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Frequently asked questions about MLM versus pyramiding companies
What is pyramiding and what’s the difference between legitimate multilevel marketing (MLM) and pyramiding?
Network marketing, or MLM, is a legitimate mode of business wherein products are sold via person-to-person selling instead of the traditional way of selling from a fixed retail location. The objective is to sell products to the end-consumers.
The difference between MLM and direct selling is in the commission system, wherein participants in MLM generally benefit from the sales made by people under their line of sponsorship even if they are several levels deep (e.g., an independent distributor in an MLM earns commissions not only on his/her personal product sales, and not only on the sales of a person personally recruited by him/her, but also on the sales of persons recruited by his/her personal recruits).
Pyramiding is generally characterized by people earning primarily from the act of recruiting other people who pay significant registration fees to join the pyramid scheme.
The people who sign up and make the investment in the form of registration fees then try to recoup their investment by recruiting other people into the scheme by enticing them to make similar investments.
Even if the registration fees include products, the total amount of payment is deemed a registration fee or investment as people pay the sum to join the plan rather than to sell the products to ultimate consumers.
Pyramiding is illegal because it is a money game. Profits are derived primarily from participants’ entry fees, and the income is dependent on the participants slot or position within the organization rather than the ability to sell the products or services.
If you are trying to start a MLM bussiness you should look for the official list of DSA member companies, If your future company is there, your safe. See at www.dsa.org
Pyramiding is a hot topic . Why is that?
Why is Pyramiding a hot topic because it affects, and has affected, many people regardless of social or financial stature with its promise of easy and immediate financial gain.
In the past and still in present, pyramiding attract a lot of news when the pyramid scheme fails and people lose their money which, in many instances, are lifetime savings. Yet pyramids continue to happen. It brings a lot of pain and sorrow to the victims.
One way to see if a business is legitimate, fair and sustainable is by being a member of DSA with strict business standards, and a partner of the campaign against pyramiding.
In addition, the illegal pyramid schemes impact legitimate direct selling and multi-level marketing businesses, which offer earning opportunities to uplift the lives of individuals. Propagators of pyramid schemes tend to liken themselves to legitimate businesses, when they are really very different and can be distinguished through the 8-Point Test of DSA.
Amway was “accused” of pyramiding in the United States in 1975. In 1979, Amway won a landmark case against the United States Federal Trade Commission that legitimized MLM, This victory set a new standards that defined legitimate MLM companies
Amway country manager Leni Olmedo: After 4 years of legal proceedings, the US Federal Trade Commission ruled in 1979 that Amway was not an illegal pyramid scheme on account of the fact that the Amway sales and marketing plan is based on retail sales to consumers, and that the following salient features of the Amway plan and rules of conduct provided adequate protection to consumers:
There is no “headhunting” fee. Bonuses are based on product sales, and distributors must satisfy customers to make the Amway plan work.
The “70-percent rule” requires distributors to sell at least 70 percent of the total amount of products bought at any given month as a precondition to receiving performance bonus, thus preventing inventory loading.
The “10-customer rule” requires distributors make at least one sale to each of 10 different customers that month to make him eligible to receive bonuses and commissions on sales made by other distributors in their personal sales organization, thus encouraging retail sales to consumers.
A “buy-back policy” is offered for unsold inventory.
That decision has become known as the “Amway Safeguards Rule” which is currently one of the most significant sets of legal standards by which courts and regulatory agencies determine the legitimacy of an MLM/network marketing/direct sales company.
The FTC investigations gave Amway and the industry renewed credibility in the long run. Decades after the landmark decision, the above criteria, known as the Amway safeguards test, continues to be used as a model or “gold standard” in differentiating legitimate MLM companies versus illegal pyramids.
What kind of reward schemes are considered “red flags” for potential pyramiding companies?
Symmetry general manager Beth Anana: Joining a company and encouraging new members to have multiple heads or multiple distributorships; the financial rewards being offered based on recruiting others who are similarly offered rewards to recruit others; basing the rewards on recruiting scales and being able to earn on infinite levels without even considering market demands are considered “red flags” for potential pyramiding companies.
Why should one avoid joining a pyramiding company?
Because Pyramiding is illegal. It is a scam and a practice of tricking people to register, pay and invest money with a promise of high commissions and earnings, usually, but not always, without any product being sold.
There is no business basis for earnings and commissions to be paid. Direct selling is all about providing opportunities to earn by selling quality, fair market value products to consumers on a sustainable basis. Selling a product is the business basis of providing individuals commissions, wherein the company shares the profit from the product sold to the individual who worked and sold it to the consumer.
