How to tell the difference between Ponzi Schemes and MLM
Before the differences, let me explain what they are.
Multi-Level Marketing(MLM) also known as network marketing is a business that offers you the opportunity to become involved in a system for distributing products to consumers. Unlike the person starting a business from scratch, where you have to do everything by yourself. This type of business has an existing support system which includes Sales and personal development trainings.
As a network marketer, you make money by selling products (solution to people’s problems) and building a team of distributors.
The sole purpose of MLM is to get these Solution (products) to as many end users as possible.
Whereas, in Ponzi schemes, you make money only when you recruit new people. Their focus is on getting as many people as possible onboard.
This alone should be enough to tell the difference but I understand that most Ponzi schemes now masquerade as Networking business. So I’ll show you how to spot the difference.
- MLM has VERIFIABLE products whereas Ponzi schemes have no verifiable products. In a situation where they do have products, these products are often plagiarized or worthless and do not solve any real problem.
- MLM products have a ready market as most MLM products are born out of years of research to solve a particular problem. The reverse is the case for Ponzi schemes.
- MLM companies adhere strictly to the laws of any country it operates. Ponzi schemes do not. They may not even have a verifiable presence in your country.
- The theory behind networking is that the larger the network of distributors, the more product the business will be able to sell. The purpose of Ponzi/pyramid schemes is to get your money, promise you a certain % and then use you to get more people. Ponzi schemes focus on recruiting people without necessarily offering any product/service in return.
- With MLM, you make money whether you choose to recruit or not. (Selling products which are usually high quality and in demand) With Ponzi schemes, you make money only when you introduce new people.
- Most MLM require you to buy a minimum quantity of products which automatically gives you access to becoming a distributor. Ponzi schemes may not give you any product in return for your money.
The bottom line is to do your research whenever you want to join any business. Don’t be fooled by the flashy cars and houses flaunted by the so called beneficiaries.
Every legitimate business requires some level of commitment for it to grow.
If are not ready to put in the work, then don’t start. Because you’ll come back crying they scammed you.
Every business thrives on people. The more customers you can get to patronize your business, the more money you’ll make.
If a business sounds too good to be true, it probably is.
Before you jump in, verify that the products are high quality.
𝐈 𝐜𝐚𝐧 𝐬𝐡𝐨𝐰 𝐲𝐨𝐮 𝐡𝐨𝐰 𝐭𝐨 𝐠𝐞𝐭 𝐬𝐭𝐚𝐫𝐭𝐞𝐝 𝐰𝐢𝐭𝐡 𝐚 𝐋𝐄𝐆𝐈𝐓𝐈𝐌𝐀𝐓𝐄 𝐍𝐄𝐓𝐖𝐎𝐑𝐊𝐈𝐍𝐆 𝐁𝐔𝐒𝐈𝐍𝐄𝐒𝐒 𝐰𝐢𝐭𝐡 𝐚 𝐩𝐫𝐨𝐯𝐞𝐧 𝐬𝐲𝐬𝐭𝐞𝐦 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐭𝐨 𝐬𝐞𝐭 𝐲𝐨𝐮 𝐨𝐧 𝐭𝐡𝐞 𝐩𝐚𝐭𝐡 𝐭𝐨 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐟𝐫𝐞𝐞𝐝𝐨𝐦 𝐢𝐟 𝐲𝐨𝐮 𝐟𝐨𝐥𝐥𝐨𝐰 𝐭𝐡𝐞 𝐏𝐑𝐎𝐂𝐄𝐒𝐒.
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