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 others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation. Other terms for MLM include network marketing, pyramid selling, and referral marketing.
MLM businesses operate in the United States in all 50 states, and in more than 100 other countries. New businesses may use terms like "affiliate marketing" or "home-based business franchising". However, many pyramid schemes try to present themselves as legitimate MLM businesses.
The United States Federal Trade Commission states "Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. They're actually illegal pyramid schemes. Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people - except perhaps those at the very top of the pyramid - end up empty-handed."
The FTC warns "Not all multilevel marketing plans are legitimate. Some are pyramid schemes. It's best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products." and states that research is your best tool, giving eight steps to follow:
· 1) Find — and study — the company’s track record
· 2) Learn about the product
· 3) Ask questions
· 4) Understand any restrictions
· 5) Talk to other distributors (beware of shills)
· 6) Consider using a friend or adviser as a neutral sounding board or for a gut check
· 7) Take your time
· 8) Think about whether this plan suits your talents and goals
However, there are people who hold that all MLMs are essentially pyramid schemes even if they are legal.
没有评论:
发表评论