Multi-level marketing (MLM) has gotten a bad rep because it has been associated with scamming people. Its reputation has been tarnished as there are marketers who use MLM companies to deceive and mislead people just to earn money.

However, you need not avoid MLM all the way. MLM is a legitimate business model used by many companies all over the world and advocated by many business magnates, including Robert Kiyosaki and Warren Buffet. Nevertheless, you still need to take caution when joining an MLM company to protect your money and avoid being scammed.

Here are simple steps to avoid becoming a victim to MLM scams.

1.         Beware of outrageous claims. A company that makes crazy claims about the potential income of the business is no good at all. Many network marketing “leaders” show unnatural intense excitement to have you in their company. They would promise you good results in a short amount of time, which can be exciting but also too good to be true. It is so easy to get excited because who wouldn’t want to be successful right away?

However, the outrageous claims coming from these people’s mouth may not be genuine at all. If you encounter a company that’s making outrageous statements, then it’s a red flag that you should be suspicious with.

Find time to research all thethings you need to know about a multi-level marketing company that you want to join. That way, you’ll have a better idea of what’s really waiting for you once you join the business.

2.         See if the company focuses more on recruiting than selling. If you’re looking for an MLM business, check whether they concentrate on recruitment than selling.

It’s worth to note that a genuine MLM company does not just focus on recruiting people to join the company but also extensively market their products to consumers. The lifeblood of any business is the products, and the profit should mainly come from the sales. Thus, if the MLM company you want to be a part of puts emphasis on recruitment only, then better stay away before making any decision.

3.         Notice if they pressure you to buy something. Are they pressuring you to buy a product that isn’t even useful to you or is of poor quality? Are they pushing you to upgrade your membership by offering “special packages”? Be careful with this kind of MLM companies that will do everything to take your money away.

A good MLM company will lay out all their offerings to you; they will not even try to convince you because they know the value of their products and the benefits you are getting. They will let you decide freely and will respect whatever your decision is.

4.         Be wary of the training they provide. In every business, training is key to your success. A great MLM company should provide free training to their members on how to increase their sales and grow their network.

However, if the training provided by an MLM company focuses more on helping you become a successful recruiter than a successful product marketer, never hesitate to take a step back as it can just be another MLM business scam that you don’t want to be associated with.

5.         Be wary of poor communication. Open communication and transparency are very important in any business. During the orientation, ask questions if there’s something that’s not clear to you. Examine how the person recruiting you responds to your questions. If he tries to put your question aside for later and never gets back to you, if he gives ambiguous answers, or if he seems unsure of what he is saying, then you got your sign.

A legit MLM company will always be open about their processes, especially if there are risks involved. In the event that they cannot answer your question right there and then, then they will take note of it and get back to you as soon as they can.


There are actually a lot of legitimate and successful MLM businesses operating all over the world that are worthy of your investment. You just have to do your own research and take your time in making a decision so that your hard-earned money will not go to waste. Scour the Internet for MLM resources and reviews, like the ones provided by Network Marketing Now, and educate yourself about the industry. By doing so, you are saving yourself from being scammed.

By Chakraborty

Dr Chakrabarty is the Chief Innovation Officer of IntuiComp TeraScience. Earlier she was Assistant Professor of Delhi University, a QS ranked university in India. Before that she has held research positions in IIT Mumbai, IIT Chennai and IISc Bangalore. She holds 2 patents and over 20 research publications in her name which are highly cited. Her area of research is in smart technologies, integrated devices and communications. She also has a penchant for blogging and is an editor of Business Fundas.