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The
Bottom Line About
Multilevel
Marketing Plans
8
Points to use when Evaluating a Plan.
Multilevel or "network"
marketing plans are a way of selling goods or services through
distributors. These plans typically promise that if you sign up as a
distributor, you'll receive commissions - for your sales and those
of the people you recruit to become distributors. These recruits
sometimes are referred to as your "downline."
Some multilevel marketing plans are
legitimate. However, others are illegal pyramid schemes. In
pyramids, commissions are based on the number of distributors
recruited. Most of the product sales are made to these distributors
- not to consumers in general. The underlying goods and services,
which vary from vitamins to car leases, serve only to make the
schemes look legitimate.
Joining a pyramid is risky because
the vast majority of participants lose money to pay for the rewards
of a lucky few. Most people end up with nothing to show for their
money except the expensive products or marketing materials they're
pressured to buy.
If you're thinking about joining what
appears to be a legitimate multilevel marketing plan, take time to
learn about the plan. What's the company's track record? What
products does it sell? Does it sell products to the public-at-large?
Does it have the evidence to back up the claims it makes about its
product? Is the product competitively priced? Is it likely to appeal
to a large customer base? How much is the investment to join the
plan? Is there a minimum monthly sales commitment to earn a
commission? Will you be required to recruit new distributors to earn
your commission?
Be skeptical if a distributor tells
you that for the price of a "start-up kit" of inventory
and sales literature - and sometimes a commitment to sell a specific
amount of the product or service each month - you'll be on the road
to riches. Often consumers spend a lot of money to "build their
business" by participating in training programs, buying sales
leads or purchasing the products themselves. Too often, these
purchases are all they ever see for their investments.
Your Responsibilities
If you decide to become a
distributor, you are legally responsible for the claims you make
about the company, its product and the business opportunities it
offers. That applies even if you're repeating claims you read in a
company brochure or advertising flyer. The Federal Trade Commission
advises you to verify the research behind any claims about a
product's performance before repeating those claims to a potential
customer.
In addition, if you solicit new
distributors, you are responsible for the claims you make about a
distributor's earnings potential. Be sure to represent the
opportunity honestly and avoid making unrealistic promises. If those
promises fall through, remember that you could be held liable.
8
Points to use when Evaluating a Plan.
- The FTC suggests that you use
common sense when evaluating a multilevel marketing opportunity
and consider these tips as you make your decision:
- Avoid any plan that includes
commissions for recruiting additional distributors. It may be an
illegal pyramid.
- Beware of plans that ask new
distributors to purchase expensive products and marketing
materials. These plans may be pyramids in disguise.
- Be cautious of plans that claim
you will make money through continued growth of your downline,
that is, the number of distributors you recruit.
- Beware of plans that claim to sell
miracle products or promise enormous earnings. Ask the promoter
to substantiate claims.
- Beware of shills -
"decoy" references paid by a plan's promoter to lie
about their earnings through the plan.
- Don't pay or sign any contracts in
an "opportunity meeting" or any other pressure-filled
situation. Insist on taking your time to think over your
decision. Talk it over with a family member, friend, accountant
or lawyer.
- Do your homework! Check with your
local Better Business Bureau and state Attorney General about
any plan you're considering - especially when the claims about
the product or your potential earnings seem too good to be true.
Remember that no matter how good a
product and how solid a multilevel marketing plan may be, you'll
need to invest sweat equity as well as dollars for your investment
to pay off.
Our
advise: Stay away from Pyramid
Schemes Look
into the Internet Portal Industry. Internet Portals are useful
and come with a website builder that you can create a website to
promote and sell anything your want and link it to your portal and a
variety of online stores to choose from. If you have any
questions drop us a note.
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Learn More Click Here
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