What You Should Know About Multi-Level Marketing.... Part 3

Internet Marketing By The Way Of MULTI-LEVEL MARKETING [ aka MLM..Network Marketing ]

In certain states most Multi-Level Sales plans can be classified as illegal since it is unlawful to organize a "pyramid club" or to induce or attempt to induce membership in a "pyramid club".

In such states a "Pyramid Club" [No...not an Egyptian vacation resort!] means a sales device whereby a person, upon condition that the person make an investment, is granted a license or right to solicit or recruit for economic gain one or more additional persons who are also granted such license or right upon condition of making an investment, and who further perpetrate the chain of persons who are granted such license or right upon such condition. Pyramid clubs also include any such sales device which does not involve the sale or distribution of any real estate, goods or services, including but not limited to a chain letter scheme.

Pyramids are illegal because they are inherently fraudulent. In order to achieve the profits that are promised, a never ending chain of participants must be recruited. A saturation point will be reached and no more recruits will be available. When this occurs the most recent recruits can't receive what has been held out to them to cause them to join, and they lose all or part of what they paid to join the scheme. After just a few levels there would have to be millions or billions of participants to keep the chain going.

Chain letters are not the only illegal pyramids. As noted above, Multi-Level sales schemes can be illegal also. Many of them are nothing but chain letter schemes with the nominal addition of some goods or services to be distributed via Internet marketing or direct mail marketing. Legal Multi-Level Internet marketing systems are designed to distribute goods and services and are not disguised as endless chains. A pyramid club is present if participants make investments in return for the right to recruit, for economic gain, others who in turn recruit additional participants.

Both the "investment" and "recruiting" elements must be present to constitute an illegal pyramid scheme. "Recruiting for Economic Gain" means if anything is received directly or indirectly as a result of recruiting new participants. Even earnings based on sales made by new participants recruited, also constitutes economic gain.

Evaluating Multi-Level sales schemes is a difficult process and many considerations must be answered in order to determine the legality or illegality of each Multi-Level plan or program. Is there more stress toward recruitment than for the sale of the product? Are the claims, as to what the earnings are, based on actual experience of typical participants? (They better watch out for the entries made in the IRS computers pertaining to their fabulous income claims.)

Are there misleading representations? You would have to get your attorney to review specific circumstances of each plan or program in order to determine which ones are legal or illegal! Even then you can't be sure. I am certain however, that if you send any of them that are questionable to the Postal inspectors office you will generally get a negative report back, regardless of whether the plan may be legal or not.

Thinking conspiracy? The fact that the Federal Government, through the private, non-governmental agency known as the Federal reserve, can print and issue green paper out of thin air and cause usurious interest rates across the country, or that the States can hold lotteries that are considered illegal for private agencies or persons, has nothing to do with the way people are not allowed to play the Multi-level or chain letter game!

I Hope You Found This Article to Be Beneficial and Eye Opening!...Please Read the Next Page... Our Final Thoughts Page

Mr. Merokee Says: "One Should Always Err On The Side Of Caution When Commiting To Any Internet Marketing Program"