Actually, multi-level marketing is not a scam as long as distributors are earning commissions based on product sales and not on just signing up new distributors. Multi-level marketing is not a pyramid scheme either as a typical downline does not resemble a pyramid anymore than a tree does. Even if it did resemble a pyramid it would not be a pyramid scheme as ponzi schemes (another name for pyramid schemes) tend to take money from people under false pretenses to give to other people. A legitimate multi-level marketing company provides a valued product in return for money, so there is no loss to the purchaser.
Below is a Wikipedia article on multi-level marketing for more information:
http://en.wikipedia.org/wiki/Multi-level_marketing
Thursday, December 3, 2009
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An update: I am not an attorney so this article may not be technically accurate. I have learned that in some states there may be a requirement that a certain percentage of sales must go to the end customer. This is something that would be more of a concern to the MLM company than to the individual distributor.
However, if you are looking at joining a newer company, I would make sure that they are following the laws in your state. It is disheartening to build your business only to find out that the company is shutting down. I know from experience.
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