Archive for the ‘How are they making money?’ Category
Multi-Level Marketing: How are they making money?
In the past couple of months, I’ve been given two supposedly goldmine offers “that I just couldn’t resist.” Now I’ve been burned by these schemes before, so I want to share the dangers of multi-level marketing and why it’s a harmful investment.
Have you ever run into people that are excited about selling a revolutionary product that will help you in some way? And, you can sign up you too can be a independent distributor? You are probably being approached by someone using Multi-Level Marketing (MLM) or Pyramid Marketing. Do not get hooked on any of these schemes, yhey are bad news!
Here is why:The goal of a company that uses MLM is not to make a profit on the product, but to exploit relationships for financial gain. Basically, they are not making money on the product because it is at best sub-standard or you can get it somewhere else. The product itself is basically the front for the true money making pyramid scheme in the back.
These companies make money by creating what is called a “down-line”. You make more money by recruiting more recruiters, because in order to become a recruiter you need to “invest” a certain amount of money or even buy a certain amount of the product; thereby forcing you to pony up to the company and everyone else up the chain above you.
You should determine the answers to these questions in order to see if an offer is legitimate:
- “How are you making money?” (If they say it’s by selling the product, move to the next question)
- “What do you spend the bulk of your time doing?” (Recruiting or selling product)
- “How much product do you sell a day? Month? Year?” (If they don’t know, it’s because everyone else they recruit “sells” the product. Then it is obvious that the product is not their foundation to success.)
These are good qualifying questions to ask and you should go no further with this company. At least do not sign up as a “distributor,” or “consultant,” or “network marketer.” If you really want the product just buy the product and move on.
There are some great ways to make money on the side though, and we’ll explore some of them next week. You can make money online, with only a very small investment (and yes, this is a real investment, not just a fee!). So we’ll start talking about that next week!
