The following are myths commonly associated with MLM.



First MLM myth: Multi level marketing is a form of pyramid scheme.

The fact is that ? it is not. Fist of all the obvious difference between MLM and a pyramid scheme is that the former is a legal means to perform business while the latter is definitely illegal.

The common process in a pyramid scheme is that you usually have to part with a significant amount of you hard earned money in exchange for literally nothing. You get no visible services or goods. What you are supposed to have is a lot of luck and a chance to double, triple or quadruple the money you put in ? if that is ever possible. But chances are --- and there is a lot of chance of this happening ? the only person or persons that do get rich are the ones on top of the pyramid.

The idea is that pyramid schemes is a way to transfer funds from one person to another.

But in multilevel marketing, you are given the opportunity to involve yourself in a system of business that is legal. There are actual products distributed among MLM members and networks composed of various clients and buyers.

Second MLM myth: Multilevel marketing provides better money making prospects than

conventional businesses and business models.

The fact is that that is not the case for all MLM ventures. There have been instances where only a mere one percent of MLM investors and distributors actually gained profit. Meanwhile, those who earn a living via MLM are also smaller in number.

The conclusion that opportunities for success in a multilevel marketing business is slim is mathematically sound. This is because the structure of MLM can actually support a very small number of successful MLM winners.

Basically the system is unstable and the quantity of distributors in a specific area is unlimited, also there is no clear or specific market potential evaluation.

Third myth: Multilevel marketing is a Ponzi scheme in disguise

The fact is that ? it is not. A Ponzi scheme derived its name from a man who existed during the 1920's whose last name was Ponzi. Charles K Ponzi operated a scheme wherein older investors earned money literally by sitting down and doing nothing thanks to the influx of money invested by newer members.

The difference between a Ponzi scheme and a pyramid scheme is that the Ponzi scheme ollows no clear structure or hierarchy. Actually, there is only one --- lucky ? person who collects money acquired from new investors. This person then uses the collected funds to reward, award and give these cash to older investors who were earlier promised that they will be given the proceeds originally promised to be given to them.

So the bottomline is: if you are involved in a Ponzi scheme, you are then merely paying off profits originally promised to earlier investors. Ponzi schemers make you believe that they will help you make money when in actuality they are taking your money and giving it to those investors who earlier put their money in long before you did.

In a Ponzi scheme there is also no visible goods and services provided or distributed.

Fourth myth: Multilevel marketing is a way of life that gives you security and fulfillment.

The fact is that --- it does not. In reality no such business exists that will give anyone a secure and fulfillin way of life. No business is perfect, there will always be financial ups as well as financial downs. And multilevel marketing is just as subject to that.

Unfortunately most MLM advertisements and come-ons involve truly tempting forms of materialism. The excesses presented by multilevel marketing companies would make even Fortune 100 companies blush. Most MLM ventures promise scandalous wealth, personal fulfillment and luxury.

Fifth myth: Multilevel marketing is as easy as one two three.

The fact is that MLM is not for the lazy at heart. There is a misconception that MLM equals to easy money. Some even think that all they have to do is establish a few contacts ? preferably those they already know like family and friends ? and from there wait for their checks to arrive in the mail.

Most people who actually get rich from MLM ventures are those that worked the hardest.