Are “Multilevel Marketing” Businesses Scams?

We all have at least one Facebook friend who swears they make a fortune selling candles, clothing, protein shakes, or weight loss supplements as part of a multilevel marketing scheme.

But are these really just pyramid schemes, or scams?

Read on to learn more about multilevel marketing scams and pyramid scheme scams, and find out how to judge for yourself is a business is legitimate, credible, and worth your time and money as either a buyer or seller.

Evaluate the Product

Some multilevel marketing programs are not necessarily scams, though you should always proceed with caution. When you’re wondering whether or not to participate in any business, either as a consumer or salesperson, evaluate the product on its own merits.

For example, one sign that you’re dealing with a multilevel marketing scam is that the claims made about the products or services are outlandish or unverifiable. Do the salespeople at a company claim that a particular supplement can increase your libido, help you lose 50 pounds, and cure you of various ailments, all while helping to improve your sleep and overall mood? You’re probably dealing with a multilevel marketing scam or pyramid scheme.

In addition, take a look at the prices. A cotton dress of similar make, cut, size, and quality shouldn’t be $250 at one company and $30 at another. If there is a sizeable difference between the prices at the company you’re considering working for and others of similar market value, you might be dealing with a multilevel marketing scam rather than a credible business.

Notice the Recruiting Techniques

How are current salespeople acting at the multilevel marketing company you’re evaluating? Do they approach you aggressively or expect you to pay exorbitant prices for sales training courses, conferences, or wholesale products? These are common signals that you are entering into a pyramid scheme.

Aggressive recruiting techniques are a major red flag for a multilevel marketing scam. Pushiness often means that the salespeople or higher-ups have something to hide. They want you to buy, buy, buy, before you get a chance to think and reflect outside of their applied pressure.