Saturday, April 16, 2011

5 Differences Between a Legitimate MLM and a Pseudo-MLM Scam

Difference #3


Legitimate MLM Rewards Leaders with profit sharing
Legitimate MLM, in order to have a minimal sales department with the sales teams and supervisors and trainers, have tasked their associates to find better sales people, train them, and supervise them. In return for doing all that, the company rewards the associates with a bit of the profit from the new sales people that were recruited. Thus, the existing associates are encouraged to help the new recruits to be better salespeople, in order to maximize the profit being shared.
The end goal is more products being sold, not necessarily more recruits. 
Fake MLM Rewards Top Recruiters
A fake MLM would have minimal sales, and all emphasis are on recruiting even more people for their membership dues. This is often formalized in some sort of a "matrix" scheme, where you will reap some rewards when you 'cycle out' (i.e. filled the pyramid with recruits). However, there can be additional "profit sharing" or "incentives" for the top recruiters. 
Any sort of profit sharing are for the people who bring in the most recruits. The end result is more recruits, not necessarily more sales. 

http://hubpages.com/hub/How-to-distinguish-a-Legitimate-MLM-from-a-Fake-MLM
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