Network Marketing – Pyramid Scam or Credible Business?
That’s a Network Marketing Pyramid Scam!
You’re thrilled about affiliating with a new network marketing opportunity, until someone says to you, “That’s merely one of those MLM pyramid scams!” We’ve gotta love those folks. They get nothing about it, but insist on raining on anybody else’s parade. Afterwards, they in all likelihood go back to their 9-5, working for “the man”, month after month. They ordinarily fall into one of two categories: 1) they tried network marketing previously and were unsuccessful (their doing, not the industry), or 2) they’re simply ignorant.
Now don’t get me wrong. I acknowledge that most of these people in actuality mean well. However they just don’t know what they’re talking about, and it may cause you to pass on a terrific, life-changing income opportunity. So be careful.
What Exactly Is A Pyramid Scam?
When really pinned down, most people only are aware of the term, but don’t fully understand what it is.
Wikipedia defines it as follows: “A pyramid scheme is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud.”
So basically, it’s just a financial game of musical chairs. Ultimately the music stops and someone is going to lose out. Think Ponzi schemes, Bernie Madoff style.
Pyramid Scams are illegitimate, as they are based on a misleading expectation and people are hurt by a fraud.
Network Marketing – A Legitimate Distribution Model
Many people will look at MLM compensation plans, and see that they take the form of a “pyramid”, and assume it’s a pyramid marketing scheme. But let’s take a look at just about any company in existence. At the high point, you have one person, the CEO, perhaps. On the second level, 5 VP’s. Level 3, 15 regional managers. Level 4, 412 store managers. Level 5, 3000 front line employees. Looks exactly like a pyramid, right? For every item sold on the front line, some of that cash flow is split between the workers, the managers, the executives and the owners. Understand?
Network marketing is just like many other businesses in this regard, but it is different in its opportunity to favor entrepreneurship, reward for accomplishment and spread the prosperity. In the typical corporate business model, merely a handful of people have the chance to earn any wealth, and the workers are usually without any true opportunity. By comparison, in MLM everyone has the same capability, and anybody can rise to the top.
It is totally legal, perfectly fair and among the most ethical structures of business available.
Truthfully, I’d be more inclined to label most typical corporate jobs a pyramid scam, before I would a genuine network marketing business.
And by the way, do you honestly think Warren Buffet, Donald Trump and Robert Kiyosaki would jeapordize their enormous wealth by buying and operating MLM organizations if they were unlawful pyramid marketing schemes? Not ever.
Network Marketing Scams
There are less-than-legitimate organizations that pop up in all industries, and network marketing is no exception. Skip the “spend $5 and get rich quick by doing nothing” advertisements and the age old pre-launch hype. This will weed out nearly all of the fly by night companies. They aren’t necessarily real network marketing pyramid or MLM pyramid schemes, however they may merely be terrible opportunities.
Alternatively, do your investigating. Choose a company which offers a genuine product and an established track record. Do not fall for gimmicks and too good to be true claims. You can be exceedingly rewarded in MLM, but only by working hard, learning and operating a legitimate business.
Karyn Weger is a top Network Marketing Coach both on- and offline. Her unique style combines old school methods with state-of-the-art online marketing techniques to teach this powerful combination to struggling network marketers who want to explode their MLM businesses. If you want to know how Karyn’s amazing system generates dozens of hungry network marketers to her business, without bothering family and friends, and without embarrassment or rejection, visit Karyn’s MLM Success Factors now.
(c) Copyright 2011- Karyn Weger. All Rights Reserved Worldwide.
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