When people hear of "multilevel marketing", they start to get the feeling of getting scammed or become a part of a scam, in the least. This isn't an uncommon reaction as there have been a handful of infamous pyramiding scams which have victimized a lot of innocent people. But in the business model sense, mlm marketing is really a legitimate business.
One thing is certain: the main difference between the two is that mlm marketing is a legitimate business model, while pyramiding scheme IS a scam and IS definitely illegal - not to mention immoral and downright dirty. In layman's terms, multilevel marketing is a highly social business model that seeks to cut out the middle man and lower the overhead cost, so that the end consumer isn't paying for the storefront's operation expenses, including labor, utilities, and even the traditional advertising media. Pyramiding schemes, on the other hand, will want you to invest your money on the possibility of big rewards for small amounts, but is actually just a transfer of money from the "downline" to the "upline" (to be explained later).
If it's Too Good to be True...
It's probably a pyramid scheme. The confusion between the two systems as earlier explained stems mostly from pyramiding schemes that disguise themselves as legitimate mlm marketing businesses. These pyramiding schemes use the same vocabulary and even the process of building up your network.
In both business models, you have to sell some kind of product, you will create a "marketing network", you will either be "sponsored" by your "upline", or you will sponsor a "downline" with the idea that the "upline" gets commissions from the sales of the "downline." The first thing that would tell you that you are in a legitimate mlm marketing business is that the commissions from your "downline" are just a plus, but the bulk of your profits come from YOUR sales and YOUR hard work.
To Enter the Market
Multilevel marketing is a relatively easy business to get into, sometimes for investments as low as $29, which is in no way saying that it's an easy business to thrive in. On the plus side of the equation, it is a very flexible business environment. You can stay at home all day in your jammies and still make a decent enough living. Formal education isn't even necessary, but a bit of techno savvy does help.
One thing is certain: the main difference between the two is that mlm marketing is a legitimate business model, while pyramiding scheme IS a scam and IS definitely illegal - not to mention immoral and downright dirty. In layman's terms, multilevel marketing is a highly social business model that seeks to cut out the middle man and lower the overhead cost, so that the end consumer isn't paying for the storefront's operation expenses, including labor, utilities, and even the traditional advertising media. Pyramiding schemes, on the other hand, will want you to invest your money on the possibility of big rewards for small amounts, but is actually just a transfer of money from the "downline" to the "upline" (to be explained later).
If it's Too Good to be True...
It's probably a pyramid scheme. The confusion between the two systems as earlier explained stems mostly from pyramiding schemes that disguise themselves as legitimate mlm marketing businesses. These pyramiding schemes use the same vocabulary and even the process of building up your network.
In both business models, you have to sell some kind of product, you will create a "marketing network", you will either be "sponsored" by your "upline", or you will sponsor a "downline" with the idea that the "upline" gets commissions from the sales of the "downline." The first thing that would tell you that you are in a legitimate mlm marketing business is that the commissions from your "downline" are just a plus, but the bulk of your profits come from YOUR sales and YOUR hard work.
To Enter the Market
Multilevel marketing is a relatively easy business to get into, sometimes for investments as low as $29, which is in no way saying that it's an easy business to thrive in. On the plus side of the equation, it is a very flexible business environment. You can stay at home all day in your jammies and still make a decent enough living. Formal education isn't even necessary, but a bit of techno savvy does help.
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