Fair market value and quality of the products sold guarantee sustainable earnings and income which is the intent of direct selling.
What benefits will one get by joining a DSA accredited company?
One can also enjoy the benefit of having a concrete means of correcting negative practices in the field by distributors of other DSA companies, acting on their own, all in the spirit of dialogue and reconciliation and guided by a strict code of ethics.
Another is to learn from the best practices and successful projects of other DSA companies willing to share in the regular forums of the association. DSA provides a good counterpoint against the illegitimate pyramiding companies which are creating a bad image to the industry.
Finally, it helps boost the government’s campaign for inclusive growth, lifting more people from poverty by creating an army of entrepreneurs to help themselves and the national economy.
How can one be sure they are not joining a pyramiding company?
Pyramiding companies survive by disguising themselves as legitimate direct selling or MLM companies with hopes of taking advantage of unsuspecting consumers.
People should be mindful of the companies they join so they won’t be easily victimized. In order to help, DSA came up with the 8-point Test—a series of questions that can differentiate a legitimate direct selling company from a pyramiding one:
Is there a product?
Are commissions paid on sale of products and not on registration/entry fees?
Is the intent to sell a product not a position?
Is there no direct correlation between the number of recruits and compensation?
If recruitment were to be stopped today, would the participants still make money?
Is there a reasonable product return policy?
Do products have fair market value?
Is there a compelling reason to buy?
If the answer to all the questions is YES, then the company being evaluated is a legitimate company. But if the answer to even just one question is NO, then there is a high probability that it is a pyramid scam.
If a company has legitimate products and encourages retailing, are they automatically legitimate MLM? Why or why not?
Retailing to consumers of legitimate and safe products, whose claims have been substantiated and that are registered with and approved by the authorities for selling in the country, is an essential characteristic of a legitimate MLM company.
A legitimate MLM company has products priced at fair market value, wherein customers routinely buy the products without joining the company as a distributor; normally has reasonable refund policy for retail customers; and any unsold products can be bought back by the MLM/direct selling companies whether or not a distributor decides to quit the business; and compensation is tied to the sales of products and not based on the number of recruits signing up.
What are remedies if one discovers that the company he or she joined is actually a pyramiding company?
DSA is the first line of defense to help determine pyramiding. For any assistance, you may contact www.DSA.org
Network Marketing– The Best Business in the World
You’re TIRED of negative bosses, alarm clock stress, leaving your kids in someone else’s care, rising costs, a bleak retirement, heavy student loans, the fear of losing your job, the impossibility of starting your own business … IS there an answer? YES!!
Network marketing lets you develop extra cashflow or a new career at very low startup cost, low overhead, low risk, from home, at your own pace, with unlimited income! Get paid what you’re worth!
What is network marketing, or multi-level marketing?
In this video, Professor David Frost of Bethany College, the first institution to teach network marketing, tells us why he believes this business has the lowest risk and the best reward, of any business model, for those seeking financial freedom. ~ This video was made simply for Bethany College students and staff to understand network marketing.
Robert Kiyosaki, Rich Dad, Poor Dad multi-millionarie investor, agrees in his 27 minute video, “The Business of the 21st Century”: https://www.youtube.com/watch?v=chSDrpd94QA
Here is a great little intro book that takes just minutes to read: “Making My First Ten Million”, by Brian Carruthers, on Amazon or http://www.makingmyfirsttenmillion.com/
If you want to learn more about network marketing, contact me. I also highly recommend you read the first 4 chapters of “The 45 Second Presentation” on Amazon It tells you what network marketing is.
If you’ve heard negative things about MLM, you may love http://www.brilliantcompensationonline.com/ This 28 minute professional video satisfies everyone’s need to validate this profession.
How do you choose a good network marketing company? Click Here to know mine 🙂
MLM is perfect in this economy
And you may like to learn more about network marketing see Eric Worre’s best-selling book on skills for network marketers: Go Pro: 7 Steps to Becoming a Network Marketing Professional.
“This is what I have been searching for! WOW!” ~ Bobby Moeng.
IT ‘S TIME TO GET YOUR FREEDOM BACK!
Network marketing lets you develop extra cashflow or a new career at very low startup cost, low overhead, low risk, from home, at your own pace, with unlimited income!
How Works MLM?
MLM products run the gamut of product lines, as any product can be distributed and sold using the MLM business model.
