What Is Multi-Level Marketing?

I am sure that most of you have heard the term “Multi-Level Marketing” before, also known as MLM.  Another phrase you have also most likely heard is multi-level marketing scams.  Or another way you may have heard this described is as a pyramid scheme, and for good reason.

A lot of people who try to promote these programs will usually refer to them as a multi-level marketing program, as they know that “pyramid” is known to go hand in hand with “scam”.  I have never come across a multi-level marketing program (pyramid scheme) that is legitimate.

The problem with multi-level marketing programs is that the people who start the pyramid, the people at the top, are the people who make all of the money.  That is the whole point for them starting it, so that THEY make the money.  They could care less if you make money, they job is to make you think that it is an easy way to make money.

Let me break a pyramid scheme down for you into some simpler steps.

• 1.  Someone starts the multi-level program, often charging an insane amount of money to join.  Prices are usually somewhere between $500 to $1,000 to sign up, which is absolutely ridiculous.  You are basically paying to be put in the “referral tree”.

• 2.  The people who start the program find a bunch of people and make them believe that they can make a ton of money by simply referring people and having them do the same.

• 3.  Often after paying $1,000 or so to join, you don’t start getting paid until you make about 3 referrals…that means finding 3 other people who are willing to pay $1,000 (to basically be put in a referral tree).

• 4.  The first 3 referrals (or first few referrals) entry fee ($1,000) goes to the person who referred the person.  So that means that the people who start the program get ALL or MOST of the money for the first few hundred or thousand referrals (depending on how many people they get to sign up, how many each of those people get to sign up and so on).  Since the first 3 referrals goes to the person who referred the person, that means the people who started the program get all of the money for the first set of people they get to join, and then all of the money for all the people that those people get to join, and all the people that those people get to join.

• 5.  As you can see, the money trickles to the top, letting those who started the pyramid scheme the most money.  They make it seem like you can make tons of money because you get paid on like 10 different levels (so you get paid for the people you refer, all the people who they refer, all the people that you referred – all the people they referred – and then all the people those people referred, and so on and so on for 10 levels).

• 6.  The problem is it often never gets that far.  And because the first few referrals by each person goes 2 levels up, the people who started the scheme get rich, leaving you screwed.

• 7.  What they try to tell you is “If you just refer 6 people, then those 6 people each refer 6 people, then those 36 people each refer 6 people, then those 216 people each refer 6 people, then those 1296 people refer 6 people…as seen in the picture below:

I’m sure you can see the problem.  And as I mentioned, the people at two levels above you get paid the whole amount of the first few sales (or they say you get paid for all sales 3 levels below you or something similar), so it just screws everyone that is not at the top of the pyramid.

Hopefully you were able to follow along with my description, I know it is a little confusing, but the bottom line is that you don’t want to get involved with multi-level marketing, more commonly known as pyramid schemes!

Instead check out my wealth programs (especially Wealthy Affiliate), or my drop shipping programs, as these are the real ways to be making money on the internet.

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