Is Direct Sales Safe?
When starting a direct sales business, you’ll most likely have people warn you against the dangers of doing so. They’ll recount their own stories, or perhaps a friend of a friend’s tale of losing thousands of dollars in a direct sales business. And yes, they may even use the term “pyramid scheme.”
While there are a number of companies out there with the sole purpose of taking advantage of you financially, there are plenty of them that are legitimate companies out to help you make a profit from selling great products, such as Amway, Avon and Mary Kay.
Most direct sales companies are multi-level marketing companies, which means you receive revenue from your own sales and that of the people you recruit under you. And many times, these companies are legitimate, like the ones we mentioned above. But there are plenty of others out there that give direct sales a bad name.
So, how do you know if the company you want to work for is a pyramid scheme?
First, let’s define a pyramid scheme. Pyramid schemes are illegal. They involve companies set up strictly to defraud you and others. They rely on recruiting new direct sellers and making money off them by charging exorbitant fees up front and convincing them to purchase large amounts of products with very little value.
Do Your Research
When looking for a direct sales company to represent, do your research. Search for company reviews online. Ask around to see what people who’ve worked for the company before have to say. Google the company to see if it’s appeared in the news and for what. Use your detective skills to see if the company is legitimate. And if it’s not, stay far away from it.