MLM vs Pyramid SchemeNetwork marketing, also known as MLM or Multi-Level Marketing, sometimes gets a bad rap due to its frequent confusion with illegal pyramid schemes.  However,the structure of a legitimate MLM business is a very effective business model that, when treated like a real career, can easily become your path to entrepreneurial independence.  In fact, you’ve probably heard of several MLM businesses, like Mary Kay or Tupperware.

Pyramid schemes, on the other hand, are a fraudulent system that promises large profits when you recruit more people to join the program.  These profits don’t come from any sales or actual investments, simply from drawing more people into the program.  Even if a product is involved, it is being sold to the investors at an inflated rate, not to the public.  If you are being encouraged to purchase more inventory than you could sell, or if there is no product and you are simply sent out to recruit people with promise of large monetary rewards, those are red flags.

In a legitimate network marketing business, there is no promise of quick money; as with any real job, you earn money for the work you put into it.  As with any entrepreneurial enterprise, you should expect to have to invest money in the beginning (any business requires fees to be paid and investment in inventory, whether you start it yourself, invest in a franchise, or invest in network marketing).  However, as a network marketer you get to run your own business on your own terms, but with an established support system.  It provides you with a lot of freedom and a better balance of working and personal life than most careers can offer.

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