The Wolf In Sheep’s Clothing
A lot of marketing programs operate with Multi Level Marketing (MLM) scheme.
This strategy to operate is old and it isn’t a scam at its origin.
Since few years, some Internet entrepreneurs did use it, to fill their pockets with only one product: The teaching of how you can sell this teaching program.
The most known (and successful for the owners and top affiliates) is probab Empower Network.
What is MLM?
“Multi-level marketing (MLM) is a marketing strategy, in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “down line”, and can provide multiple levels of compensation. Other terms used for MLM include pyramid selling, network marketing and referral marketing. According to US FTC, some MLM plans get their benefit from exploiting other members of the network, and they are illegal pyramid schemes.”
Source: Wikipedia – http://en.wikipedia.org/wiki/Multi-level_marketing
Now, you can tell me that a lot of affiliate programs are operating with multi level compensation plans, and you are right.
A lot of us, your neighbours perhaps, or even your grandma, when she was selling Avon products, where active in MLM programs. And a lot of these programs are legit. But before you sign in for an affiliate MLM program, you should know how to separate chaff from wheat.
I give you here 6 signs that are pointing more or less to MLM scam:
Recruiting comes before selling.
Most of MLM scammers put their focus more on recruiting new « members » than selling their product(s). If they ask you to recruit new affiliates and when these affiliates should also be your buyers, then hoist the red flag.
Poor or only hard selling training.
What are the expectations when a company offers you a program to learn affiliate Internet marketing? You should learn how to create your business, learn about the tools like creating a website; finding a niche and products to operate, ; learning some SEO techniques and how to converse your visitors to customers. With these MLM programs, they first teach you how to recruit new affiliates. They will only tell you how to sell their products. They will overwhelm you with a lot of psychological pressure, that’s what they call support. If you’re not reacting correctly (in their eyes), they will try to drag you down.
Pressure to buy up sells.
For most of these companies, you can only sell products you bought yourself. Normally they start at a low level (from $ 25.- to 49.-). But after a short period, they make a lot of pressure to buy the more expensive programs (starting at a few hundreds to about ten thousand dollars), sometimes this will end with real psycho terror.
They will offer you a credit card leverage (using your credit card limit) or even making a home equity loan to pay for this “business investment”.
This is really the moment you should quit when you thoughtless did subscribed.
Hard selling tactics.
If you have the impression that your MLM representative (often called “your sponsor”) wants to make a high-pressure sale, that he wants a direct reaction on a special limited price offer, you can be sure that it is scam. A normal serious company will give you the time to talk with your family, and sleep on your decision.
To good to be true.
As for everything you buy, you should pass the too good to be true “smell test”.
Are the promises of the product enormous and difficult to prove? Is there a real hype about the product without anything to back it up? Oh yes, they will tell that they have earned a lot of money and show statements of their bank accounts. They will show a lot of testimonials; most of these testimonials are fakes, with low budget actors. Hello, where is your red flag?
The one hundred percent commission lie.
You will get 100% commission of all your sales! Yes, some of these MLM scams do promise this nonsense. If you get 100% of the sales, what is their revenue?
No, after a while they will explain, that you get 100% on your first five referrals buying the product. After that you will only get 100% on every fifth sale.
You will also get 100% of the sales of your referral, but also only on every fifth or tenth sale. But it’s only true for the products you also bought: If you only subscribe for the 25 bucks product, you will only get a commission on this product, even if your referral is buying or selling the $10,000 product. This commission will go to your “sponsor”.
So, before starting in Internet marketing, be sure of your decision. There are really some good products and programs, where you can join. I personally can recommend you two I have tested and where I’m still a member:
To fulfil my personal business ethics I must inform you, that both programs are affiliate products of mine. This allows me to continue, offering useful information, free of charge to build your Internet Business.
If you have any experiences (good or bad) in MLM programs, don’t hesitate and share them below with a comment.