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| Home | Resources | Work From Home Company | Is MLM the same as a Pyramid scheme? By: Chris Stirling Copyright 2006 Top-Work-From-Home-Directory.com If you are considering an MLM opportunity but are unsure if it is a legitimate business opportunity or a pyramid schemes be careful. While the multi level marketing business model is legal and lucrative for many a pyramid scheme is just the opposite. They are illegal and only those at the top make the big money. MLM offers the opportunity to become involved in a system for distributing products to consumers. Unlike the person starting a business from scratch, the MLM participant has the support of a MLM company that supplies the products and sometimes offers training as well. The entire purpose of MLM is to move product. The theory behind MLM is that the larger the network of distributors, the more product the business will be able to sell. A pyramid scheme is just the opposite. The entire design of a pyramid scheme is to get your money and then use you to recruit others to get their money. On the surface it is difficult to tell if the opportunity you are considering joining is legitimate or a scam. Here are a few indicators that the company is a pyramid scheme and not a legitimate business. If you are you required to "invest" a large sum of money up front to become a member before you can sell any products then stay away. Legitimate MLM businesses do NOT require large start up costs. Be careful often pyramid schemes will call this cost an inventory charge – again this is not require this. Look to see if the company will back any unsold inventory you purchase to start up your business. Legitimate MLM companies will offer and stick to inventory buy-backs for at least 80% of what you paid. What are the products the company is selling and do you feel there is a legitimate market for this product or service. To be successful any successful business must have a market to sell to, otherwise they will only make money selling to you. If the company doesn't seem to have any interest in the consumer demand for its products, don't sign up. What does the company focus on – selling the product or recruiting other distributors? If the main focus of the plan is to recruit other members and you are paid a bonus just for signing people up then stay away. A successful business should be focused on selling their product or service. They will provide you with all the tools to help you sell the products. As always, when you're investigating a potential business opportunity, you'll want to gather all the information you can about the MLM company's products and operations. Being part of a successful MLM company can be both profitable and fun, but unfortunately, some purported MLM opportunities are actually pyramid schemes designed to flatten both your wallet and your dream of running a business. Do your due diligence before putting any money down and you should be safe. Article Source: Articles Engine Chris Stirling is the owner of http://www.top-work-from-home-directory.com . His website is geared for people who are interested in finding an online work at home opportunity or finding the perfect Network Marketing Business |