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Ordinary people are making extraordinary income working from home onrepparttar internet. There are many ways to make money onrepparttar 122514 internet butrepparttar 122515 great majority of people struggle and fail trying to do it on their own.

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The Difference between MLM and illegal Pyramid Selling

Written by Frann Leach

How can I tell a legal Network Marketing business from an illegal Pyramid?

Network Marketing also known as MLM ('multi-level marketing'), relationship marketing and referral marketing, isrepparttar 21st century way for entrepreneurs to build a high income, without having to make huge financial investments. Most MLMs don't need any premises beyond a computer desk and perhaps a filing cabinet (though some may need storage space for product). Unlike franchises (the business opportunities ofrepparttar 122513 20th century) in generalrepparttar 122514 upfront investment is small and training is usually free or very cheap. Overheads are low or non-existent, profits can be very high indeed.

At first glance, MLM is very similar torepparttar 122515 pyramid schemes which have been made illegal in most ofrepparttar 122516 West. Inrepparttar 122517 pyramid, a representative pays his initial stake when he is recruited and is then shown how to recruit other representatives. Every representative recruited brings a bonus and adds torepparttar 122518 potential residual income. But, if no customers are required, sooner or laterrepparttar 122519 whole structure will collapse, because there is nowhere forrepparttar 122520 income to come from. In pyramid schemes,repparttar 122521 people atrepparttar 122522 top arerepparttar 122523 only ones who can make money, because there is a limited pool of potential recruits, and no other source of income. It's pretty obvious that no company can survive for long without any customers.

How to distinguish a Pyramid from an MLM

< d> In MLM, it is possible for a recruit to overtakerepparttar 122524 person who recruited them, and end up making more money than them< d> In a pyramid scheme, your place inrepparttar 122525 matrix is fixed. You cannot overtake your sponsor. Even if they do nothing after recruiting you, they will still make more money than you.< d> < r>
< d> < r>
< d> In MLM, nobody makes any money until there is a sale:repparttar 122526 company's income derives from its customers, and so doesrepparttar 122527 income ofrepparttar 122528 company's representatives< d> In a pyramid scheme, you are paid bonuses for recruiting other representatives, regardless of whether or not they achieve any sales or gain any customers. Because there is no income torepparttar 122529 company, sooner or later this scheme will collapse.< d> < r>< able>

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