Multilevel Marketing – Scam or Legitimate Business?
That is a Network Marketing Scam!
You are thrilled about joining a new network marketing opportunity, when someone tells you, “That’s just one of those pyramids!” I like those folks. They know nothing about it, yet insist strongly upon raining on someone else’s parade. Meanwhile, they probably return to their 9-5, working for “the man”, check to paycheck. They usually fall into one of 2 categories: 1) they tried network marketing before and failed (their fault, not the industry), or 2) they are simply ignorant.
Now don’t misunderstand what I mean. I’m of the opinion that some of these people basically mean well. But they just do not know what they’re talking about, and it may make you avoid an amazing, life-changing business venture. So take care.
What Exactly Is A Pyramid Scheme?
When truly pinned down, most people only know the term, but don’t truly understand what it is.
A dictionary defines it as follows: “A pyramid scheme is a non-sustainable business design that involves promising participants payment, services or ideals, essentially for enrolling other people into the scheme or training them to take part, instead of supplying any real investment or sale of goods and services to the general public. Pyramid operations are a kind of fraud.”
So essentially, it’s like a fiscal game of musical chairs. Eventually the music stops and somebody is likely to lose out. Think Ponzi schemes, Bernie Madoff style.
These schemes are not legal, as they’re based mostly on a false expectancy and folks are victimized by a crime.
Network Marketing: A Legitimized Distribution Model
Many folks will look at MLM compensation plans, and notice that they take the kind of a “pyramid”, and confuse it with a scheme. But let us take a look at most any company in existence. At the very top, you have one person, the president. On the next level, 5 vice presidents. Level 3, 15 district bosses. Level 4, 412 branch chiefs. Level 5, 3000 front line workers. Appears like a pyramid, doesn’t it? For each item sold on the front lines, part of that revenue is shared among the workers, the managers, the executives and the owners. Got it?
Network marketing has similarities to most other companies in that case, however it is unique in its ability to encourage entrepreneurship, reward for success and share the wealth. In the standard company financial model, only a few people have the opportunity to earn substantial wealth, and the employees are generally without any true opportunity. By contrast, in multilevel marketing everyone has the same potential, and anybody can rise to the top.
It is completely legal, completely fair and among the most ethical sorts of business out there.
Actually I’d be more inclined to call most regular corporate jobs a scam, before I would a bonafide network marketing company.
And by the way, do you actually think Warren Buffet, Donald Trump and Robert Kiyosaki would risk their large wealth by owning and endorsing network marketing firms if they were illegal? Not a chance.
Network Marketing Swindles
There are less-than-legitimate companies that pop up in each industry, and ours is no exception. Avoid the “spend $5 and get rich fast by doing nothing” offers and the startup prelaunch hype. This could eliminate the majority of the bad apples. They aren’t always illegal operations, but they may simply be crappy opportunities.
Instead , do your prep. Pick a corporation that has a legitimized product and an established record. Don’t fall for contrivances and too good to be true promises. You may be massively rewarded in multilevel marketing, but only by working hard, learning and running a truthful business.
Karyn Weger is a top Network Marketing Coach both on and offline. Her special style combines old school strategies with up to the minute methodologies, to generate many hungry network marketers to her business, without disturbing friends and family, and without embarrassment or rejection. She teaches network marketers her sales techniques including how to deal with the pyramid scam and other objections, to explode their MLM businesses.
