As direct selling business continues to dominate other forms of multi-level marketing businesses, some scrupulous individuals grab this opportunity to commit fraudulent activities aimed to misleading people of earning big bucks by just signing-up as their “new recruits”.
“How does one escape the pyramid scheme trap and avoid getting scammed?”
This question can be really difficult to answer, especially if you are just a newbie in the direct selling industry. Let us guide you in making the right choices through these following insights on how a legitimate direct selling firm operates from one under the pyramid scheme.
What is a “Pyramid scheme”?
In general, a company operating under the pyramid scheme entices people to join them with false promises of huge earnings by just paying a required membership fee to become members without any real products to sell. Their main goal is to gather as many recruits for you to earn and gain back what you have invested. Any future earnings can only be derived from the entry and registration of new members who are willing to pay the same fees that you have paid. Most companies under the pyramid scheme don’t last long and those who entered into these schemes have no chance of getting back their investments once the company collapses.
Here are some checklists to look into to identify if the company is really a legal direct selling business or influenced only by a pyramid scheme.
- Ask yourself, how much is the required actual membership fee to become a certified new distributor or direct seller?
Most direct selling companies only charge minimal membership fees to any interested individuals who want to start a direct selling business. Normally, you will only pay a reasonable amount for any starter kit required. A pyramid scheme company, on the other hand asks every potential member huge start-up fees to become a new member, so be extra cautious with this kind of pay-off on your part.
- Tangible products to be sold should exist from the very start
Next, after the membership cost is the product concern. Are there tangible products that you will sell in order to qualify for future earnings or commissions? A reputable direct selling company is concentrated on how effectively you will market their products, make a sale and increase their company’s brand awareness campaign. Their products are reasonably priced and offer real benefits to the consumers while a pyramid scheme is only after the higher percentage turnout of new recruits that are willing to pay to become members.
- Guarantee of products not sold
Before you even pay any amount of money for membership, verify first what will happen if you acquired a huge volume of goods, then, later on decided not to pursue with the direct selling business. What happens to any of the products not sold? Registered direct selling companies abide with the policies being practiced under the DSA Code of Ethics and assure every member with buy-back options of any unsold inventories up to 90% of their original prices.
- Earning profits that are too good to be true
Think twice if a company claiming to operate under the direct selling that promises extremely high profits in just a short span of time. Keep in mind, a realistic goal in any legitimate directs selling business will give you modest income for starters with potential business growth as one improves with his/her selling skills and satisfying income will be generated once you have established a good lead of satisfied clients who will in return be your word of mouth to other potential buyers, increase the possibility of new clients or repeat clients and referrals along the way. No amount of success is claimed in a matter of days or weeks because only hard work, time and a lot of selling will be invested for you to see amazing results.
- Career advancement
Recognition of direct seller’s performance is actually based on his/her combined efforts to continuously meet the required sales volume or quota. Any career promotions or advancement to managerial positions are carefully assessed on the member’s overall sales marketing ability and that is to establish a good client to consumer relationship from any sale made and improve the image of the company. For companies under the pyramid scheme, any career advancement can be bought with what any member is willing to pay or invest, since no actual selling of goods is involved.
Entering a direct selling business entails a lot of research, planning, investment of time, money, energy and finding a reliable direct selling company who can back you up with perfect and sellable goods. Don’t just put your hard earned money to some illegal operations like those under the influence of a pyramid scheme, for before you come to realize it, all your investments will completely vanish together with these dishonest promoters.
Entrust your direct selling career to a company that has solid track of record of providing real business opportunities to those who really work hard to earn. Keep a vigilant eye to any scammed activities. Empower your mind with the right knowledge and relevant information by getting all the professional help in areas of direct selling business. Find a great direct selling mentor who has the expertise and direct selling skills to guide you to the exact path of becoming a certified and successful direct seller. Strive to excel in anything you do.