What is Multi-Level Marketing (MLM)?

The video explores multi-level marketing (MLM), a business model where agents sell products and recruit others to do the same, earning commissions from their recruits. While MLM promises high earnings, low start-up costs, and autonomy, the reality is often different, with many agents struggling to make significant income. The video discusses the legal and ethical aspects of MLM, highlighting the importance of due diligence before joining. It also provides indicators to identify MLM schemes, emphasizing caution when approached by friends or relatives with such opportunities.

What is the primary concept behind multi-level marketing?

• Selling goods directly to consumers

• Recruiting agents to sell goods and recruit others

• Manufacturing products for retail

• Providing customer service for a fee

In MLM, what is a 'downline'?

• The company that manufactures the products

• The network of agents recruited by an agent

• The products sold by an agent

• The customers who buy the products

What is the role of an 'upline' in MLM?

• To provide customer support

• To handle logistics and shipping

• To manufacture products

• To earn a portion of the downline's sales

Which of the following is NOT a promise typically made by MLM organizations?

• Low start-up costs

• High degree of autonomy

• High start-up costs

• Unlimited earnings

Why might MLM agents feel trapped in their roles?

• They have a contract with the company

• They have unsold stock they need to offload

• They are required to work full-time

• They have no training opportunities

Which market segments are commonly associated with MLM?

• Technology and software

• Cosmetics and health supplements

• Automotive and machinery

• Real estate and construction

What is a common legal concern associated with MLM?

• Lack of product quality

• High employee turnover

• Excessive advertising costs

• Potential for being classified as a pyramid scheme

What is a potential negative impact of MLM on personal relationships?

• Damaging relationships by recruiting friends and family

• Increased financial burden on family

• Increased travel requirements

• Lack of time for social activities

Which of the following is a sign that an opportunity might be an MLM scheme?

• The company has a physical store

• The company offers a salary

• The opportunity is presented by a stranger

• The need to invest in stock or training upfront

What should you do before investing in a potential MLM opportunity?

• Sign up immediately to secure your spot

• Consult a financial advisor

• Conduct thorough research and due diligence

• Ask friends for their opinions