Unfortunately the network marketing business has unfairly received a bad name. It's often been labeled a fraudulent get-rich-quick scheme. And, sadly, there are many companies out there operating network marketing scams. However, there are also those offering a legitimate money-making system. So, how do you sort the wheat from the chaff when you're new to the world of network marketing?

First, you must determine how the company is earning their income. Genuine network marketing companies earn most of their income from the sale of products or services. Avon is an example. Although network marketing is heavily relied on in their business model, most of their revenue comes from the makeup they sell. Only a small portion comes from their referrals.

So, with that being said, if the majority of a company's income is coming from referrals, (meaning they don't have a solid business plan), chances are they are a pyramid scheme or a ponzi scheme, (where network marketing is an elaborate investing scam). The infamous Madoff scandal that recently hit the news is an example of the latter, although it was a very complex ponzi scheme.

Now, after you've determined whether or not a company has a solid business, you need to check their overall reputation. This is important because some network marketing business can still be scams, even with what appears to be a solid business plan. An example can be seen in health insurance. On the surface, a network marketing company promoting that type of service seems not only legitimate, but also very profitable. But in reality, they are fraudulent... something you find out when it's time to make a claim.

For that reason, you need to check other resources to ensure a business is valid. The Better Business Bureau is one example. This is an organization that publishes complaints about any business, whether it's legitimate or not. And, as a result, they can be really helpful in helping you determine whether or not a network marketing company is worth your time.

You could also see what other people are saying about a company online. In fact, if a network marketing company has any clout, I guarantee that someone has made a comment on it, whether it's on a message board or on a social networking site. If not, depending on where you are, you could open up a new thread and ask if the members have had experience with that company.

In conclusion, don't assume that just because a company uses network marketing to promote themselves that they are another fraudulent get-rich-quick scheme. Sure, you might have to do a little bit of background research to determine their legitimacy, but if they have a solid business plan along with the right buzz, they are probably a winning opportunity.