More Tips to Avoid MLM Scams

Wednesday, March 17th, 2010 at 6:41 pm

I thought it was important to give another round of tips to avoid MLM scams. The reason for my post today is a recent issuance of a cease and desist order by the Montana Attorney General’s office to a network marketing company. The cease and desist order accuses this company of running a pyramid scheme in which participants only make money by recruiting others.

This brings to light one of the greatest questions that needs to be asked with any network marketing company to avoid MLM scams. The question is simple: “What is the product?” When a company offers no tangible product or service, but only a portal through which people can shop, the red lights need to be flashing.

This question is so critical for a couple of key reasons:

Identification of the company’s primary business
Identification of the target market
Determination of the company’s viability in the years to come.

I personally refuse to represent any company that does not offer a tangible product or service to their customers. If a small business owner could not make a solid retail business out of their product or service, I run the other way. If I am going to recruit others to represent this company or opportunity, it is critical that the product or service be able to stand on its own two feet. It is this foundation of credibility that supports our team building efforts.

We’ve all heard the term “buyer beware.” As always the greatest way to avoid MLM scams is to do your homework.