There are people who believe that all MLM companies (that is, multi-level marketing companies) are scams. It is not hard to understand why these people hold such a believe, especially after getting to hear about the numerous people who have lost significant amounts of money (and time) on what turned out to be pyramid schemes and Ponzi schemes masquerading as MLM companies. In the spirit of the saying that it is 'better to be safe than sorry' then, most people opt to treat anything even closely related to multi level marketing as a scam and avoid it carefully.

Unknown to these people, unfortunately, is the fact that by avoiding anything to do with multi level market they are denying themselves of a good opportunity to make a good passive income, because not all MLM companies are scams. But just how does one differentiate the genuine MLM companies from the scams seeing that it is also an undeniable fact that some of the entities presenting themselves as MLM companies to the public are nothing other than cleverly planned scams, and then seeing that nobody wants to lose their hard earned cash through such clever scams?

Well, there a number of criteria you can look at in differentiating the genuine MLM-companies from the scams. It is important though, before launching into these, to mention that the traditional criteria for checking the genuine-ness of an entity, things like looking at the directors behind it, the premises it operates from and so on don't work in as far as the differentiation of genuine MLM-companies from scams goes, for the reason that most of the 'scammy' MLM-companies go to great pains to ensure that they present themselves as 'genuine organizations' by among other things getting great looking addresses to operate from, recruiting credible-looking directors and so on. Nonetheless, there are some infallible criteria you can use in differentiating genuine MLM companies from the scams.

For one, genuine MLM companies tend to have a real useful product that they sell and from which they get their revenues. Scammy MLM-companies, on the other hand, still tend to have some sort of a 'product' that they sell, but this is typically a smokescreen behind which they hide before starting to ask for 'registration' fees out of new members, which is in fact their real source of revenue, with the said 'product' only being a convenient smokescreen to hide behind.

Secondly, genuine MLM-companies never ask for membership fees (at least not huge amounts of them) from their new entrants. When they have to make payments to their old members for introducing the new members (which is what Multi Level Marketing is all about really), what the genuine MLM companies tend to do is to give the old members a portion of the profits and revenues made from the efforts of the new members introduced by them, rather than asking the new members to actually make direct cash payments to the organization so that it can pay the old members: because any organization doing that would be meeting the criteria for being a clever scam.