I have mentioned MLM a couple of times in some of my articles. MLM stands for multi-level marketing and many of you could be familiar with it. It is an approach where one recruits people to sell a product or service and get commissions for each recruitee and sales they subsequently make, along with revenue from their own individual sales. It is in essence a distribution model that businesses or companies use to market or push their products or services. You often hear me emphasising the importance of being careful to not get into a Ponzi scheme. This is because a Ponzi scheme can be disguised as an MLM. So how then do you know if a venture is a legit MLM scheme? Well, that is what this article is all about.
Good Or High-Quality Products Or Services
The presence of products is actually a good first sign but you do not end there. Whenever there is no tangible product or service, run! A legit MLM will both have and deal with good or high-quality products or services. They actually work and are reliable when used. When it is shady the products or services will be substandard or even non-existent. In some cases, the first batches will be legit and all other subsequent ones will be substandard. This can stem from the thrust to push as many volumes as possible. So you will have to find out if the products or services do actually work. In some cases, you will have to ascertain they even exist because they might not even be available. There have been cases where people placed orders and they never came.
Provable Product Or Service Claims
One common thing you will find in Ponzi schemes is an outrageous product or service claims. I can refer to wellness products here; this niche is actually one of the common ones in MLM nowadays. So you can find outrageous claims being made e.g. a slimming tea that produces results in 7 days. Since most people will be eager to get results they will gullible. Legit MLM can make product or service claims but they will be provable. There will be a proven track record that people can reference.
Reasonable Push To Sell
MLM is all about sales; the core idea is to push sales. However, if an MLM is legit the push to sell will be reasonable. What I mean is that when it is shady you will be pushed to buy stock and sell under extreme pressure. This is will be borne out of the need for the quick cash in and disappear. So you must be critical of this intense pressure aspect- it is usually a tell-tale sign. Especially if the brand has only been around for a short while, be careful. A legit MLM does nudge you to buy and sell, to push volumes, but there is not crazy pressure to do so.
Consistent Customer Engagement
Communication is an important issue when it comes to MLM. This is because there is a constant need to address customers’ questions, queries, complaints, and so on. A legit MLM is always on top of this aspect – they consistently engage with their customers. If it is the opposite of this then that can be a red flag. You see, questions are liberators of knowledge and as such anyone hiding something shuns being engaged on anything. Another thing here can also be dealing with faceless individuals – that is not a good sign. A proper MLM has working and traceable customer service channels.
Average Or Low Entry And Operating Costs
Under normal circumstances, MLM involves perpetual recruiting. It will also entail continuous training and development from time to time. That is why workshops and seminars might be a common occurrence. However, those aspects should either be free or reasonably priced. The moment the costs to enter or sign up and to continuously operate are sky-high it might be a red flag. If it is extremely expensive that could be because the perpetrators want to cash in big-time from those activities. If there is constant pressure to pay huge amounts of money for such activities, be careful. Legit MLMs usually find ways of ensuring such activities are free of charge. When you have to pay something it might be because it is inevitable and will usually be reasonable.
Good Public Reviews Or Ratings
The mark of a legit brand or entity is always, in part, good public reviews. This will be reviews or ratings on online platforms and also amongst your peers or social circle. Any shady scheme that has ever come along always died early because of negative public reviews. So when you recurrently hear of the brand being spoken of negatively in public that is a red flag. A legit MLM will have good reviews or ratings and will last considerably long
A legit MLM tells you things as they are when advertising to you. The common thing that happens with shady ones is the use of misleading rhetoric or terms. You might have come across schemes that pose as offering you a job opportunity. The truth is MLM is not really a job but it is a business and business is all about risk-taking. The use of the term job will be to give you a false sense of security and guarantee of income. You will also come across unreasonable guarantees of income with little to no effort. A legit MLM is never like that.
The 8th sign is on traceable online and brick and mortar presence. A legit MLM will have a traceable online presence and faces to the brand. They will even have known and traceable offices or outlets where applicable. They have a digital footprint and a physical one too. If there is no traceability and the brand is faceless you might be in for a rude awakening later. Forewarned is forearmed!