The binary compensation plan has recently gained popularity because of its simplicity and the growth opportunities involved. Unfortunately, the plan has been so misused that it has been hit with many state and federal regulations. Government actions against such companies have been very public, resulting in bad press for the companies and a bad reputation for MLMs using the binary compensation plan.
Pyramid schemes are not a simply exchange of money… MLMs with products can be illegal pyramid schemes. One example of an MLM – pyramid scheme with products that got shut down by FTC is JewelWay: http://www.ftc.gov/opa/1997/11/jewel-2.shtm. The FTC says nothing about product being reasonably priced. That’s a slippery slope when people will pay thousands for a fashionable handbag. 

Our training: We offer live dials training calls weekly. We actually call our own leads and prospect like were a distributor looking for new reps. We usually have hundreds of people on our conference call,  they are muted and are able to listen as we discuss the various options with the prospect. Every one of these calls are slightly different and after every time there is a call made we do an analysis of the response and break down the elements of the call. This is what training is about!  Imagine listening to this live this is not theory but it’s real training. The best of all, these calls are absolutely free to our customers and our future customers.

How MLM companies are NOT considered Pyramid organizations is beyond me! They are all scams by the very nature of their organization structure. Those who start or get in early benefit directly from the efforts of those beneath them, forever. Not to mention the fact that most product sold through any of these MLM organization’s is to the dealer network itself. The top dogs are making money regardless as long as there is new blood coming in. And the best way to keep new blood coming in is to incentivize those at the lower middle and below to continue recruiting to build “a network of their own”. And those on the verge of “breaking through” who have already invested a small fortune in products along the way that are sitting on their pantry shelves NEED to keep recruiting. The very thing that differentiates a Pyramid scheme from an MLM is that an MLM sells an actual product. That is it. It doesn’t determine who that product is sold to as it should since we know that most product is sold to the worker bees and not to the general public for long.

Also called pyramid selling or network marketing, multi-level marketing companies grow revenue by hiring and recruiting non-salaried employees referred to as distributors, influencers, consultants, salespeople, or promoters (among other names). In other words, employees generally receive compensation from performance through a pyramid-shaped compensation system.
An example of a high-profile multi-level marketing company defending its practices is Herbalife Ltd., a manufacturer and distributor of weight-loss and nutritional products with more than 500,000 distributors. Although the FTC had been investigating Herbalife, it was activist investor William Ackman who shed a national spotlight on the company by shorting $1 billion of the company’s stock in 2013. Ackman accused the company of operating a pyramid scheme and backed his allegations with a bet the company’s stock price would fall under the weight of the scam.  
Multi-level marketing is a legitimate business strategy, though it is controversial. One problem is pyramid schemes, which use money from new recruits to pay the people at the top, often take advantage of people by pretending to be engaged in legitimate multi-level marketing. You can spot pyramid schemes by their greater focus on recruitment than on product sales. 

Sales agents in MLM companies frequently work for commissions on sales. In addition, MLM agents typically get commissions on the sales of their “downstream.” Sales agents are able to recruit new sales agents into their “downstream,” and those sales agents can recruit new agents as well. An MLM sales agent usually makes money from each sale in their “downstream,” creating a form of passive income.
MLM salespeople are not employees of the MLM company. Participants do not derive a salary/wage, nor do participants receive remuneration from the MLM company for their invested labor and expenses in their MLM "independent business". The income of participants, if any income is made at all, is derived only from commissions on their personal sales or their share of the commissions on the personal sales of their downlines (the MLM compensation structure).
Multi-level marketing is a strategy some direct-sales companies use to encourage their existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits' sales. The recruits are the distributor's "downline." All distributors also make money through direct sales of products to customers. Amway is an example of a well-known direct-sales company that uses multi-level marketing.

