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There is a common misunderstanding about multi-level marketing (AKA network marketing) companies.
Most people think that they are scams and they should be avoided at all cost.
While some might be scams, there are many MLM companies that are honest and trustworthy companies. In all instances you should do your research before starting a business on your own.
In a nutshell, what is MLM?
A MLM business involves the direct sale of a product from a personal recommendation. In return you would get a commission for making that recommendation that led to the sale of the product or service. You can compare it to most drop shipping companies. You advertise a product or service and when you make the sale you get paid.
The answer to this question is no, but it is commonly thought of as a scheme.
When it comes to business scams, MLM often becomes part of the discussion. Some people equate the tiered system to a pyramid shape, and therefore an illegal scheme. That's a simplified way to think about it, but that isn't the correct interpretation.
In an MLM, the sales reps are promoting a product and giving their personal recommendations in exchange for a commission on the sale. MLM companies have multiple levels where commissions are split.
You'll have to do you due diligence. While some reps have said that huge commissions can be earned through the initial launch phase, creating wealth for the long-term should be your goal if you're focused on long-term financial freedom.
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