Network marketing is a legitimate form of business with unlimited earning potential in the form of residual income. Unfortunately, this venture is often given a bad name due to being incorrectly associated with illegal pyramid schemes despite the two being completely different entities. Understanding what network marketing really is and leveraging it to your fullest ability helps to understand what it isn’t. Let’s take a look at the legality of network marketing.

Learn to Recognize the Hype

If you ever dabbled in Internet or affiliate marketing, then more than likely, you have stumbled upon various marketing schemes. Most have a flashy title page with a headline in big red letters that reads something along the lines of:

  • Learn how a high school dropout stumbled upon an Internet secret that earned him $10,000 in just seven days.
  • Learn my secret formula that is guaranteed to earn you $120,000 in the next six months working out of your home.
  • Find out how this stay-at-home mom discovered an underground secret that helped her earn a six-figure income in just three months.
  • Become the lucky few to join my inner circle and learn my magical formula that will pump at least $5,000 a week into your bank account.

If you scroll down, you will then hear the author’s sob story about how he was broke and living in a shabby apartment, in debt, and dumped by his girlfriend. However, he miraculously discovers an “online secret” that magically pumps an endless cash flow into his bank account. The story is accompanied by images of mansions, Ferraris, private jets, and private beach resorts, all purportedly belonging to the product’s creator, who, in most cases, hides behind a pen name and doesn’t even include a pic of himself.

This is not to say that you should automatically dismiss such products as scams. In fact, most actually include information, software, and products that are helpful to a small degree. However, 99.5% of users will not experience the same type of dramatic income explosion the product creator claims to have made. There are dozens of network marketing programs that make these kinds of bold promises. You have to keep in mind that while most programs based on a multi-level marketing model are legitimate, you will be sorely disappointed if you buy into the get-rich-quick nonsense.

The True Essence of Network Marketing Behind the Hype

To address the issue of the legality of network marketing, it is important to understand that network marketing is a legitimate system with an actual product or service that members can sell. Affiliates make a wholehearted effort to expand their network through multiple venues, such as implementing SEO, being active on social media, hosting teleconferences, and creating their own incentives for those who make a purchase. Aside from selling the merchandise or service, affiliates also recruit new members into the program and receive a small percentage of the commissions from the sales of those recruits.

What to Look for in a Legitimate MLM Program

First of all, keep in mind that a legitimate MLM program will have an actual product or service to sell, will not require you to pay to become a member, or charge a monthly fee for you to join their exclusive “VIP” program. These are all trademarks of a pyramid scheme and should be avoided at all costs. Network marketing programs are available in nearly every industry, and you should pick a program in a niche that you are at least semi-familiar with. Some of the products and services you can consider becoming an affiliate for include:

  • Dietary supplements
  • Cosmetics
  • Magazine subscriptions
  • Monthly software subscriptions
  • Downloadable products like apps and e-books
  • Coaching and self-help programs

Keep Your Goals Realistic: Your first year in network marketing

After going over the legality of this system, getting into network marketing is not as easy as you think. Be sure that your goals are reasonably achievable and don’t buy into the hype of those who claim that by using their program, you can make five to six-digit figures with zero experience and working only a few hours a week. This is not to say that this isn’t possible, as there are real-life success stories of individuals who experienced that level of success. However, bear in mind that these people are the exception rather than the norm.

Also, when starting out for the first time, your goal should be more about establishing a strong network and building authority around your name and brand rather than making a sale or recruiting; all this will come in due time, though in the beginning, it should be about building your foundation.

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