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I just went to the 'wiki' to see how it would define "Network Marketing". Interesting what I found.
First, it directed me to "Multi-level marketing". Now read what it has to say.
Overview
In a typical multi-level marketing or network marketing arrangement, individuals associate with a parent company as an independent contractor or franchisee and are compensated based on their sales of products or service, as well as the sales achieved by those they bring into the business. This is like many franchise companies where royalties are paid from the sales of individual franchise operations to the franchisor as well as to an area or region manager.
In a legitimate MLM company, commissions are earned only on sales of the company's products or services. No money may be earned from recruiting alone ("sign-up fees"). One must analyze the compensation plan to determine whether participants are paid from actual sales to customers and not from money received from new recruits. If participants are paid primarily from money received from new recruits, then the company is an illegal pyramid or Ponzi scheme.
Some less legitimate companies produce revenues primarily by attracting new participants with the hope of reward and selling them products or services of dubious value at inflated prices, as opposed to selling products or services consumers would purchase at the given price without regard to the opportunity attached. One must evaluate the products or services and determine if a significant percentage of consumers would continue to purchase them if the participants do not make money from the underlying opportunity. If the products or services have dubious value or if the participants must purchase excessive quantities without reasonable intent to use or resell said items, then the company is likely a thinly veiled illegal pyramid scheme.
Multi-level marketing has a recognized image problem due to the fact that it is often difficult to distinguish legitimate MLMs from illegal scams such as pyramid or Ponzi schemes. MLM businesses operate legitimately in the United States in all 50 states and in more than 100 other countries, and 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.
By what I am reading I must ask where does this place programs that are Matrix, forced matrix and any other program that counts on paying members to be the source of income into the program?
I know of one program that promotes a membership price of $995.00 and tells you that you will be paid $900.00 from every one that joins under you. First off, this is price gouging and is illegal. The membership and any possible product is so overinflated. And it purely states you get $900.00 from every $995.00 ?sale?
Compensation plans also tell alot and the more confusing they are the closer they are to being a scam is what history shows.
And these so called Fast-track bonuses, again a buy in on membership to raise fast money, not a product.
Views and opinions?
Kenneth R Sword Jr
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