Is Your MLM/Multilevel Marketing Business Legitimate?

Is Your MLM/Multilevel Marketing Business Legitimate?
By
Ted Riley

INTRODUCTION

A legitimate multilevel marketing business is a great way to
get a legitimate residual income that could change your life
from the 9-5 rut to a life of financial freedom. But there are
many pitfalls out there that will make achieving this
difficult. (Or even illegal depending on the MLM you decide to
sign up with.)

There are several ways for a person to ascertain whether or not
a multi level marketing company is or is not a legitimate MLM.
There are a few things that can be checked to make sure you
are not going to get involved in something that breaks the
fifty or so statutes that govern this type of company.

TYPE OF PRODUCT

One of the ways to separate the legitimate MLM from the scams
is by looking at the type of product that the multilevel
marketing home business will provide. Many multilevel
marketing home business ideas work on the principle that they
will be charging way too much for the service or product they
will provide. So check that the company is charging a fair
price for their product. Also check that you can become
involved with the company without having to pay for a huge
amount of inventory. This is also the way that many scams
operate, on the idea of selling to people who think that they
will be selling in large volume from the get go and not caring
what happens to the investor after that. If you have to invest
thousands in a multilevel marketing idea then it is best to
head in the other direction fast.

It is best to ensure that you can be a sales representative
with little or no more than the purchase of a sales kit or
demonstration materials.

COMPENSATION PLAN

Looking at the compensation plans of your prospective
multilevel marketing company is one fo the best indicators as
to whether or not it is a scam. Check whether the compensation
plan pays bonuses or commissions purely on the basis of
recruiting more people into the company. If it does, it is
illegal. It is also not a legitimate MLM if it pays
headhunting fees as this is also illegal.

A home business idea such as a legitimate MLM is great because
of the relatively low financial risk involved. This may not
ring true to the work at home business ideas you have seen but
the good multi level marketing companies will buy back the
sales kit and any re-sellable materials from any of those who
wish to cancel. This is actually required by law so have a
look at this before handing any money over.

PERSONAL USE OF GOODS

The FTC also rejects the idea of personal use of the goods or
services that you will be providing as a legitimate retail
sale. But the debate continues over whether or not the sales
to non-participants and purchases in reasonable amounts are
retail. There are big grey areas in the world of multilevel
marketing so keep abreast of the laws and statutes in your
state.

TRAINING

Probably the single best way to ascertain whether or not a
company is a legitimate MLM is to look at the training that
will be provided in the way of sales and recruitment. Any
company worth its salt will want to have people who know what
they are doing. So they will provide training to those who
have little or no idea how to sell or market a product.

Also, having a clear idea as to what you will be doing is
important in choosing a work at home multilevel marketing
business. It is astounding to see how many companies do not
stipulate whether or not you will be in a selling,
supervising, distributing or soliciting role which is required
under federal law.

Ted Riley is an entrepreneur and educator interested in
teaching others on the benefits and rewards of having your own
home business. He writes frequently for the web site "A
Grandmother`s Business", a web site dedicated to the needs and
equirements of the mature woman entrepreneur and job-seeker.
To see more articles like this visit: http://www.grandmabiz.
com/ (http://www.grandmabiz.com/)

Paul White is a 42 year old former teacher. He now helps people
all around the world to become wealthy online. Whatever you
are selling, visit the popular site: http://www.profitmountain.
com (http://www.profitmountain.com) and if you subscribe to
Profit Mountain`s FREE wealth building newsletter, you will
also receive FREE advertising for the next 12 months! (Worth
$200!) as well as loads of other things!