Network Marketing Vs. Pyramid Scheme
Network marketing vs. pyramid scheme: is there any difference? You may have heard that there is no difference, but nothing could be farther from the truth. To tag the word "illegal" onto the phrase makes it more ludicrous still.
Have you ever heard of Amway, Mary Kaye, or Pampered Chef? How about NuSkin or Avon? All of those big companies are network, or multi-level, marketing companies. Obviously, if they were illegal, they would not be around.
What about a pyramid scheme? If you have ever had someone show you how MLM works, it certainly looks like a pyramid, with you at the top and an ever-increasing downline forming a pyramid shape below you.
We need to look at that in two different ways. First of all, in the arena of direct sales, a "pyramid scheme" is a set-up where people pay a monthly fee and get no services or products in return. That is indeed illegal, and typically no one makes any real money except the few people at the top.
The second angel to examine is the structure of your typical corporation. The CEO gets a huge salary, much larger than anyone else in the company. He sits on the top of the pyramid. Below him are any number of employees at various levels, with each progressively lower level containing more employees. The farther down the level, the lower the salary or hourly wage.
At some point in this corporation, you hit rock bottom. Here are the greatest number of employees, and they can do little to raise their salaries or wages. And they have no one underneath them, and little hope of moving up in the pyramid.
The fact is, in a corporation, the lower down the pyramid you are, the less you get paid, the fewer benefits you have, and the greater risk you have of losing your job. You can only hope that after thirty or forty years of service, you will have piled up a big enough nest egg to leave the corporation with some financial dignity.
With network marketing, none of that is true. Anyone who joins the organization who puts in enough time and the right effort can eventually develop a residual income that surpasses four figures per month€¦and it won't take you several decades to do this. Not only that, but also the person who signs up at the bottom of your downline has just as good a chance to grow such an income - there really is no "bottom" in network marketing, so it ends up not being a true pyramid!
So why do some people accuse MLMs of being "pyramid schemes? Usually it's because they either failed in MLM and got bitter, or have had so many friends try to pressure them to join one that they have been totally turned off by it.
But more and more network marketers are realizing much greater success than previous generations in the industry. More and more network marketers are realizing that bugging friends and family usually gets you nowhere, and so they put attraction marketing into play using the power of the Internet.
If you are interested in developing a residual income, you can do it without ever having to try to twist anyone's arm or buy leads - people wanting the products and business opportunity come to YOU!
Have you ever heard of Amway, Mary Kaye, or Pampered Chef? How about NuSkin or Avon? All of those big companies are network, or multi-level, marketing companies. Obviously, if they were illegal, they would not be around.
What about a pyramid scheme? If you have ever had someone show you how MLM works, it certainly looks like a pyramid, with you at the top and an ever-increasing downline forming a pyramid shape below you.
We need to look at that in two different ways. First of all, in the arena of direct sales, a "pyramid scheme" is a set-up where people pay a monthly fee and get no services or products in return. That is indeed illegal, and typically no one makes any real money except the few people at the top.
The second angel to examine is the structure of your typical corporation. The CEO gets a huge salary, much larger than anyone else in the company. He sits on the top of the pyramid. Below him are any number of employees at various levels, with each progressively lower level containing more employees. The farther down the level, the lower the salary or hourly wage.
At some point in this corporation, you hit rock bottom. Here are the greatest number of employees, and they can do little to raise their salaries or wages. And they have no one underneath them, and little hope of moving up in the pyramid.
The fact is, in a corporation, the lower down the pyramid you are, the less you get paid, the fewer benefits you have, and the greater risk you have of losing your job. You can only hope that after thirty or forty years of service, you will have piled up a big enough nest egg to leave the corporation with some financial dignity.
With network marketing, none of that is true. Anyone who joins the organization who puts in enough time and the right effort can eventually develop a residual income that surpasses four figures per month€¦and it won't take you several decades to do this. Not only that, but also the person who signs up at the bottom of your downline has just as good a chance to grow such an income - there really is no "bottom" in network marketing, so it ends up not being a true pyramid!
So why do some people accuse MLMs of being "pyramid schemes? Usually it's because they either failed in MLM and got bitter, or have had so many friends try to pressure them to join one that they have been totally turned off by it.
But more and more network marketers are realizing much greater success than previous generations in the industry. More and more network marketers are realizing that bugging friends and family usually gets you nowhere, and so they put attraction marketing into play using the power of the Internet.
If you are interested in developing a residual income, you can do it without ever having to try to twist anyone's arm or buy leads - people wanting the products and business opportunity come to YOU!
