As a general guide, here are 8 ways to tell the legitimate direct selling companies apart from pyramid schemes.
1. Network marketing is NOT a “get-rich-quick scheme”.
Network marketing may be very lucrative, but it is also a tough business. Right from the start, genuine businesses will tell you that the results happen only if you put in the time and effort.
Any company that promises you an easy way to riches should be regarded with caution.
2. Direct selling companies deliver quality products or services.
Pyramid schemes have no legitimate products or services.
Good direct selling companies dedicate substantial resources to research and development to create quality products that are of actual use to people.
3. Direct selling companies have restrictions in their compensation plan.
Reputable direct selling companies limit the number of people who can earn a commission through sales. This is to level the playing field for its members.
In a pyramid scheme, the “uplines” or the ones at the top make all the money, while the “downlines” or the ones at the bottom, lag behind due to late participation.
4. Network marketers do not earn commission solely through recruitment.
Recruiting new members is NOT a requirement for real network marketers to earn a commission.
The reason why is that legitimate companies are structured to reward people for promoting their products. If there is a commission for recruitment, it is also for sales of the company’s products.
In a pyramid scheme, there is no financial return unless others are successfully enrolled.
5. Direct selling companies give their network marketers a return guarantee. Overstocking is not allowed.
When dealing with inventory, representatives of legitimate direct selling companies are required to abide by rules and regulations. Product loading, or the excessive stocking of the company’s products, is not allowed. This allows representatives to focus on networking, as they need not worry about clearing excessive stock.
6. Network marketing opportunities have a solid training system.
Direct selling companies place great emphasis on training their network marketers. Organisations like QNet have qualified trainers equipped with the expertise and experience to help their members better understand the business and products.
They serve as mentors and motivators to grow the business.
7. Network marketing opportunities come with the support of business tools.
A legitimate company helps you to keep track of purchases, commission earnings and the status of product deliveries, as well as full customer support. Other forms of support include regular product information releases, marketing materials and promotional offers.
8. Direct selling companies have proper policies and procedures, as well as ethical marketing codes.
Carefully review the company’s policies and procedures before making a decision. Genuine direct selling companies aim to achieve sustainable growth by fostering a culture of ethical marketing.
Remember not to get carried away by promises of financial freedom and the fulfilment of life-long dreams. All network marketing does is provide you with a business model; it is still up to you to do the hard work.
What do you think? Have these tips been useful for you?