I recently interviewed Dr. Jon Taylor, an expert author and researcher on the subject of Multi-Level Marketing (MLM). His conclusions are that you have a better chance of making money in Las Vegas gambling on craps or roulette, than making money on an MLM. His website is MLM-TheTruth. His book, The Network Marketing Game, offers great insight to how these MLM operators take advantage and give false hope to many vulnerable people looking to earn an honest living.
Here are the 5 Red Flags of MLM’s:
Red Flag #1: Participants are recruited in an endless chain of participants.
Red Flag #2: Advancement in the scheme is by recruitment, rather than by appointment.
Red Flag #3: Participants are expected to buy (or subscribe to) products or services in order to qualify for commissions or bonuses or to advance in the scheme.
Red Flag #4: The company pays commissions and bonuses on more than four levels of participants.
Red Flag #5: Company payout per sale for the total of all upline participants exceeds that for the person actually selling the product.