How Do You Evaluate Network Marketing Compensation Plans and Differentiate them from Pyramid Schemes?


It would be biased for me to source other network marketers opinions about network marketing and its compensation plans. So I source only credible outsiders here, who are not making money from the industry model.

"The stairstep breakaway plan remains the most tried-and-true type of plan out there today — and the most likely to survive in the decades to come." - Attorney Jeffrey Babener.

"Its chief advantage ...", says White, "... is that it has a good track record, is easy to modify, is accepted by regulatory agencies, and is driven by volume and performance."

(Alfred White is a senior management consultant at San Diego-based Hamilton LaRonde & Associates, Inc.)

"Look for a plan that has the lock-in feature; that is, when you reach a certain level, you "lock in" and cannot be demoted because of a temporary drop in monthly performance." - Attorney Jeffrey Babener

(Note: Forever has this "lock-in feature". Once you've achieved a level, you'll never lose that commission percentage, no matter what your sales volume is for that month. For example; once you're promoted to "Manager" and make 48% profit margin on the retail selling price, you'll always make 48%, no matter what.)

"No matter what other advantages a plan might have, always ask this pivotal question:

"Does it emphasize getting products or services into the hands of consumers; or does it emphasize making money by finding new recruits?

If it falls into the latter category, run away — fast.

In the end, says White, it’s the productnot the compensation plan — that drives success." - Attorney Jeffrey Babener

Source: ​https://mlmlegal.com

Note
: Forever's emphasis is clearly placed on getting their products into the hands of consumers. They prove this by encouraging their distributors to sell their saleable products to retail customers by starting out their new distributors with a generous 35% retail commission on the retail selling price of their products. Retail consumers buy their products because they love Forever's products.

Pyramid schemes like to disguise themselves as legitimate direct-selling companies.


The trouble, according to Joe Mariano, president of the Direct Selling Association, the industry's trade group, is that ... "there are a lot of pyramid schemes that like to disguise themselves as legitimate direct-selling companies. That creates an environment where there can be confusion."

Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan.

If the money you make is based on the number of people you recruit and your sales to them, it's not. It's a pyramid scheme.

Pyramid schemes are illegal, and the vast majority of participants lose money.

Determining whether a multi-level marketing company is a pyramid scheme can be difficult, however.

"Identifying a pyramid scheme masquerading as an multi-level marketer requires a fact-intensive inquiry," the FTC said in one report. It "entails a complex economic analysis including an in-depth examination of the compensation structure and the actual manner in which compensation flows within an organization."

'The break-away program I think over time, has clearly stood the test of time both legally and from a business standpoint.' - Jeff Babener


Which programs have stood the test of time, and which have gone by the wayside? Which compensation plan should you choose so that your company is legal and stands the test of time? Learn how to ask the right questions to determine a legitimate operating MLM company vs. a pyramid scheme.

"The break-away program I think over time, has clearly stood the test of time both legally and from a business standpoint."
- Attorney Jeff Babener, Minute 4:15

"There probably are many, many illegal companies operating in the United States. They may or may not ever be caught. They may not be caught, but what will happen is, they will go out of business because a company that is built around just being a game, or built around just being a "deal", is not a company over time that will sustain.

Only a company with a real product, a quality product to which there is a market place ... that company will sustain because it's product driven."
- Attorney Jeffry Babener, Minute 4:49

http://mlmlegal.com/MLMBlog/new-video-understanding-mlm-network-marketing-compensation-plans

Note: Forever has stood the test of time for 41 years. Uninformed network marketers, who criticize break-away programs, are speaking from a biased point-of-view (a bad opinion they were probably told by their upline), and just don't know what they're talking about.

How can one argue against the sound legal advice of a well established attorney (Jeff Babener)? I'm proud that Forever is a break-away and has assured their company hasn't placed themselves in any legal jeapordy with their compensation plan.

Marketing Fraud - An Approach for Differentiating Network Marketing from Pyramid Schemes


This document is for honest skeptics seeking the truth.

Some misled people call legitimate network marketing companies, such as Forever (the company I'm involved with), a "pyramid."

A lot of innocent skeptics are confused, have been misled by cynics, and have difficulty differentiating network marketing (AKA, multilevel marketing, MLM) from pyramid schemes.

The FTC (Federal Trade Commission) has ruled that real network marketing is 100% legal and legitimate, and have equal stature as franchises.

Ironically, many distributors, WHO THINK they are in network marketing, are also confused, and don't realize they are in an illegal pyramid.

This document, from somebody not making money from the network marketing model, should help clear up this confusion and misunderstanding, provided they are sincerely interested in getting themselves fully informed.

As you see, Forever is no Mickey Mouse operation. The company succeeded in building their multi-billion dollar operation BECAUSE of their excellent products people really want.

Wayne Gerald - Authorized Reseller ID#: 001-002-601-920

If you want start a legitimate business, review our free Business Apprenticeship program.