It was not until August 23, 2005 that the State Council promulgated rules that dealt specifically with direct sale operation- Administration of Direct Sales (entered into effect on 1 December 2005) and the Regulations for the Prohibition of chuanxiao (entered into effect on 1 November 2005). When direct selling is allowed, it will only be permitted under the most stringent requirements, in order to ensure the operations are not pyramid schemes, MLM, or fly-by-night operations.
There are many red flags that should warn you away from a business or financial opportunity, but the biggest is a lack of a product. Programs that push recruiting over the sales of a product or service might be a pyramid scheme. If a company isn’t focused on acquiring more customers to buy its products, but rather it's interested in "building a team" or membership of sales reps, consider it a red flag. The foundation of any good MLM business is about getting products and service to end consumers.
comes down to leadership and the individual. I even changed teams to find the right mentor and coaching when I knew I was struggling. I found a team that trains people to be some network marketing professionals, and really the math is simple and anyone can make residual income if they do it correctly. The problem is people sign everyone up they can and then most drop out. You only want to work with those that are committed to do the work and be able to work closely with them until they are a developed leader. In all actuality ssigning everyone up as an associate is against the rules and a big no no. Having customers benefits everyone and in most business models like the one I’m with I make more commission off customers than associates that aren’t working.
(May 2017 update: did this go under?) The sign up cost will make you do a triple take (almost four figures), but you get to set your own retail price on every product you sell. If you’ve got the skills to make people cough up the cash for their products (which, btw, are pretty legit), you could definitely make that money back. They’ve also been winning plenty of awards (even a growth award from the Direct Selling Association themselves).
Getting leads is just one step in the sales cycle. Next, you need to qualify them to determine if they're a good fit, then make your pitch, and finally, follow up. Many network marketers don't like the sales process, but it doesn't have to be hard or scary, especially if you start with leads who've come to you specifically to know about what you offer.

I’ve been using these leads for over 2 years now and have built large organizations. Not only are the leads of great quality but the support is excellent. I use a simple six-step process to train my team. When you have leads who are all looking to start a home-based business, this is a very simple and duplicatable process. Cal Faber Victoria B.C. Canada –


I’ve heard all the arguments. “How can it be a pyramid scheme if it’s legal?” Through some crafty loopholes. The fact that there is an actual product to sell allows them to operate and give the appearance of legitimacy. “You just haven’t found a good MLM yet.” Wrong. A good MLM is an oxymoron. “But how is this any different from any other major corporation where the CEO makes the most money?” Because the people below the CEO at legit companies get paid salaries and have actual benefits. They don’t depend on endless chains of recruiting new members.
Great article and thanks for taking the time to write this.. however I can see why your business didn’t fly as you had hoped. Mlm is a people’s business and that means that it IS the interaction with each other that strengthens working together. Yes you need to be self motivated but you also need to be a supporter too. Networking also eliminates the need to do constant appraisals. You don’t work you don’t get paid. That’s music to a corporate managers ears. Networking is not for everyone… but where else can you invest for such a small amount and have all the other aspects of business done for you and all you have to do is go get customers and recruit more customer finders and have no ceiling on being paid for that. As for the product you promote.. you choose something you like. My original passion as a woman was make up so I joined that type of business. Got so passionate I qualified as a beautician and onto other certificates then I discovered essential oils.. I needed supplies but minimum trade orders were over £3000 each time. Mlm on the other hand was order as my demands and finances could afford. So my interest in mlm grew. Now I would not go back to traditional office work. When I know when I apply myself I can exceed what ANY employer thinks I’m worth
Is Home Depot going to run a class on how to make submarine sandwiches? No. Makes no sense, right? Would people be attracted to that? Like that one I might attend. I like submarine sandwiches, they’re pretty good. That I might attend but I’m going to go there and be like why am I in a building supply company? I’m not going to buy anything. It doesn’t make sense.

I’d like to point out a few things: statistically something like 96% of businesses fail within the first 5-10 years, which is a much more impactful loss, both financially and time wise, than the few hundred dollars one puts into whatever product they’re using in MLM. So realistically the success rate as a “self employed business owner” with MLM is probably a bit better than it is with launching a traditional business, or at least consistent with it. It takes discipline and tenacity that many people don’t have- that’s why they chose to remain employees in the first place.

My network marketing Leads are the best way to follow the golden proverb that somebody must have dropped coming down the mountain, because when it fell, it hit so hard that everyone doesn’t think twice about it just being plan common sense. And I don’t know why it isn’t folded into every California cookie because it is the best way to gain a fortune. This proverb that needs much repeating is “Work smarter, not harder.”
Just because you paid for the lead, it doesn’t mean that you should get emotionally attached to each one. Buying leads is, and always will be, a sorting process to find your next business partners. If you are terrible at the phone, either, buy MLM leads or get a job at a telemarketing company. Gaining experience on the phone is worth its weight in gold. Every big recruiter or enroller is good on the phone. Most of them used to be terrible but experience made them better.
Breaking into the world of travel bloggers, hotel hoppers, and digital nomads with #wanderlust was one of the best ideas MLM ever had. Everyone out there wants to work remotely nowadays, and a huge portion of those people want to do it so that they can travel. So, a remote income opportunity with a travel MLM just makes sense. WorldVentures is hitting this niche hard, having been named one of the Inc. 5000’s fastest growing companies twice in a row. 

