Home Daily Brief  Stock Market Guide   Get in Touch   
 
 
Articles & Reports
 
 
Learn how to Invest
 
 
Investing Terms
 
 
Investing e-Books
 
 
Investing Calculators
 
 
Quotes & Forex
 
 
Investing in Art
 
 
Contact Information
 
 
The GreekShares.com - Investing Education - Real Simple Syndication
 
Stock Investing Course
What Is RSS?
Site ap
Risk Tolerance Quiz
The Newsletter
 
 
 
 

Investors,
Pyramids and
Multilevel Marketing Plans

Multilevel or "network" marketing plans are a way of selling goods or services through distributors.

These plans typically promise that if you sign up as a distributor, you'll receive commissions - for your sales and those of the people you recruit to become distributors.

These recruits sometimes are referred to as your "downline."

Some multilevel marketing plans are legitimate ...

However, others are
illegal pyramid schemes.

In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors - not to consumers in general.

The underlying goods and services, which vary from stocks to car leases, serve only to make the schemes look legitimate.

Joining a pyramid is risky because the vast majority of participants lose money to pay for the rewards of a lucky few.

Most people end up with nothing to show for their money except the expensive products or marketing materials they're pressured to buy.

Investors, Pyramids and Multilevel Marketing Plans

If you're thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan.

  • What's the company's track record?
  • What products does it sell?
  • Does it sell products to the public-at-large?
  • Does it have the evidence to back up the claims it makes about its product?
  • Is the product competitively priced?
  • Is it likely to appeal to a large customer base?
  • How much is the investment to join the plan?
  • Is there a minimum monthly sales commitment to earn a commission?
  • Will you be required to recruit new distributors to earn your commission?

Be skeptical if a distributor tells you that for the price of a "start-up kit" of inventory and sales literature - and sometimes a commitment to sell a specific amount of the product or service each month - you'll be on the road to riches!

Often consumers spend a lot of money to "build their business" by participating in training programs, buying sales leads or purchasing the products themselves.

Too often, these purchases are all they ever see for their investments!

If you decide to become a distributor ...

You are legally responsible for the claims you make about the company, its product and the business opportunities it offers.

That applies even if you're repeating claims you read in a company brochure or advertising flyer.

You have to verify the research behind any claims about a product's performance before repeating those claims to a potential customer.

In addition, if you solicit new distributors, you are responsible for the claims you make about a distributor's earnings potential.

Investors, Pyramids and Multilevel Marketing Plans
Continue to the Next Page

   

   
 
 
 
 
 

 

 
 
 
username
 
password
 
forgot password
 
 
 
 
Stay updated, sign up for our free newsletter to receive useful tips.
 
name
 
e-mail
 

Change Image
 
ype the above characters exactly as you see them in the field below.