MLM distributors earn money in two ways: by re-selling the products they have bought at wholesale at retail prices, and by recruiting other individuals to become distributors for the MLM company, from which they earn money on a percentage of their sales.
MLM products run the gamut of product lines, as any product can be distributed and sold using the MLM business model. MLM distributors earn money in two ways: by re-selling the products they have bought at wholesale at retail prices, and by recruiting other individuals to become distributors for the MLM company, from which they earn money on a percentage of their sales.
Both have hailed MLM business opportunities as the best way for anyone to achieve financial success, and they expect MLM to continue to expand and become increasingly successful over the coming years.
Acquiring a basic concept on the fundamentals of MLM and the business structure is the first step in pursuing this lucrative and unique business venture. Some MLM home based business opportunities are better suited for people with certain skills.
Some MLM home based business opportunities are better suited for people with certain skills. In addition to terrific products and an excellent pay structure, many MLM companies provide their distributors with proven marketing and sales systems that greatly shorten the learning curve and can get them on the fast track to success.
With today’s modern age of the internet, MLM distributors are no longer dependent upon hosting home parties and similar activities to sell their products and recruit new distributors.
Understanding a MLM Business Opportunity
Multi-level marketing, commonly referred to as MLM, is a distribution pattern that consists of independent salespeople who represent a parent company that are paid commissions based upon the volume of product sales that they create. Thanks to illegal pyramid and Ponzi schemes, many people have developed a false belief that MLM companies are similar to these schemes.
Is MLM Right for You?
There are a myriad of advertisements stating that their MLM business opportunity can put money in your pocket fast. While the internet makes profiting from an MLM home business much simpler and streamlined, becoming successful will still take some time and effort.
Enter the Team
Thankfully, My company provides you with a stellar product line, valuable training, a proven marketing system, and an excellent company culture that can help pave the way for your success. This company may be just what you’ve been looking for if you are interested in pursuing your dreams of financial freedom with the best MLM business.
Acquiring a basic concept on the fundamentals of MLM and the business structure is the first step in pursuing this lucrative and unique business venture. Next, it is important to find a legitimate MLM company that you can be proud to promote and invest your time in.
NOTE– WE SHOULD HAVE SOME SORT OF EXAMPLE OF PAYMENT STRUCTURE
Mary Kay, Amway, Herbalife or Avon are just a few of the highly respected MLM companies that have thrived over the years. Both have hailed MLM business opportunities as the best way for anyone to achieve financial success, and they expect MLM to continue to expand and become increasingly successful over the coming years.
Dr. Robert Gonzalez Join FGXpress
Dr. Robert Gonzalez, a top network marketer, has actually recently signed up with FGXpress. Having successfully owned and run several Wellness centers in Arizona, the Gonzalez’s transferred to California in 2007 to seek Internet marketing comprehensive time as he were seeking time flexibility to enjoy his family and the beach.
Who Is Dr. Gonzalez?
Dr. Gonzalez experienced an impressive development in their time, reaching $1 million month and a group of over 14,000 people in merely 18 months.
Presently residing in San Diego, USA the million dollar earners are developing their incredible “Have It All” group via individual development, mentorship and a straightforward system to lead them to success.
Dr. Gonzalez has been showcased in Steven Covey’s “7 Habits of Highly Effective Multi level marketing Professionals” and is a dynamic presenter. He has talked with thousands in a number of countries and has actually discussed the stage with prominent leaders, Dr. Deepak Chopra and Anthony Robbins.
They have actually selected FG Xpress as their HOUSE for their career in Internet marketing. With a visionary leader Ron Williams, a perfectly worldwide chance with 190 nations able to obtain product quickly, an FDA noted Training 1 Medical Device for the organic alleviation of discomfort and improving the feel and look of skin, incorporated with a 62 % payout and a FIFTY % front line matching bonus offer, Dr. Gonzalez and his wife have actually already reached a management degree and have an international visibility in over 10 nations.
With their purpose to Educate, Inspire, Motivate and Transform millions of lives through Natural Wellness and Conscious living, Dr. Gonzalez and Ann are committed to building a heritage with FG Xpress.
FGxpress – PowerStrips – How To Join
The FG Xpress Power Strips are a blend of old natural herbs that normally and holistically trigger your bodies possess recovering system.
I am personally delighted to attempt them. I do not have any significant discomforts or injuries nevertheless I have had some muscle knots and cramps for some months that I am expecting attempting them with. And. Who does not desire more energy! Its a win/win in my view!
Swelling or simply desire more energy Click here to get your FG Xpress Power Strips if you have discomfort.
