6 Red Flags to Watch Out Before Joining a Network Marketing Company

One reason why probably you’re here because someone invited you to check out their business. Or you’re just curious about network marketing.

A short answer to check if your company is legitimate:

Check if they manufacture the product and they choose to use the network marketing way to distribute the products.

If they don’t manufacture the product then they are a network marketing company. Legitimate companies own the products and choose the channel network marketing in distribution.

It doesn’t matter how many levels there are to the organization, everyone is gaining some income or value.

This is because there is a real product and real customers.  

In a pyramid scheme, only the people at the top receive any benefit, and there are no products and no customers.

mlm pyramid scheme

Are network marketing companies also pyramiding companies?

Just to clear out the idea of a pyramid, every business are structured as a pyramid. It becomes illegal in a network marketing perspective if the joining fee from the new members are paid to the people on top.

The long answer to answer if the company is legitimate:

Red flag #1 – There should be no or only minimal joining fee

Red flag #2 – You make money by signing up new members

Red flag #3 – Small customer base / No customer accounts

Red flag #4 – Product is low quality, no comparison from other products

Red flag #5 – Unrealistic / Confusing Compensation plan

Red flag #6 – You can’t earn more than the person above you.

In conclusion, Network marketing is one of the best way to start off a business, you learn by doing and there’s a support system backing you up. Just make sure you join the right company.

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