Ignorance Concerning Pyramid Schemes
There is an immense amount of ignorance out there with regards to what is a pyramid scheme. If you ask the average person what a pyramid scheme is, the answer you would get back would be something like “people at the top making a lot of money while people at the bottom do all the work and that you have to trick your family and friends into joining”
Then when you ask them the question “what is network marketing?” the answer you get back many times is, “isn't it one of those pyramid things?”
So there has to be a clear distinction between what is network marketing and what is a pyramid scheme.
Network Marketing Vs Pyramid Scheme
Many companies that use network marketing as a form of distribution, even after paying the various levels of distributors in the compensation plan when product or service is sold, are still financially better off than if they had gone the traditional route of TV advertising and main stream media advertising.
Also because the nature of the business is based on referrals, then the customer base that is developed is a lot more stable moving forward. Many people who try to attack the industry try to say that the products or services are overpriced and people don't really want them, so really you are only getting paid for the amount of people that you recruit into your business.
The reality of this is just not true, many companies that produce products or services within the network marketing industry have far more superior products then you would find on the shelf in the store. The marketplace pays for value so you would not expect to pay the same price for a Ford then you would pay for an Astin Martin. So when comparisons of being made, they have to be comparable, in other words they have to be considering similar types of products with similar quality.
Many people buy products or services through network marketing because they see the value in them and so our industry is no different to any other industry that is product or service driven.
Now let's look at a pyramid scheme, a pyramid scheme is established for the sole purpose to manipulate people and get the money out of their pocket. Often these pyramid schemes do not have a product associated to it or a service, but people get paid solely on the amount of people they recruit into the scheme after they have paid their money. They are often set up by people who know how to manipulate the system and so they are classed as a game to avoid tax on the earnings and they very often hit a critical mass fairly quickly. So the people who start the schemes rely on a lot of hype at the beginning to get the people in because they know the lifespan is extremely limited and in these cases, it is the people at the top that make all the money. Pyramid schemes are illegal and have no regulation, unlike the network marketing industry that is regulated by the Direct Selling Association.
The reason why the people who start the schemes use that structure that looks like a pyramid is because that structure is what every organisation is based on and they know through word-of-mouth, a message using this structure can spread fairly quickly. So here lies the problem many people don't know how to extinguish what is a pyramid scheme and what is a legitimate network marketing opportunity. this is why people need to educate themselves.
Corporate Organisation Chart Your Family tree Chart Network Marketing Organisation Chart
Success In Network Marketing
Once a person has done their due diligence into a company and decides that this is a product or a service that they can truly believe in and also wouldn't have a problem promoting, then they have to understand that this is not a little hobby on the side, but a serious business. Just as long as they treat their network marketing business as a business it will pay them like a business. Unfortunately, many people come into our industry with a get rich quick scheme mentality, so when they are challenged in building their business, the first thing they do is quit, because they have not got a clue how to succeed in network marketing.
Success in MLM is going to come about by dedication, by consistency, by having a good work ethic, and being there for other people, helping them to be successful. Success in network marketing is not going to come about by you manipulating people, trying to be a super salesperson, not being teachable, not having other people at your heart.
The Reality Of The MLM Industry
There is good and bad in every industry and in the past people have manipulated the structure of network marketing and there have been some Multi level marketing scams. These have been companies that tried to manipulate the structure with inferior products or services, but their main focus was paying people to recruit others and giving people commissions of sign fees. `however the good thing about regulation is, these types of companies very quickly get closed down, and that is why it is so important if you are going to get involved in network marketing or in any business opportunity for that matter, that you do your right research and due diligence.
Once you have found the right company, then it's important for you to focus and get rid of your excuses, because your excuses will kill your network marketing opportunity every time.
So in closing there is a very big difference between a pyramid scheme and network marketing and so the next time somebody tries to put them both in the same category, be empowered so that you do not get affected by that person's ignorance no matter how eloquent they put their case forward.
So to all of the Network Marketing haters, really, do you even know what a pyramid scheme is?
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