As a general guide, here are 8 ways to tell the legitimate network marketing 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. Legitimate Network marketing companies deliver quality products or services.
Legitimate businesses sell high-quality products or services while a Pyramid schemes have no legitimate products or services.
Legit network marketing companies dedicate substantial resources to research and development to create quality products that are of actual use to people.
3. Network Marketing Companies have restrictions in their compensation plan.
Reputable network marketing companies limit the number of people who can earn a commission through sales. This is to level the playing field for its members.
While 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. Network Marketing companies give their network marketers a return guarantee. Overstocking is not allowed.
When dealing with inventory, representatives of legitimate network mamarketi 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.
Network marketing 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.
Training brochures help network marketers better understand the products and how to sell them.
A legitimate network marketing 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. Legitimate network marketing 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 network marketing 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.