In every field of business, whether it will be a home based business, network marketing companies, or real estate, there is a dark side.
Unfortunately, crooks & con artist’s involve also the network marketing companies & the MLM industry.
This is a fear-factor which is for a reason, & network marketing companies are not always immune to scams.
The most basic MLM scam is the “Pyramid” Companies masquerading as legitimate network marketing companies.
The difference between these two is mainly in the field of the “product”.
Network marketing companies give a product or a service for their customer’s dollars, & Pyramid companies don’t.
Network marketing companies receive money, process the order & ship a quality product to real live persons in contrast to Pyramid companies that just pass money from one upline to another.
Now a strong note should be acknowledge when people confuse out of ignorance network marketing companies to a non-productnon-service company.
Some people bad mouth network marketing companies only because lack of knowledge or a blocked conscience about this business model.
That means that out of poor research they address legitimate network marketing companies as “Pyramid schemes”.
Another type of scam that involve network marketing companies is companies which break down & take away their distributers money.
This also is divided to two subjects.
The 1st is a non-legitimate issue of Network marketing companies that deliberately run away with their distributers money & by that skip their commission payment.
And the 2nd is a legitimate-but-unpleasent issue of network marketing companies that simply go bankrupt, unable to pay their distributer commissions.
You see, Many network marketing companies are being established every year, but most of them simply don’t survive their first 3-5 years. like it happens in every business industry in the world.
It is a result of bad planning, poor management, lack of funds, these type of network marketing companies don’t go bankrupt by purpose, sometimes it just happens.
In those basket-case companies some network marketing companies decide to bail with the money & some declare bankruptcy.
You can view & see the future by looking on the profile of those network marketing companies.
By looking at their compensation plan which goes by a ratio of 55 - 60% of sales to the company & 40-45% to the distributers.
Do they have a unique product which will give them an advantage? Or it is the same one as a thousand of other network marketing companies?
network marketing companies that simply decide to stop their action & not pay their payments stains the entire industry, & it is not so easy to foresee.
The thing that you need to examine is how long have those network marketing companies been around the market for?
Network marketing companies that passed the 1st critical 5 years can be a better bet than network marketing companies that are still pubescent.
This factor can reduce the risk of being a part of devious network marketing companies
Click here to understand what are the 7 great lies
of the network Marketing industry.
Click here to learn about the Network Marketing History