Taking into account this simple comparative list, you will be able to differentiate between a real Multilevel Marketing company and a pyramid.
Observe the following factors to discover if it is a pyramid::
1 - The amount of the initial investment to start: If the economic amount to start in the company is very high. It can be seen as an investment for inventory, however, MLM companies do not usually require large amounts to join and purchase their products or start kits.
2 - Articles buyback guarantees: The majority of authentic MLM companies adheres to repurchase agreements of articles not sold, retaining only a percentage of what the person initially paid.
3 - Focus and attention to the offered product's market: All companies in Multilevel Marketing focus on the existence or creation of a market for their products. When this aspect is not mentioned or is not given a clear focus, it is not convenient to sign up.
4 - The main objective is the recruitment rather than the sale of the product: MLM companies are mainly focused on the sale of the product. If the main focus is recruitment and not the product, it is not a good sign.
Two important clues to decipher this are:
The plan is designed so that you receive more profits for the recruitment than for the products' sales.
High benefits are offered by recruiting and recruiting new members.
If all these points are analyzed, it will be possible to discover if it is a legitimate company or a fraudulent structure.
This post is based on the article "The Difference Between MLM and Pyramid Schemes" by Susan Ward