Avoid Losing Money to Multi-Level Marketing

As more people look for ways to make money from home or have dreams of earning income that isn’t from a traditional 9-5, it can be easy for someone to end up involved in MLM scams.

What is Multi-Level Marketing?

Multi-level marketing is a term used to describe a specific business model where companies sell their products through “sales representatives” rather than directly to consumers. And these “reps” also recruit new members and are paid percentages of their sales as well.

How Does  Multi-Level Marketing Work?

Usually, it starts with someone inviting you to a sales event and presenting the product, lifestyle of a business owner and the various rewards you can earn as a sales rep.

Why is MLM bad?

Not all MLM companies are bad, but generally this business model can cause people to lose money, ruin relationships with friends and family, and can impact your emotional and physical health.

The Warning Signs of MLM Scams

If you do find a direct sales company that interests you, make sure you’ve understand these warning signs and red flags that could signal a multi-level marketing scam.

1. Investing a large amount of upfront money

Any “business opportunity” that requires you to invest a large amount of money upfront is suspicious. If they require you to invest hundreds or thousands of dollars, it sounds like an MLM scam.

2. Emphasis on recruitment

Pyramid schemes rely more on recruitment than selling products. If the other people in the business want you to focus on recruiting others rather than selling the product, that’s a sign that it’s a scam.

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