Is MLM a Scam?

Is MLM a Scam?

If you understand what MLM or multi level marketing is, you will accept that MLM is a legal and legitimate business as well as ethical. Basically, MLM is a marketing strategy used by MLM companies to move products to consumers directly.

The company pays its distributors to bring the products to consumers. It also pays the distributors for introducing others to distribute the products to others. What is wrong with that? Nothing. That is why in many countries, MLM is legalized.

The problem arises when MLM companies creates MLM compensation plans that pays unequally that appears like pyramid, where only the top most in the genealogy of distributors earns more and focuses solely on recruitment of distributors with investment fees; this is money game.

If the company uses the MLM marketing concept just to create profit for itself and the top leaders through the compensation plan, than the company will not last long. These has been happening since the beginning of MLM.

So the legality of MLM depends to the MLM company and how it runs its compensation plan. It is totally unfair to say or treat the MLM industry as illegal or illegitimate just because some companies practices pyramid schemes and make use of distributors by selling them false hopes and dreams.

Many distributors have become victims of such companies and leaders; the reason why MLM has a bad reputation. So before you join a MLM company, check out whether the company is legally registered and is licensed.

Study the compensation plans carefully and understand how it works. Get to know the owner and leaders in the company and find out their true motives.

The company must be run by people who cares and has a plan that will help people achieve their dreams not just selling them dreams and using them. The plan must provide equal opportunity to every distributor regardless of the level the distributor is.

It is your responsibility to do that research and investigate the company and the opportunity. If you don’t do this and gets cheated by these fake companies and leaders, it is your fault; not MLM. Unfortunately many people who gets cheated in this way blames the MLM industry as a whole not realizing what a wonderful business is MLM business.

MLM is legal and ethical, if you don’t do your “due diligence”, who’s to blame?

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