In an average multi-level marketing or network marketing arrangement, individuals associate with a parent company as an unbiased contractor and are compensated based on the sales of products or service, as well as the sales accomplished by those they bring to the business.
In the best MLM company, commissions are earned only on sales of the company's products. No money may be earned from recruiting alone ("sign-up fees"). Some, less legitimate, companies produce revenues primarily by attracting new participants or selling them marketing services, in place of selling actual products. One must analyze the compensation plan to ascertain whether participants are paid from actual sales to customers and not from new-recruit bonuses or business support sales. - source (wikipedia on MLMs).
Initially, Burnlounge seems like a wonderful revolution in the music industry. Through my own personal internet surfing I've run across countless people who have their very own " Burnlounge Stores" and thought nothing of it!
In case you aren't familiar with it, Burnlounge is really a company that enables users to setup a digital music store. You subscribe under among three different levels for a set up fee along with monthly fees. At the bottom you obtain the chance to setup your own personal store within the site where people purchase digital music from you that you select to carry, and you obtain a commission from these sales. At the very top level, not merely do you obtain this, but in addition the ability to recruit (and earn an advantage from recruiting) others to open their very own burnlounge store. They themselves will also be able to recruit in the normal MLM setup. You get bonuses from everyone signing up as well as a commission from both yours and their sales.
This can be a "legal pyramid/MLM" ;.Unlike the normal misconception that all pyramids are illegal, pyramid companies only become illegal when they break the FTC's rules. These rules are set as much as ensure that many profits result from the merchandise and not the recruiting. Even calling them illegal at that point is misleading. It really means the FTC will take action to shut them down. Taking a look at the digital music marketplace you will see that Apple selling mp3s for the same price as Burnlounge proposes barely breaks even, with a large market share. Burnlounge store owners can't compete with that large market share, and the immediate conclusion is that those that can be found in at the larger subscription levels stand to achieve much of these profits from the recruitment of others https://scamrisk.com/burnlounge/.
This would be considered a red flag to whoever has considered working together with this company. Leaving the merits or lack thereof of MLM as a small business model, you will see that Burnlounge is on the seedier side of such companies. They be seemingly walking the type of FTC rules while using recruiting that interests a young and sometimes naive audience. Their banners say "Wanna be in the Music Industry?" when owning this kind of store is nothing of the sort.
There are numerous other resources for musicians to obtain their music on the market, and for fans to feel an integral part of things. If you should be looking to do that, ignore Burnlounge and keep looking.
