Network marketing also know as Multi-level marketing is often a source of income only for those high up on the pyramid. All NM's will claim that they are not pyramid schemes and that they are different from the others.

One of the key distinguishing factors is whether there is more compensation for recruiting and sustaining new members or for selling the product. Be cautious if the plan requires a high amount of money to get in.

Find out how much of their product is sold to consumers and how much is sold just to dealers, making them them (or you) end of the line in terms of marketing product. Will you be required to buy a lot of product each year to maintain your status? Is there really a good market for ther product?

Do some online research on your specific company. Get information from people who have nothing to sell you.

Here is a start in your research:

Here is a link that might be useful: wikipedia on MLM's

I had a colleague who got into MLM in a big way. In order to avoid the "ponzi scheme" appearance, though, a certain dollar amount of goods must be sold every month. Once his friends and colleagues had all the snacks and soap powder they needed, that meant, in order to be considered an "active" member, he purchased the stuff himself. So, every month he was buying more stuff he didn't need in order to make his "points" or whatever. His apartment filled up with products. But it was okay, he told us, because, and this was the phrase the company taught him to use, he "bought it from himself."

Now I don't know about you, once I have purchased something, I consider myself the owner. I don't have to "buy" it again, from myself, or anyone else.

He ended up stealing from our employer and getting fired. He moved in with his newlywed, pregnant stepdaughter for a while, and last I heard had lived with and mooched off a series of relatives.

The MLM company has changed it's name, but not it's tactics. Your upline or sponsor will tell you that you're close to making it big, and strongarm you into spending a certain dollar amount every month, whether you can use, or sell the product, or not.

The thrust of the MLM was to buy whatever you usually buy "From yourself" instead of a store. Much greater savings come from a change of lifestyle. If you're truly in dire straits, you can borrow "The Tightwad Gazette" from your public library, free, and learn how to really cut your budget and save money.

Any company which attracts large crowds to hotel ballrooms with any promise of you making money by
a. day trading using specialty software
b. selling "fabulous" products to friends and neighbors
c. investing in real estate with no money down
or
d. wants you to "be your own boss"

is a very good way to part a fool from his money!

Some time ago I was invited by a friend, who "knew that I wanted to help people" to a meeting of a company in the insurance business - then, over 20 years ago, the company name was similar to that of an individual.

Later they sold mutual funds and changed their name to one sounding more corporate - which included letters sounding sort of like the major country in which they do business.

Later yet set up their own mutual fund management subsidiary.

Their proposal was that on a life insurance policy that would sell for about $525., the sales person would make $225, and the six people in his/her upline would make $50. each.

I objected - the person next above might make $50. for a limited time, due to training, etc., but this should reduce after while, and the person next above him/her not make more than $15 - 20. max., while the person next higher (who had a large number of people in his/her downline, not over $5.00 - 10.00, while the person next above that not make over $2.50, as there would be at least scores of people on whose work that person would be making an (should be small amount of) over-ride on each sale.

Not only that - I had two jobs:

Job 1: to sell insurance, and

Job 2: to (recruit) other people to go out to sell insurance, too.

I said that soon half of the people in that city of 20,000 would be selling to the other half!

My opinions went over like lead bricks.

Next meeting - the presenter did not allow questions during the presentation, and people could write down their questions and present them for him to answer.

Multi-level-marketing systems (which seem to change the terminology of how they refer to their tyupe of business fairly frequently, are great ...

... for the first guys in.

One should ask how long the company has been in business 0- they have a tendency to start with a great idea, go great guns for a while, then sort of peter out.

While those skilled in that type of business start another company - of similar style.

The first guys to sign up usually do quite well.

Some time ago, when I joined one where they dealt mainly in soap, the pricing structure was such that I bought somewhat more in one month than I actually had orders for - in order to achieve a much lower price level for the lot.

Then as next month there was no requirement that I buy a minimum amopunt monthly, I bought none.

They said that they were to have no more than 1 wholesale-level person per 5,000 population - to which I replied that that would mean 50 such people in our city of 250,000 or so. They said that they were considering a province-wide basis.

To which I replied that I'd known enough about the Fuller Brush enterprise to know that they, an established company had only 3 in our city - quite a difference.

I was not popular with them, either.

ole joyful

I've been doing tax preparation for 15 years. I've had many clients get into MLMs. Not one has made a penny of income over expenses. All of them dropped it within a year (though often it took them several months to payoff accumulated MLM expenses). All of them have been told lies about what they can claim as business expenses.

I've also had friends call me about joinging MLMs. That's not a pleasant conversation as I'm very vocal on my dislike of MLMs. Infact, most people are not very happy with a friend that tries to rope them into a MLM.

So unless your looking to throw some money away and maybe a friendship skip the MLM. Honestly, you will make much more money working a minimum wage part-time job.