, if you desire to make cash with the FG Xpress company I personally advise you to take action Now.
Sign up with a leader who understands ways to market ANY item online. If …
Your a go getter, I would enjoy to have you on my group
You are teachable
You could carry out and see a webinar exactly what you find out
– you desire holistic and natural discomfort relief.
– you could deal with and work fg reveal like a task to make money.
– you are teachable.
– you prepared to kick ass and take names.
– your fed up working a 9-5 task.
– you could enjoy a webinar and instantly do something about it on exactly what you found out.
– you could paste and copy.
– you could compose material on a blog site to market your Fg Xpress company.
DO NOT JOIN FG Xpress if:.
– You think you’ll earn money simply by buying the item.
– you have no discomfort and do not such as natural holistic treatments.
– you hesitate to talk with individuals.
– you do not wish to find out ways to market online (thats the very best means to make money).
– your a wimp.
– you criticize the government and present head of state for your monetary well being.
– you do not have adequate cash to market your item.
– you’re a whiner.
You have to discover the best ways to market. With whatever means you selected, however its up to you. Select a means that somebody has a tested performance history of success in their past. Profit from them, make use of the exact same trainings, devices and resources that they have actually made use of.
Success with anything in life is develop on a couple of crucial principals.
Effort. Commitment. And MODELING from others.
Ariix – Is This A Good Company To Invest Your Time And Money?
Over 95 % of all MLM launch fail within the first few years. A huge aspect for success is the business leadership and management.
Fred Cooper is the creator and lead man for Ariix. Now, does Fred have the capability to effectively introduce the business and expand it?
Fred began dealing with USANA Health Sciences as a specialist in 1997. He quickly became a full-time worker of USANA. He worked his means into executive management prior to becoming President and Chief Operating Officer of USANA.
Prior to dealing with USANA he worked for Aetna. He additionally has a Ph.D. in Business Administration for the University of Utah.
Fred quickly surrendered from USANA on May 9, 2011 to begin Ariix.
Below are some intriguing realities:.
On January 12, 2011 iCentris, a company possessed by Fred Cooper, bought the domain www.Ariix.com.
On February 12, 2011 the business name Ariix was signed up in Utah by Celebrus LLC.
Ariix has the exact same address as Fred’s various other business, iCentris.
The realities point very plainly that while he was working at USANA he was additionally dealing with introducing Ariix. Businesses and domains were begun months prior to he surrendered from USANA.
I’m a capitalist and have no issue with individuals dealing with companies and such. However there are methods you do it ethically and with stability.
It’s a little troubling as soon as you look below the area.
While President and COO of USANA he was straight working behind USANA’s back on a copy cat MLM that would be a direct rival. Throughout those months he was additionally dealing with USANA business policemans and contacting the suppliers about USANA. Especially, exactly how fantastic USANA is, exactly what an incredible item it has and among the very best company designs out there.
Exactly how can you state something while dealing with something that straight breaks it?
Does the word lying pop into your mind too?
Right here’s my idea: How can you be working in among the leading positions of a business while dealing with a copycat company?
You cannot. It’s like being wed or in a major relationship and informing the individual that you adore him or her, while seeing another person behind their back and two timing.
Fred could state all types of aspects of exactly how he Wants and’s a business owner to pursue various other companies or he counts on Ariix method more and so on. Fine, I do not criticize him for it. However do it with stability.
The bottom line is that his stability is in concern now.
, if he surrendered months ago while he was preparing Ariix (and he undoubtedly was if you look at the records above) that would be respectful.. However he didn’t.
In all my years of being and working in company, I’ve found out to look at individuals’s actions. Actions speak volumes. Actions speak the fact.
In my mind, Fred’s actions state he’s a distrustful individual. His concern is chasing after cash and enhancing his very own monetary position.
Will the means he runs Ariix be various? Potentially because he’s the creator and probably has equity in it. Still, the realities indicate a selfish individual who puts himself initially.
If he worked USANA like that, exactly what will he do to Ariix Distributors? Ariix is currently a start-up MLM with a reduced possibility of success. Do you wish to partner with somebody who has a performance history of working behind individuals’s backs?
The writing is on the wall with his actions. Be cautioned if you’re looking at Ariix.
Forecast: Fred certainly has some excellent capabilities. However, based upon Fred Cooper’s actions, Ariix will belong to that 95 % of failed companies.
You could wager there are others if an individual does something dubious in one area of their life. Exactly what various other sketchy actions will come out about Fred?