Frequently found confusion between the term MLM with game money (money game). MLM is essentially a system of distribution of the goods. The number of bonuses earned from sales omzet distributed over the network. Instead, the game bonus money obtained from recruitment, not omzet sales. The difficulty of distinguishing MLM with game money earned bonuses due to be combined with a specific composition and recruitment bonus between omzet Commission sales.
The money game systems tend to use a pyramid scheme (Ponzi scheme) and the last person to join would be the difficulty of developing its business. In MLM, though it is possible to have had many subordinates, but without omzet course bonus will not be retrieved.
Information about the type of MLM right can refer to the Regulations the Secretary of Commerce of the Republic of Indonesia No. 13/M-DAG/PER/3/2006 concerning the conditions and procedures for the issuance of License sales efforts directly with load restrictions expressly set forth in Chapter VII.
Problem in the MLM often occurs when the system the Commission leading to the cash game. The membership fee has been second-in-command in a distributed virtual promoter Commission while the price of goods became too expensive to cover Commission payments to the promoter. In the long run, this makes the Commission become unbalanced, where the Commission has exceeded the price of goods is reduced the price of production.
This certainly will make make the consumer at the highest level to get the cheapest price or even profit when knowing how to cultivate a network of schools, while new consumer joins get losses indirectly because getting the most expensive prices without getting a Commission or the Commission is incompatible with the efforts that have been made so that eventually the new members to find new consumers are stimulated in order to get a Commission that could cover the virtual loss of Jesus.
Violation may also occur when a company provider of system MLM promises something to excess the impossible can be achieved. For example, if consumers can get 10 of every network level ranks immediately should contain 10 members, then he will get a bonus of $ 10 billion. At first glance this looks enticing and easy, but if consumers use his senses, he actually had to recruit 1010 subordinates or ten ten, namely a number of powers of 10 billion new members (the current human population 7 billion).
Today, it has grown to a viral marketing system which is one of the MLM model. Some of the things that distinguishes, among others:
There is no recruitment bonuses because of cost-free to join.
The marketed product is a product of dynamic, for example cell phone pulses.
The Bonus is only earned by having recurring reservations.
Product prices are cheaper or almost the same as the conventional market price.
A Commission or a bonus for each transaction carried out relatively small.
A Bonus would be significant in large networks.