IS MLM A LEGIT BUSINESS?

If you are interested to find the answer of this question, probably you have been invited today for a MLM business opportunity or may be one of your friends or family need advice from you on this topic. In both cases, you are at the right place.
At Twittlink, you will find the authentic knowledge which will allow you to analyze the legal status of MLM industry and value of any existing or upcoming MLM company.

What is MLM?

There are many terms used for the MLM (multi-level-marketing) but most popular are network marketing, affiliate marketing, direct selling and referral marketing. (Though these are slightly different from each other in nature) MLM is actually a strategy to sell products or services by words of mouth.  MLM companies intend to save the money used for advertisements and claim to distribute that money among the people who refer their products to others.

Simple explanation of MLM

In simple words, it’s a business where individuals recommend products to their connections and get commission for that particular sale. Everyone who buy that product become an honorary affiliate to get commission if willing to promote that product further. So people manage to create a team for maximum income. For this purpose, companies arrange trainings, events and seminars on regular basis.

History of MLM

This concept was introduced in 1945 and first MLM company incorporated in 1959 was AMWAY which is still among the most successful MLM companies with $8.8 Billion revenue per year.

Is MLM legal in all countries?

The world is dealing MLM Industry with 3 different attitudes

  1. MLM is considered a legitimate business in most of the countries, if it meets certain conditions. It is a legal business in United States of America, Japan, United Kingdom, Italy. Germany, France, Canada, Australia and United Arab Emirates etc.
  • MLM is prohibited in many countries including China and Saudi Arabia. It has been banned with full force without differentiating any good or bad company. (China recently allowed Direct Sales with strict restrictions)
  • Many countries don’t have laws about MLM, but despite the unclear status people and companies practicing MLM unless they have any complaint.

Why do people hate MLM?

MLM is at risk of being a pyramid scheme, if it will not meet the requirements. Many get-rich-quick schemes disguise themselves as MLM companies which created confusion in MLM industry. A lot of people lose their money and relations because of fake and fraud so called MLM companies.

What is a Pyramid Scheme?

If a company selling and delivering products to clients this will be considered a MLM company but if a company only enrolling people by taking money and distributing that money as recruitment incentive, it is definitely a pyramid scheme.  

Check, if a company is Legal?

It’s hard to answer without taking in-depth knowledge about that particular company. You have to do your own research to find out the intention of any company. To investigate you should consider few points which will help you to explore the truth.

  • First of all see if the company is really a MLM company or a Pyramid scheme?
    (Learn their whole concept and try to understand if it’s an MLM or a Pyramid scheme as discussed above)
  • What is their compensation plan?
    (Calculate, if the distribution is sensible or they are distributing more than enough)
  • Who is the Owner?
    (Try to check owners credibility. Know more and more about his/her past experiences)

  • What are the products?
    (Analyze the products value. If the products are useless or beneficial for community?)
  • Are products unique and valuable?
    (Are the products can solve any kind of  issues or can help to improve users lives by any means?)

  • The Products price is near to market price or big difference?
    (Compare the price with the Quality and try to find out if they believe in monopoly or competition?)
  • Do they have any license or legal document to operate in your country?
    (Consider it compulsory requirement. Avoid the companies if they don’t show their license to operate in your country or legal permission from government)

Final Words about MLM

MLM itself is an outstanding business with over $250 Billion volume and over 150 Million people involvement. Personalities like Bill Gates, Warren Buffet and Robert Kiyosaki has publicly endorsed MLM.

Bill Gates and Warren Buffett during a conversation (left to Right)

Top 10 MLM companies Worldwide

We have ranked the Top 10 MLM companies by their Sales volume in 2018. The sales volume figures have been confirmed from the official annual reports of these companies for financial year 2018. As expected, 8 of them are from United States of America. Surprisingly, Chinese MLM companies failed to secure any position in Top 10.

Amway
is an American company, positioned on No. 1 with $8.8 Billion sales volume.

Avon
is an American company, positioned on No. 2 with $5.5 Billion sales volume.

Herbalife
is an American company, positioned on No. 3 with $4.9 Billion sales volume.

Vorwerk
is a German company, positioned on No. 4 with $3.9 Billion sales volume.

Natura
is a Brazilian company, positioned on No. 5 with $3.4 Billion sales volume.

Mary Kay
is an American company, positioned on No. 6 with $3.2 Billion sales volume.

Nu Skin
is an American MLM company, positioned on No. 7 with $2.7 Billion sales volume.

Melaleuca
is an American MLM company, positioned on No. 8 with $2.1 Billion sales volume.

Young Living
is an American company, positioned on No. 9 with $1.9 Billion sales volume.

DoTerra
is an American company, positioned on No. 10 with $1.7 Billion sales volume.

IF you are interested to know more about MLM business, we will recommend you to visit BUSINESSFORHOME which is a best tool to find MLM companies data, reviews, ranks and achievers.

Advert

spot_img

Latest

Former OCC official says crypto has backing but dollar ‘may not’

Former OCC acting comptroller Brian Brooks claimed that cryptocurrencies like Bitcoin “actually are backed by something.” 2678 Total views 20...

Snag a pair of Beats Solo Pro headphones for over 45% off

Products featured here are selected by our partners at StackCommerce.If you buy something through links on our site, Mashable may earn an affiliate...

Dan Tapiero launches $200M investment fund for late-stage crypto firms

The SEC filing notes the 10T Fund’s first sale occurred on Jan. 29, with $76 million remaining to be sold. 5017 ...

Netflix’s ‘Crime Scene: Vanishing at the Cecil Hotel’ is a gripping exploration of the Elisa Lam case

Amy Price, the Cecil Hotel's manager at the time of Elisa Lam's disappearance, Image: Netflix All products featured here are independently selected by our editors...

Chris Harrison steps down as ‘Bachelor’ host after highly criticized interview with Rachel Lindsay

Longtime "Bachelor" host Chris Harrison is stepping back from his hosting duties. Image: Eric McCandless via Getty Images By Nicole Gallucci2021-02-13 20:55:37 UTC This is officially...