training others to sell products. The distributors' compensation includes their own sales and a percentage of the sales of their sales group (downline).

“So,” you say, “that just sounds like a good idea for making money.” Well, it IS a good way for making money. The problem is that it can be illegal.

Do you see that tip-off word, ‘recruiting’? The other tip-off that this is a MLM scheme is the phrase, ‘percentage of sales’.

There is nothing illegal about setting up and affiliate program and PAYING a percentage of sales to those who sell your products or services to others. There is nothing illegal about COLLECTING the percentages that are offered by the producers of the products or services. That is simply good business and a more than just common practice in the Internet business world.

The problem arises when you start COLLECTING percentages of sales from people whom you have recruited to sell the product. Then another level is added and it becomes multi-level marketing. Even one additional level can illegal but there are MLM schemes that will have many, MANY layers.

The main Internet banking and money exchange on the Internet is Paypal. Paypal employs full-time personnel to search for and identify MLM schemes. When these schemes are uncovered, the account (and all attached accounts and credit cards) are frozen.

Yes, it might be true that sometimes Paypal could misidentify a perfectly legitimate business as a MLM scheme but it doesn’t happen very often and the problem can usually be resolved in just two or three business days. This very thing happened to a friend of mine not long ago. It was resolved but not without him being able to prove that his business was not a MLM scheme.

This does point out the fact, however, that there are those who are looking for illegal MLM schemes. You may think that you are very anonymous on the Internet but when you do business on the Internet you are not longer anonymous.

Beware of Lions

There are a lot of big hungry lions in the Internet marketing jungle. They are looking for easy marks...they love newbies best of all.

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