In a typical multi-level marketing or network marketing arrangement, individuals keep company with a parent company as an unbiased contractor and are compensated based on their sales of products or service, along with 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, instead of selling actual products. One must analyze the compensation plan to find out 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 just like a wonderful revolution in the music industry. Through my own, personal internet surfing I've run across countless individuals with their own " Burnlounge Stores" and thought nothing of it!
In the event you aren't knowledgeable about it, Burnlounge is a company that enables users to setup an electronic digital music store. You subscribe under one of three different levels for a set up fee along side monthly fees. In the bottom you obtain the possibility to setup your own personal store within the site where people purchase digital music from you that you choose to transport, and you obtain a commission from these sales. At the top level, not just do you obtain this, but also the capability to recruit (and earn an advantage from recruiting) others to open their own burnlounge store. They themselves are also able to recruit in the normal MLM setup. You receive bonuses from everyone signing up along with a commission from both yours and their sales.
This can be a "legal pyramid/MLM" ;.Unlike the common misconception that pyramids are illegal, pyramid companies only become illegal if they break the FTC's rules. These rules are set around make sure that many profits result from the product and not the recruiting. Even calling them illegal at that point is misleading. It just means the FTC usually takes action to shut them down. Looking at the digital music marketplace you might find that Apple selling mp3s for the exact same price as Burnlounge proposes barely breaks even, with a big market share. Burnlounge store owners can't compete with that large market share, and the immediate conclusion is that those who can be found in at the larger subscription levels stand to gain much of these profits from the recruitment of others.
This would be described as a red flag to whoever has considered working together with this company. Leaving the merits or lack thereof of MLM as a business model, you will see that Burnlounge is on the seedier side of such companies. They seem to be walking the type of FTC rules while using recruiting that attracts a and sometimes naive audience. Their banners say "Wanna be in the Music Industry?" when owning such a store is nothing of the sort Click Here.
There are lots of other resources for musicians to get their music on the market, and for fans to feel a part of things. If you are looking to achieve that, ignore Burnlounge and keep looking.
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