"Money. That's right. The green stuff. How would you like to have a little more? How would you like to never have to work again?"

We hear this generic chatter everywhere. Network marketers attack us on all fronts--emails, parties, flyers, and even at work. They claim to have found the golden path to extra income through network marketing and are not afraid to let you know it.

Network marketing, also called multi-level marketing (MLM), is based around the concept of word-of-mouth advertising. Instead of spending millions on ads, a parent company contracts independent salespeople to market consumer products and services.The products range from vitamins to telecommunications, but the underlying concept is the same; just think of a pyramid. As salespeople try to sell their product, they also recruit new salespeople, who in turn recruit others. You get a cut of everything sold by those underneath you, just as those above you in the pyramid get a portion of your earnings. The more your own recruits sell and recruit, the more your share of money grows exponentially. This idea of limitless residual income sounds great in theory, but do not hold your breath. A high failure rate and a long history of scams should lead you to think twice before joining one of these "life-changing" companies.

Devout network marketers cringe when they hear the phrase "pyramid scheme." It can only mean skepticism, and to network marketers, skepticism is a parasite slowly eating away at their income. Pyramid schemes are illegal scams that have given all of network marketing a bad name. MLM companies often avoid the label "network marketing," preferring "affiliate marketing" or "home-based-business franchising."

Skeptics have good reason for worrying that an MLM business may be a pyramid scheme. Many programs place an emphasis on a recruitment commission, and not on the actual sale of a product. In some cases, there is no actual product being offered. By the time victims realize it, they have already invested hundreds, if not thousands, of dollars into a bogus company. While MLM is similar in structure to a pyramid, pyramid schemes do not create wealth; they create profit from the losses of other people's wealth. Don't get sucked into a pyramid scheme. For more information visit pyramidschemealert.org.

Many people get into network marketing for a quick buck. What they don't understand is, like any business, you have to build it. It can take years to see profitable income, which explains the high drop out rate. Most are not prepared to put in the 5 to 20 hours a week necessary to build their business. According to Al Thomas, multi-millionaire network marketer and Las Vegas resident, "Most people give up before they get started."

Network marketing attracts millions of people--you get to work from home, be your own boss, and the amount of money you make is directly connected to how hard you work. Unfortunately, being a salesperson isn't for everyone. Constantly trying to sell something to your friends, family and everyone else can wear you out almost as fast as it does your potential customer. Do you really want to sell things to your grandmother? Are you ready to have your friends and family thinking, "here they go again," every time you come around?
 

Sources: network-marketing-works.com; ftc.gov; falseprofits.com