buy the training, or license or whatever, to talk someone else into giving ME money, and so on and so on. The classic pyramid. If they offer you a service, tread carefully, if its a product ask to see the actual physical item. Avon and Amway reps almost always have a whole stockpile of product on them, in their car or in a bag, not just a catalog.