Most Multi-level Marketing (MLM) business models involve selling to close family, friends & business colleagues and recruiting them in your downline. You pay a small sum of money to join and then make money both from your own sales and the sales of the people that you have recruited.
Initially your friends will humour you and take time out to listen but in the longer term they will slowly start to keep their distance or even become downright intolerant of your attempts to treat them as a cash cow.
What happens when you do manage to persuade a close friend to join your MLM programme? Most of the time that person will have no business experience and chances are that they will fail; up to 80% of new start-ups fail within the first five years. This could lead to you losing your best friend.
Another problem with the MLM business model (which is legal) is that it is hard to distinguish from a pyramid scheme that is illegal.
The main difference between a legitimate MLM business model and a pyramid scheme is that in MLM, real products are being sold to real people whilst in a pyramid scheme you make all of your money from the people that you recruit;...
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