Experienced marketers understand the benefits of buyer leads. That's why we like to include buyers leads in our featured MLM Phone Leads and MLM Postal Leads. Our MLM Buyers Leads offer 100% U.S. names: preferred because your response rates will reflect the fact that buyers have already expressed an interest and have purchased something to help them get started. That's a real plus!

Have you ever thought about running your very own Classified Ads site? Imagine not having to worry about hosting, maintenance, backups, or any of the other hassles that comes with running a classifieds site. With the Youmongus Ad Network we will setup your own classifieds site, with a domain name of your choice, and you'll be able to charge for ads, run banner ads, and build a large and successful ad site.
The Federal Trade Commission issued a decision, In re Amway Corp., in 1979 in which it indicated that multi-level marketing was not illegal per se in the United States. However, Amway was found guilty of price fixing (by effectively requiring "independent" distributors to sell at the same fixed price) and making exaggerated income claims.[47][48] The FTC advises that multi-level marketing organizations with greater incentives for recruitment than product sales are to be viewed skeptically. The FTC also warns that the practice of getting commissions from recruiting new members is outlawed in most states as "pyramiding".[49]
Much has been made of the personal, or internal, consumption issue in recent years. In fact, the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme. The critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.[46]
Thanks for this list. Loved seeing Monat as #1! I am a Market Partner for this company and the money is crazy good because the products are awesome. I was disappointed to see Plexus at #28 and I wasn’t impressed by what you had to say about them. Plexus is NOT a weight loss company. Their products promote a healthy gut and they are clinically proven to decrease inflammation and balance blood sugar. Weight loss is a natural side effect of body balance. The products work and there are a lot of people I know personally making good money with Plexus.

comes down to leadership and the individual. I even changed teams to find the right mentor and coaching when I knew I was struggling. I found a team that trains people to be some network marketing professionals, and really the math is simple and anyone can make residual income if they do it correctly. The problem is people sign everyone up they can and then most drop out. You only want to work with those that are committed to do the work and be able to work closely with them until they are a developed leader. In all actuality ssigning everyone up as an associate is against the rules and a big no no. Having customers benefits everyone and in most business models like the one I’m with I make more commission off customers than associates that aren’t working.
A long time friend that you lost touch with for the last 10 years gives you a call and asks to meet up. After meeting up and breaking the ice, he/she then introduces a new revolutionary product and how you stand to get rich by selling it. Throw in jargons like passive income and downlines, you suddenly realise you’re beginning to be sucked into the dream they are selling.

MLMs are successful because they provide tempting possibilities — the more you recruit, the more you sell, and the more you make. The possibility for income seems almost endless. However, only a few companies can make this dream a reality. So how do you spot the good ones from the bad ones? Look at the product. If the company has put time and money into creating a valuable product, they will put time and money into selling it.


Serving our clients since 2005, CustomLeads.net is your "one-stop shop" when it comes to Network Marketing Leads, Home Based Business Leads, and Business Opportunity Leads. We provide not only up-to-date lists and contacts to bring sales and affiliate building to your business, but we also provide you with highly qualified individuals who are truly interested in pursuing a work from home business. If you're looking for people who are interested in home based business opportunities, we have that information available for you.

They’re sliding, though. Revenue is falling in North America and their sales force is shrinking. Revenue slid 19% in 2013 and 7% in Mexico. Skip ahead to July 2015 and revenue is still spiraling downward, with a 17% drop (5). Analysts blame Avon’s failure to maintain a strong identity for its products as well as the strong dollar. Lesson: Always re-create yourself.


