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Multi-level Marketing Or Pyramid Scheme? That’s The Question. - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Multi-level Marketing Or Pyramid Scheme? That’s The Question.

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Herbalife, Advocare, Scentsy, Mary Kay, you may have heard of businesses like these before. They're called multi- level marketing, independent distributors, direct sales, and in some more negative cases, pyramid schemes. A viewer called us, blowing the whistle on one of these local businesses, and wanted us to investigate how can you spot the difference between a legitimate company and a scheme.

Kelly Kraft sells books, direct from her to the buyer. Usborn Books and More is a multi- level marketing company, meaning you sell products, but you are looking to sign up distributors underneath you.

"They earn their amount, and then I earn an override of what they sell, as long as I am still working," says Kraft. And there's many other companies just like this one.

"Multi-level marketing there's a right way to do it and there are a lot of good companies in that field, so again really the focus selling the product to end users, it really should not be about signing people up underneath you to sell the products," says Dan Hendrickson with the Better Business Bureau. The Better Business Bureau is warning people to know the difference between multi-level, and a pyramid scheme, which can leave you with empty pockets.

"The first thing to do is really evaluate the offer, research the company at www.bbb.org, and avoid offers that are too good to be true," says Hendrickson.

Usually legitimate companies have little sign up fees, and small investments, but even if it is legit, it doesn't mean you are going to get rich.

"I love these books, I love getting the packages," says Kelly.

Kelly, and the better business bureau say sales are not for everyone, don't get sucked into something that's not for you.

"You have to be passionate about it, if you are not passionate about it; you are not going to succeed," says Kelly.

And they agree, if you want to make a living do this there must be a need for your product, and pick a company without tons of direct sellers to compete with.

Link to The Better Business Bureau: https://www.bbb.org/

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