Multilevel or “network” marketingplans  are a way of selling goods or services through distributors. Some multilevel marketing plans are legitimate.

However, others are illegal pyramid schemes. In pyramids, commissions are based on the number of distributors recruited. Most of the product sales are made to these distributors – not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate. Multilevel marketing is system of marketing which puts more emphasis upon the recruiting of distributors than on the selling of products. As such, it is intrinsically flawed.

If you’re thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan. Check  the company’s track record, its  products. Be skeptical if a distributor tells you that for the price of a “start-up kit” of inventory and sales literature – and sometimes a commitment to sell a specific amount of the product or service each month – you’ll be on the road to riches. Often consumers spend a lot of money to “build their business” by participating in training programs, buying sales leads or purchasing the products themselves. If you decide to become a distributor, you are legally responsible for the claims you make about the company, its product and the business opportunities it offers.

That applies even if you’re repeating claims you read in a company brochure or advertising flyer. If you solicit new distributors, you are responsible for the claims you make about a distributor’s earnings potential. Be sure to represent the opportunity honestly and avoid making unrealistic promises