If you are looking for a quick way to make a profit, you will definitely find the offers of multi-level marketing or MLM companies appealing. These companies use a pyramid selling scheme that involves selling products or services and earning through commissions by getting others to join the scheme.
While there are indeed stories of people succeeding in the scheme, a substantial amount of stories argue these companies are schemes that prey upon the innocent. If someone reaches out to you offering a business that promises quick money through direct sales, look for the following 10 signs to see if they are an MLM scheme:
1. “Anyone can join”
For MLM companies, they want people to think that their offer is for everyone. They would show that it is “effective” for a specific person and show that there is little investment to get in. However, if this was legitimate, how would the company accommodate everyone?
2. The Offer is Made Out of the Blue
Some MLM schemes appear out of the blue, and there will always be “someone” from your social circle who will ask about your financial status and would like to help you.
3. Fake or Low-quality Products and Services
A major sign that a business is an MLM scheme is when they don’t provide you with any product or service; if they do, it’s low quality. This is because they want to get more investors or resellers to get money to fund their operations rather than actually selling a product.
4. Make Unfounded or Outrageous Claims
MLM schemes often make either outrageous or unfounded claims to entice people to join their company to avail of these products or services. If someone gets into the scheme, the companies will ensure they will not be held liable for the sale of these ineffective products and services and make the distributor responsible for everything.
5. Use High-pressure Sales Tactics
MLM companies are notorious for using high-pressure sales tactics to prevent people from asking too many questions about the company and its products. It is a red flag if someone approaches you and prevents you from learning more about the company.
6. Pressures You to Buy Products
No matter what kind of MLM business approaches you, they will ask you to buy their products as part of their “fast track” program and keep a stock inventory. However, if you want to “earn”, you will be told that you can do so if you buy more products from them, and this can lead to bankruptcy for some even before they earn from selling these products.
7. Does Not Have a Clear Channel for Communication
Before working with any company, you should be able to ask them hard questions and get answers whenever you have doubts. MLM schemes prevent you from getting straight answers and even glossing over your issues. Some of them will not even inform you about company problems because they want you to keep on investing and recruiting.
8. Training and Resources come with High Fees
Some MLM companies create their training programs and resources and sell them to their investors, and MLM companies even charge you for invitations to their events and gatherings. A legitimate company or scheme will not ask you for any fees for these training programs and resources.
9. Utilises Questionable Advertising
To get more people lured into the scheme, MLM representatives would promote their offers as a “job” and other similar descriptions. It is important to note that MLM schemes are not jobs as they are more of a business.
10. Gives Off an Unsettling Feeling
If someone introduces an MLM scheme to you, you may feel a sense of uneasiness right away. When this occurs, it is best to listen to your intuition and look at the situation again.
When reviewing any offer from a company, it is important to note that other schemes may also raise the same flags as an MLM scheme. It may also indicate that this home business setup isn’t really for you. Before it is too late, research to see if these companies are legit and ask yourself if this is the setup for you.
Like what you read above? Follow me now as I uncover more about MLM and why you shouldn’t join them. While you are waiting, here are some interesting articles:
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