Are you interested in a home business or in becoming self-employed but you aren't sure how to tell a multi level marketing or MLM scam? This is a good thing because of course there are many scams and schemes you can get involved with on the internet and in person that will simply cost you money, not make you money. And no one wants to lose money through any type of scheme or MLM scam! Unfortunately those who come up with schemes and scams are usually very good at making them look legitimate and in mimicking real ways to market and sell products. So how can you tell the difference? Is there even any way to differentiate between the two? Let's take a look at real and legitimate MLM pay structures and companies and an MLM scam and then perhaps you can better protect yourself. And remember, these tips apply for internet businesses and those you see in person.

The difference between multi level marketing that is real and legitimate and an MLM scam is that most scams and schemes don't actually sell a product. Or, they may sell a product but also charge someone for the right to sell that product. Pyramid schemes refer to the arrangement of getting no product in exchange for what you pay, but instead you're just purchasing the right to resell those rights to someone else. You pay money to join the scheme and then get money from someone else to join the scheme. No product is ever actually received, which is how you know an MLM scam!

In other cases of an MLM scam, you are purchasing an actual product but to have the privilege of selling that product yourself you need to pay for the right to do so. This may be referred to as a reseller's rights or licensing rights, but in any case you're required to pay a price before you can sell. This is an MLM scam, since you should never have to pay someone to actually work for them!

There is a difference between an MLM scam and a legitimate MLM pay structure. In real multi level marketing, you get a commission from your own sales and the sales of those you recruit to work under you. This is simply a type of pay structure that is perfectly legal and legitimate and should not be confused with an MLM scam. As long as the customer gets a product and you don't need to pay to sell, everything is probably legitimate!

There are many nationally known companies that work by multi level marketing and which are not an MLM scam, so there's no need to think that all multi level marketing is a problem. Being cautious is good but you don't want to also lose out on legitimate ways to earn a good living just because you're afraid of everything being an MLM scam, so educate yourself on the difference and you should be fine.