The Multilevel Marketing (MLM) business offers unlimited income potential to anyone who is interested. It has been reported that MLM is a multi-billion dollar industry which offers all types of opportunities to the members.

As such, it is very common for anyone who is looking for more quality time to work at their own pace to enter into an MLM business. If you are not careful, you might just fall into a scam because not every promise is always fulfilled. So before you become a victim and waste your money on every MLM opportunity that comes your way, take some time to learn about those that came about but cheated people off millions.

How to know if it is a scam?

First of all, you must be aware that even the biggest and most renowned companies could be running a scam. An MLM company can be listed in Bursa Malaysia and still try to victimize its members of millions. So you need to be careful and not believe everything you see or hear.

Take note that the government of Malaysia (and almost every other government in the world) does not allow any pyramid schemes. What then does a pyramid scheme entail?

Below are some pointers:

  1. When you are required to ‘invest’ a certain amount of money without obtaining any tangible goods or services.
  2. When you are required to find members without some sort of product or services. Your members are then required to ‘invest’ further. The more they invest, the more they are ‘supposedly’ got back.
  3. When you are required to purchase products uncontrollably and unreasonably through a commitment which you might not be able to finance.

It is very important to note here that pyramid schemes are sometimes camouflaged as MLM businesses by unscrupulous companies. If you feel that the product or service is not up to mark and that the company is merely changing hands (buying from one supplier and selling to you), then there is a case to be concern here.

Ultimately, be wary of what the company wants from you. Obviously, it is about money but if you are not getting what your money’s worth, then there is no reason to invest a single sen into it. In most cases, there will be evangelists who will be trying to talk you into investing and some which could even tell you to get your friends and families involved.

Research Research Research!

Always remember that not everything which is new and ‘revolutionary’ is good. Do your homework before entering into an MLM business. Check out if the business or brand has won awards. Find out about these awards on whether they are legitimate. You can follow these guidelines:

  1. What is the origin of the company? Is it listed in the country of origin?
  2. Who is the founder? Is the person a professional or just any Tom, Dick and Harry?
  3. What is the product sold? Are they manufactured by the company itself and goes through international standards for quality and processing?
  4. How long has the company been around (both in its country of origin and in Malaysia)?

After that, check out the compensation plan. If it is all about getting members, then you need to be careful. If you can actually earn profits from getting new members and selling the products, then it could be a sound investment.

Money Games MLM Companies

You would have come across a lot of companies offering ‘unlimited income’ through their network marketing models. This is often referred to as MLM (Multi-Level Marketing) companies where they have all types of unique and creative ways of helping you earn an income. Most of these MLM companies will promise you ‘unlimited’ income but you have to be careful not to be cheated into such scams as not all MLM companies are legitimate.

So how do you identify if an MLM company is legitimate. The most important factor that you need to consider with MLM companies would be on their products. A company will be doubtful if they are not selling any tangible products. If they are only asking you to invest money and that they don’t have much to sell, then you must be careful.

No legit products

There are MLM companies which talks a lot about income and such but seldom deliberate on their products. No doubt they have products to sell, but when you attend their talks and gatherings, nothing much is being talked about the product. This means that they do not put any emphasis on their products.

To know if a product is credible, you can always check the background in terms of origins, manufacturing and research. Many unscrupulous MLM companies source for cheap products through local OEM manufacturers and then claim to have a product to sell. They usually have very little idea of what their products can do. When products take a back seat, the company is not interested in selling them at all.

Keyword used by scam companies

Another rule of thumb that you can follow is that scam MLM companies usually use the word ‘Global’ in their company names. This is to create an illusion that the company is worldwide or international. Although not all MLM companies with ‘Global’ in their name are doubtful, if you come across any of them, it would be best to carry out a background check before investing any money with them.

Ultimately, the most ideal thing you should do before investing with MLM companies is to learn more about them before starting. If their products are among the best in the industry and had won awards, you can always verify them.