How to Spot a Pyramid Scam

People nowadays are searching for fast ways of earning money. They invest in the stock market, real estate and other investments that require some risk but promises gratifying profit in a manner of passive income manner. Because of this, multi-level marketing (MLM) has never been more popular. Most of them, especially the top MLM companies which have been around for many years, are really helpful in providing additional income. However, there are pyramid scam companies that disguise as legit MLM companies. People should be wary of these and should watch out for the following alarming signs.

mlm companies

Top MLM Companies – Which ones are legit?

Top MLM companies which have made their marks for years include Amway, Avon, Tupperware and Mary Kay. These companies appear on the top search when someone tries to search about top MLM companies online. This is one way of telling if your prospective company is legit or is a scam. Try to check the Internet and find the list of top MLM companies. It is also helpful to join the ones that have been around for more than 10 years. Pyramid scams do not last long because their scheme gets discovered or they run out of people to trick into joining their companies.

Legit MLM companies give utmost importance to their product quality. They focus in selling these products so they make sure that such products really work. On the other hand, pyramid scam companies have questionable products. Upon use, buyers discover that they have been lured by false promises because the products are inferior in quality. This is why pyramid scams, unlike top MLM companies, focus on recruiting members and earn from their memberships. They do not care about their products’ credibility because recruiting is their main goal. People should watch-out for companies that motivate their members to focus on recruiting downlines rather than selling their products.

For more information on legit business opportunities, check out these MLM Companies.

Find This Out First

Finding out and going to the actual office of the company also helps in determining its legitimacy. Top MLM companies have numerous offices that also serve as the display area and stockroom for their products. If there are very little or no products to sell displayed in a certain company’s office, it is most probably a scam. To be even surer, inquire about the company’s product sales policies. If they do not have one or offer a flimsy set of policies, it could be because they do not plan on selling any products. They only want to recruit more people who will also recruit even more people. It turns out that the new members earn money out of their recruit’s membership fee and the financial burden falls to the ones on the lowest part of the ladder of downlines. The ones who fail to recruit are the ones who lose the money they have invested.

Watch Out For These Signs

Lastly, top MLM companies have a structure that promotes members based on their sales. The higher their sales, the more likely members get promoted as leaders of other sellers. Once promoted, their commission on the sales of their downlines increases. On the other hand, pyramid scams lets its members work hard on recruiting new members and declare themselves as the leader of their downlines. These companies lack a formal system of employee promotion, because they only aim to collect money from their new recruits.

MLM companies are similar in terms of having downlines and requiring initial membership fees from their new recruits. These similarities result to confusion on which company is legit or pretending to be so. However, people should watch-out for the alarm signs for pyramid scams mentioned above. Both MLM companies and scammers offer additional income, but the latter usually have offers that are too-good-to-be-true. People should have a sound judgment and stay away from these companies.

It is normal to want to grow one’s money and for most of us, the faster this happens, the better. But this should not be the case all the time. Exploring the potential income that new MLM companies offer could be a smart move. But the smartest thing to do with one’s hard-earned money is to invest it only to the top MLM companies whose reputation and legitimacy have been strengthened and proven by time.

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