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How risky are network marketing ventures?

My aunt is constantly trying to get my family and me to invest in network marketing businesses. At first the idea of it sounds good. They are well thought out and seem to have the potential to be a lucrative financial move, however, my aunt and her husband don't seem to make any money themselves. At the end of the day my conscience screams "pyramid scheme" and that can't be good. Am I wishing upon a star by getting on this bandwagon? Or are my voices inside my head correct in telling me that this could lead to nothing or even worse, disaster?

Public Comments

1. Most are scams. If that is a multi-level marketing (MLM) company, save your money and avoid it. The only people making money in MLM schemes are the early investors or those who exploit enough downstream salespeople to support themselves. Those people might insist, "How am I exploiting my downstream?" Answer: because your downstream should be allowed to buy from your upstream just like you; you add nothing of value to your downstream, but you take a large commission out of their sales.
2. alot of people make network marketing things out to be get rich quick schemes. The are not at all like that. Network marketing things are like anything else in life in order to be good at it you have to devote time. Lots of people think you can only do a hour of work a day and make a million dollars. You devote 8 hours a day to a job, why would you ever expect to do anything less.
3. MLM's legitimacy can be determined by how they actually do business 1) Do they have real products to sell? If they don't, run away ASAP 2) Do they emphasize selling products, or recruiting more people to join? (recruiting people to join is the sign of "pyramid scam") 3) Will you actually able to sell those products more than once to someone? (i.e. is it products that people just use, or actually use up?) 4) What sort of training do they offer? Do they actually hold sales seminars and sessions to help you sell more stuff? Or do they actually teach you how to grab more people? 5) Will they let you follow someone around to see how they do business, or they just rush you with pressure tactics like "join today!" ? 7 things you need to consider before joining any opportunity http://richdadobservations.blogspot.com/2010/01/7-things-to-consider-before-you-jump.html
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