How To Know If a Network Marketing Company is a Scam?

You heard about an MLM company and want to join so you can earn an extra income just like they said will happen. You want to join a network marketing company but you have heard about how most of such companies is just a scam and you don’t want to be one of them.

Don’t worry! Here are some points you need to consider before joining in.

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#1 There is no product/service for sale

Some companies might tell you all about the business plan and how much profit you can make by joining their company, however, they lack to mention about the product/service or maybe mention fewer details about it. If a company has no products for sale or low-quality type of product/service, then you must not only reconsider joining, but you must stop yourself from joining at all. This shows that this company is a pyramid scheme that builds on creating a team of sales representatives or distributors, not on having customers buy its product/service.

TIP 1: The main goal of a company should be to build a business that provides products/services to customers not on just building a team by recruiting.


#2 Crazy claims about the product/service

If a company starts making all these dumb-founding, miraculous promises about their products or services, know that this is a big-time scam. This happens a lot, especially in the health and wellness industry. A company might say that this product can make your skin look like you are 20 years younger than your age if used for a week. This is what we can call an uncommon or strange allege that alerts you to be cautious and look into the matter deeply.

TIP 2: Before joining any company, make sure that their products are not too good to be true.


#3 Pressuring you to buy more products

Remember that if you ever start a business, you need to invest in it; this includes any kind of business. The beauty of MLM business is that the initial cost is always less expensive when compared to other business plans.

If the company asked you to invest, most times by buying the products and maybe trying them yourself, that is very acceptable. But if they try walking you through how you require additional investment where you need to have an inventory of their products and get yourself into debt for it, then this is another factor to make you reconsider.

TIP 3: When you start your MLM business, don’t start it by getting yourself into huge amount of debts and make it a burden that takes away the beauty of the business. Instead, invest in the popular and highly profitable products/service until you gain experience on that sells for you and what doesn’t.


#4 Make sure all your questions & doubts are cleared

I bet you would have a lot of questions when you think of joining the business. Never hesitate to ask all your questions even if you think they may sound silly. Remember that not all network marketers started while knowing what “business” even meant. They educated themselves all the way to the top. Most companies (if not all) have training and support provided for their distributors.

TIP 4: Feel free to ask about anything in mind and make sure that you get solid answers to your questions. If not, then again you must reconsider joining.


#5 They ask you to invest largely on training or other business stuff

Like I said above, most companies provide free training whether it be online or a local presentation for their distributors to have basic knowledge of how the business works. But if they ask you that you need to pay a whole load of cash to get into their training sessions, then you should be more cautious about it.

TIP 5: Companies that are legitimate, professional and have been in business for a long time provide free training and support to their distributors. If the company you are planning to join doesn’t, then you need to look into the matter.



To summarize all the points above, my advice to you is to think about everything on what you are getting yourself into. These may not be ALL the points that can make you know the difference between a legit or a scam company. So look into these basic points and later think carefully and follow your gut.

Also, try to know more about your up-line. If he/she is someone you know or are comfortable with each other, it helps to feel confident with their answers and knows for a fact that they will be there to support you.

This doesn’t mean that you should not consider the business if you don’t know your direct up-line. Just try to know about them, know their story about how they see the business and what they enjoy most about it. It doesn’t matter if they joined last month or last year. What matters is they would provide you with the right training and support that you would need to help you reach your goal and provide you a plan on how to do so.


Eric Worre conducted an interview with attorney Kevin Thompson. This interview explained how network marketing was very different from pyramid scheme.


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