The Truth About Multi-level Marketing Businesses

The thin line between an MLM and a pyramid scheme.

Photo by Karine Germain on Unsplash

After being approached by a couple of people on Instagram and Facebook about business opportunities and the ability to earn income from the comfort of my own home, this intrigued me. I decided to do research on the companies that they worked for and found out that they were Multil-level Marketing Businesses.

Definition:

According to Investopedia MLM companies are defined as:

‘A strategy that direct sales companies use to encourage existing distributors to recruit new distributors and buy the products.

So a person can make money in two ways:

• By selling the MLM’s products yourself to customers who are not involved in the MLM.
• By recruiting new distributors and earning commissions based on what they buy and their sales to retail customers.

Examples of MLM businesses

• Juice Plus
• Monat
• Avon
• Herbalife Ltd
• The Body Shop

Legitimacy

MLM Businesses are legitimate if the products are being sold directly to consumers. But if…