Network Marketing – Is it a Scam?

Every day, thousands of people come online looking for a way to earn money from home. Filtering out what is and is not legitimate can cause incredible frustration as everyone and every ad placed says “we are not a scam.”

Have you ever seen a commercial where the company claims they are the only one who does a certain thing? You know you’ve seen at least three other companies do the exact same thing. Well, the same is true in placing work at home ads. Anyone can say “we’re a legitimate network marketing company,” even if they aren’t.

So the answer to whether or not network marketing is a scam would be no. Network marketing is not a scam. However there are imposters out there calling themselves network marketing companies that are scams.

Now the question changes – instead of asking “Is network marketing a scam?” the question becomes “how do I know if this company is legitimate?”

I believe there are two very large ways to distinguish legitimate network marketing companies from the imposters:

1. What’s being offered? Legitimate network marketing companies have a product. Not just any product, but a true stand alone product that can be purchased without the business opportunity. This product might be jewelry, or it might be nutritional supplements, or it might even be kitchen products. Bottom line, there is a true product that customers can and do buy.

If the “product” being offered is the opportunity, this should cause red flags to go up. The business opportunity is not a true product that can be sold to a customer. So ask yourself what is being sold.

2. What is the company offering commissions on? Commissions should only be offered on the sale of a real product. Commissions should not be offered on introductory kits or on training supplies.

If the company is offering commissions on the sign up, this should cause a red flag to go up. Legitimate companies do not offer sales commissions on sign ups. I’ve also seen companies sell trainings for $300 or so and then give a commission to the upline. This should never happen. If a tape is sold for a dollar, that would be a legitimate training expense and no commissions should be paid.

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