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Published:  2012-10-16 Views:  516
Author:  Justin
Published in:  Beauty
Network Marketing and Pyramid Schemes: What's the difference?

Unfortunately, many fraudsters disguise illegal pyramid schemes as legitimate Network Marketing plans. Consumers approached to participate in a network marketing plan should consult the chart below to help determine whether they are being asked to join a legitimate network marketing plan or a dangerous pyramid scheme.

Network Marketing Plan Business Focus is on sales of products and services to end-users (NOT other distributors)

Primarily based on the sales of products and services by the distributor. Perhaps some percentage of income from sales by downline recruits.

Household goods or services that consumers typically use in everyday life. Goods and services are priced competitively with traditional retail outlets.

Start up cost . Low or none at all.

Low-pressure, eager to answer questions about the business and provide detailed information in writing upon request, such as a business and marketing plan

Eager to provide references who provide honest evaluations of the viability of the MLM plan and the work necessary to succeed.

Provides detailed information about the work involved. Offers no promise of easy riches. Does not use high-pressure sales tactics.

Has a good report with the Better Bsuiness Bureau (BBB) and consumer protection agencies and is registered with the local Chamber of Commerce. Provides detailed information on their Web site AND provides hard copies of annual or quarterly reports, business plans, and marketing materials on demand, for little or no charge.

Buys back unsold merchandise at 90% or more of purchase price.

Easily accomplished and accompanied by a reasonable merchandise buy-back program.

Sustainable, based on repeat sales of products and service

Profits are based on time and effort devoted to selling goods or services to consumers.

It's a legal business opportunity that may or may not be a good fit for you.

Pyramid Scheme

Business Focus is on Recruiting new members

Often a thinly-veiled and poorly-made "miracle" product or service that few consumers want or need. Merchandise is typically priced well above comparable products sold in retail stores.

Start up cost are substantial, often involving recurring "membership" fees or expensive "educational," "training," or "advertising" materials that can easily be found free of charge elsewhere.

High pressure, with a constant focus on recruiting new members of the scheme. Hard to reach when questions arise.

Unwilling or unable to provide references or only provides references who themselves attempt to recruit a caller.

Involves promises of large profits with minimal work, often in high-pressure seminar environments. Uses phrases like "limited time offer," "can't miss opportunity," and "guaranteed income."

Not registered with the BBB or local Chamber of Commerce. Information about the company is scarce or limited to a Web site.

Refuses to buy back merchandise at all or buys back at significantly less than the wholesale price

Difficult, with high-pressure tactics used to keep participants in the scheme, possibly accompanied by pitches to spend more money on "training" to improve performance.

Doomed to collapse

The vast majority of participants lose money.

It's illegal. Don't waste your money.

http://www.empowernetwork.com/justinmh1634/
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