Deconstructing the Pyramid: Legitimate Network Marketing

by Andrew Rossillo
http://contentcrooner.com

Known by many names-multi-level marketing (MLM), referral marketing, word-of-mouth marketing, interactive distribution, relationship marketing-network marketing is a dynamic business strategy where members considered to be individual distributors part of a sales force for a parent company are rewarded for both sales made on the first, personal level as well as for revenue generated by individuals they recruit as distributors beneath them who form what's referred to as their downline or legs.

But it has long been considered a pariah of the business world and heavily criticized for its frequent association with Ponzi schemes, chain letters, and consumer fraud scams. One particular negative connotation that has been especially hard for network marketing to shake is the pyramid scheme because the structure of the hierarchy of multiple levels naturally mirrors the shape of a pyramid as a distributor continues to build their downline beneath them.

How can you determine the legitimacy of a network marketing opportunity? While there definitely are scams and less-than-honest network marketing groups out there, there are also plenty of legitimate opportunities that do reward their members with lucrative compensation plans.

Best Ways to Verify the Reputation of Network Marketing Companies

Common Sense: First, you should always start by applying a healthy dose of common sense-if an opportunity sounds too good to be true then there's a very good chance that it is. Among the most common red flags that indicate almost certain disaster are claims that state anything similar to "This person made "X" thousand in just their first week!" In fact, highly reputable companies will completely avoid making references to potential earnings other than compensation percentages listed in their compensation plans.

Online Watchdogs: Fortunately, as the number of scams and frauds continues to rise, so does the number of online watchdog and consumer protection resources. You should always explore online reviews, scam and fraud reports, online forums and other similar resources any time you are thinking about spending any amount of time or money. Searching online for your prospective network marketing companies tagged with terms such as "fraud," "warning," "scam," and "consumer report" will help you dig up dirt about companies you should steer clear of (e.g. "John Smith Network Marketing Group fraud"). In addition, while testimonials can be helpful, it's often better to take them with a grain of salt because you can't always verify if they were paid testimonials. Similarly, if people have included a link to a specific opportunity in their reviews, always use your mouse to hover over the links to check for unique URL ID numbers. These act as referral codes that compensate those people for clicks through to the site, indicating that their review may not be genuine.

Evaluate the Product: First, the greatest success usually comes through marketing something you actually believe in. Second, if the product seems a bit sketchy, farfetched, fake, or something you'd generally see on an infomercial at 3 a.m. in the morning then there's a good chance you should avoid it.

Member Support: An excellent indicator of an honest company is the type and degree of support they offer their members. The most legitimate opportunities are usually those that provide member training-how to sell their particular product, how to explain their compensation plan to your prospects-and leadership training, such as how to support your own downline and help others build their businesses underneath you.

History is huge: How long has the company been around? Prevent the inevitable disasters associated with fly-by-night companies by avoiding any companies less than a few years old.

Signup Fees and Mandatory Inventory Purchase: A solid sign of honest network marketing companies is free signup. The safest options are always those that have no upfront investment or inventory requirements. If there is no potential for immediate gain by the company, it's much less likely that they're scheming to rip you off. However, some legitimate companies may charge a fee to join, so carefully read through about what's included in your signup fee-you should at least get some sample products and comprehensive training materials. Better yet, some companies will even offer a money back guarantee or some type of risk-free trial period.

Compensation Plan Assessment: It can be difficult to assess the legitimacy of compensation plans since there are so many variations, but it generally helps to check that the plan provides for compensation at every stage of your business development to support continued growth. In addition, you should also consider how much time and effort you will need to invest in order to achieve your financial goals-stay away from compensation plans that seem like you'll have to grind away every day just to get by.

Exponential Rewards through Thorough Exploration

There are some life-changing network marketing opportunities available if you conduct thorough research and fully explore your options before you jump in. Here's to your success!

Andrew Rossillo writes about internet marketing for Content Crooner. Content Crooner drives traffic to your website by giving you everything you need to create great content, automate its distribution, and track your impact. It's fast, easy and very affordable. Visit us at Content Crooner.

Article submitted Wednesday, June 08, 2011 & read 0 times.

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