Multilevel marketing, or MLM, is big in the United States. It has become so common that you could be involved with an MLM company and know at least 10 people in your close circles who are involved with at least one MLM company as well. In many ways, this is a good thing. You get to pursue something you are passionate about and that makes you feel good about yourself. At the same time, you can solidify friendships with others who sell for the company.
However, you do need to be careful when you are considering opportunities, selling products and recruiting for your sales network.
Making claims that cannot be proven
Legally, you could get in trouble for making claims that research has not verified. For example, say that you swear by a product that has helped you lose weight and feel more energetic than you have in years. You can discuss your own experience, but if you say something such as, “This product will help you lose 30 pounds in a month,” that could be problematic, especially if there are no reputable scientific studies to that effect. Someone could accuse you of deceptive advertising and perhaps even of a financial crime if a lot of people buy the product. A similar principle applies when you try to recruit salespeople and say something like, “You are guaranteed at least $3,000 a month in income.”
Jumping in too quickly
One reason that some MLM reps resort to making unproven claims is because they feel they have no choice. They jumped into the business too quickly, buying into hype that, in hindsight, seemed shady, and now they are stuck with high credit card bills and a lot of inventory they need to move.
If a business idea appeals to you, research it as thoroughly as possible before buying into it. Ensure that it is a legitimate MLM opportunity and not a pyramid scheme. A few easy markers are whether the focus is more on recruiting other people than selling something, whether the company will buy back unsold inventory for at least 80 percent of the cost you paid and if you must put down a large chunk of change up front to begin.