Thanks to the world of internet advertising, hundreds of opportunities
have popped up that allow individuals make money online. A prevalent method of making money online is the
multi-level marketing scheme.
Multi-level marketing schemes are marketing programs that use
independent markets to sell products. For every product you sell, you receive a
cut of the profit in recognition of your efforts. Amway, Avon, and Tupperware
are just some of the examples of companies that operate authentic multi-level marketing schemes.
However, because the internet is open to both the honest and the
dishonest, there are also pyramid schemes that hope to take advantage of the
structure laid down by MLM (multi-level marketing) schemes to try and MLM scam
individuals. These pyramid schemes lure you in with
the promise of future income but
never with anything to show for it.Let’s take a look at the ways of identifying a pyramid scheme and how you can
avoid falling for one. But first, let’s examine what a pyramid scheme is.
Pyramid Schemes – What are
they?
Before we begin identifying the signs you need to look out for, we first need to explain the
concept of a pyramid scheme so you can easily differentiate it from legitimate
MLM programs.
Pyramid schemes are typically illegal institutions that work by having
members pay a fixed sum before they can join the program. Once you pay your
fee, you’re automatically a recruiter. Pyramid schemes use recruiters to
increase the income they get from their members feed.While there are some pyramid schemes with an actual product, the primary
objective it sells to its members is more often recruitment. Recruiting offers
bonuses and advantages so the more you recruit, the more you get for joining
the scheme.The reason why pyramid schemes are unsustainable and end up failing is that they have nothing to sell, so there’s no generation of income. The
only source of profit they get is from new members joining in and sooner or later; the recruitment well will dry out.Pyramid schemes rely mostly on the relationships of their already
existing members to grow. Members are convinced to invite family and friends to
participate as well. Sadly when the recruitment dries up, it can cause
relationships to tear and strain as the new members feel the existing ones cheated them. Knowing how to
identify a pyramid scheme remains the simplest way
of avoiding this scam.
How to
Identify a Pyramid Scheme
No matter how hard they try to hide it, pyramid schemes always end up
leaving tells. Here are few that can help you figure out if it’s real or you’re being set up for a scam.
1. The
major focus is on recruiting
If the focus of the program seems to be on recruiting and not on sales
of any product, then that’s a red flag. If the focus is always on getting more
team members, then you should be wary.
2. Little
or no training
If there’s no training being offered,
or your questions are being brushed off, chances are it’s a pyramid scheme.
Furthermore, if the training focuses on how to be a better recruiter, and is
never on real business tips and
techniques, then you’re probably looking at a pyramid scheme.
3. Added
pressure to pay for more
Pyramid schemes always have higher packages with bigger bonuses that
they keep urging their members to buy. If
you’re feeling pressured to move to a “business” or an “elite” package, then
you’re looking at a pyramid scheme
4. Appears
too good to be true
Like most things in life, it looks too good to be true,
then it probably is a scam. If
they’re always going on about their fantastic
product, or how fast it can make you rich, then you’re probably being scammed.
Ways to Avoid Falling for
Pyramid Schemes
It is always better to be safe than sorry. So, whenever you come across
a multi-level marketing program, and even if they don’t show any of the signs
of a pyramid scheme, you should still tread
carefully and take some time to find out about the program before committing. The easiest way to differentiate an authentic multi-level marketing
program from a scam is to examine what they offer. If it appears too good to be true, then it probably is. Chances
are, it’s a pyramid scheme trying to appeal to victims using their need for
money.
Also, before committing to any program, even if you think it is
legitimate, you should always seek out more information about the company. You can carry out an online search to see if there are
any suspicions of it being a pyramid scheme. You can also check their local
office, fair trading, or any other
commercial institution to check if the company is legitimate or not.
No comments:
Post a Comment