PM Dollars, is our way of rewarding you for using our products and services, and sharing them with your friends and new signups. You'll earn 10% of anything you order in PM Dollars. Whether you order a Leads Package One Time, once in a while, or every week, 10% of your order will be added to your PM Dollars account after it is filled. You can then use those PM Dollars for products and services we offer in your PM Dollars account.
To prove that we give you more in value, than you could ever give us in money, we provide you with MLM Training and Lead Management Systems at no extra cost. In fact, anyone can get a Free Lead Management System, which also includes a Free Phase 2 Customizable Marketing Site, and any package that has email leads gets a Free Autoresponder with Professionally written emails included. (You can even modify the autoresponder emails at any time.)

Once you’ve made your connections, presented your opportunity, validated you and your company, ask for the sale! So many opportunities are missed simply because a person was too busy connecting and chatting, instead of asking for the business. You are looking for serious people to join and become a part of your team, don’t forget to ask. The experience and hands on training you get by just getting on the phone and making calls, is priceless. The more you are calling leads, the better you will become.
 Our Real Time Short Form Leads are the greatest thing around when it comes to Home Based Business and MLM leads! These leads are the freshest possible! Here’s how it works: a person accesses the internet and requests information about working from home. Within seconds of when they click “Submit,” their information is emailed directly to you! By delivering the leads instantly, if you are logged onto your email, you are able to contact them immediately, possibly while they’re still online! Our high-speed technology will work wonders for you and you’re business! Real Time Leads are available in the United States only.

"The business opportunity leads here at Oppseekers are setting a higher standard in the industry! I have experienced a greater response rate and faster team growth since I started using their leads! I have also taken it a step further and recommended these leads to my entire team and now I am getting them for FREE! What a concept! Thanks Oppseekers!"
Many of the beautiful sites offered no type of ongoing training, and that was something that really needs to be be a part of any good MLM leads programs. The sites we recommend all provides training which also includes scripts, handling objections, presentation, following up, closing, and other MLM leads topics. There are some HOT MLM leads sites out there that truly delivered on this qulaity of MLM leads training.
The cons of mlm are that most people getting into mlm don’t understand mlm. They apply the incorrect philosophy and it becomes a recipe for disaster. I see dozens of people monthly that join a mlm, don’t work and don’t yield any results and as a result, leave with a bad taste. But with correct leadership that problem could be averted. That is precisely why I love my company. It has the best leadership (in my opinion) and they properly train their agents.
They’re sliding, though. Revenue is falling in North America and their sales force is shrinking. Revenue slid 19% in 2013 and 7% in Mexico. Skip ahead to July 2015 and revenue is still spiraling downward, with a 17% drop (5). Analysts blame Avon’s failure to maintain a strong identity for its products as well as the strong dollar. Lesson: Always re-create yourself.
They were hot. These guys caught some shade for over-inflating their health products, but what health MLM doesn’t inflate their prices “a tiny bit” so they can dish out those juicy commissions? Well, their fiber product was 900% more than “leading alternatives” and their Trioten protein blend was 600% more expensive than Herbalife and Shaklee proteins. Ouch.
It seems to me that in your assessment of the top 25 MLM that you had a preference for one essential oil company (Young Living) over the other (doTERRA) which outranked YL. You give a glowing review of YL and state that they “set the standard” & are a “solid pick”. While you seem to question why people could possibly like doTERRA with comments like “Users swear by the oils, and for whatever reason, people (and not just people in Utah) are strangely passionate about telling their friends about them.” For “whatever reason”??? “Strangely passionate”??? You come across as bias. You also incorrectly state that YL set the standard for quality, while they may have been the first legit EO Co. they didn’t set the standard. Infact their lack of wanting to find the purest most potent EO available (which comes from the country the plants are indigenous to) and having strict testing to ensure the purity and potency is why doTERRA was founded, doTERRA set the standard because YL didn’t want to. And that is why doTERRA is the #1 EO company and why Young Living is not. Not to mention how well doTERRA takes care of the suppliers through Co-Impacting and how they’re improving their lives through The Healing Hands Foundation. The foundation builds wells, schools, provides personal care products as well as many other things. doTERRA is changing lives for the better all around the world so that is one of the “reasons” we’re “strangely passionate” about spreading the good news of doTERRA essential oils. Not only are doTERRA EO more potent and purer making the the “solid pick” they are literally saving peoples lives.
I have been looking over your sites and viewing the many videos. It sounds appealing however there are many many . . . many lead generators out there, some that are well established (and very good at what they do) and so my question is why would I pay you to train me for 5 weeks and think I could compete (let alone generate income) in the short period you mention?
×