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The truth of the matter is that few business models provide
the participant with
the upside potential offered by Multi Level Marketing.
The shrewd participant will research the promoter and
evaluate the products being distributed. What is the organisational structure of the management
team? Is it a quoted company or a limited liability company? Who are the
shareholders? What are their motivations? The longer a business has been
established, the more likely it is that information will be available to support an
objective opinion about the ability of that company to deliver on its promises.
Multi Level or Network Marketing is a method for product
distribution similar to Direct Selling. One of the important measures is the amount of gross turnover
available to pay commission to the Independent Associate Members. This
might range from 25% to 75% and is paid to the participants as commission
rather than being expended on a traditional sales and marketing operation.
No-one wants to be caught out by a poorly planned and/or
executed business whether it is a shop, a franchise or an MLM distribution company.
Most people should be able to recognise a Ponzi scheme where
a return of 50% in 90 days is promised from the monies deposited by a growing group of
'investors' until it is realised that the scheme is unsustainable.
The day after
Christmas
1919, Carlo Ponzi began advertising his investment scam which
lasted for 9 months and involved 40,000 'investors'. He was subsequently
jailed and died a penniless, convicted criminal in 1949.
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