Somebody trying to get you into one of those network marketing pyramid scheme deals? Do you know the difference between the two? Most people don’t.
It really makes sense to learn the difference. To help you understand what network marketing is, we should probably start with what it isn’t.
First, network marketing is not at all like any pyramid scheme. Pyramid shcemes are scams similar to chain letters where people just “invest” money based on the promise that other people will put in money that will magically filtrate back to them and somehow, they will get rich. A pyramid scheme is strictly a money game and has no basis in real business. Normally, there is no product involved at all, just money changing hands. Modern-day pyramids may have a product, but it’s clearly there just to disguise the money game.
Network marketing is a legitimate business. This business model has been around for many years and is being used by many businesses, large and small.
Real network marketing is based on providing people with real, legitimate products or services they actually need and want at a fair price.
Some people do actually make a lot of money through network marketing. But it important to recognize that their financial benefit is always the result of their own dedicated efforts (actual work) in building an organization that sells real products and services to real customers.
Pyramid schemes are illegal. They are based on taking advantage of people. For a person to actually make money in a pyramid scheme, someone else has to lose money. Let that sink in.
If the only way for you to win is for someone else to lose,
you are probably looking at a pyramid scheme.
In network marketing, when someone buys your product or service, they should be receiving REAL value. As for income, each person can multiply his or her efforts, skills and talents by helping others be successful.
Network marketing has proven itself as part of the new economy and a preferred way to do business here and around the world.
Network marketing is actually a serious business for serious people. Success in network marketing is all about leverage. You can leverage your time and increase the number of hours of work effort on which you can be paid by building a team of other people interested in working together.
You can earn a small income on their efforts. J. Paul Getty, who created one of the world’s greatest fortunes, said “I would rather make 1 percent on the efforts of 100 people than 100 percent on my own efforts.” This simple concept is the cornerstone of many network marketing success stories.
By helping the people you personally sponsor to learn the system and follow your example, you can begin to duplicate yourself. As this process continues, you can create compound growth that can lead to hundreds or even thousands of people coming into your business.
You leverage your time by helping others be successful and earn an income from all their efforts.
There are many reasons to love network marketing. With network marketing, there are no major capital requirements, no or few geographical limitations, no minimum quotas required and no special education or skills needed.
Network marketing is a low-overhead, homebased business that can actually offer many of the tax advantages associated with owning your own business.
Network marketing is a people-to-people business that can significantly expand your circle of friends. It’s a business that enables you to travel and have fun as well as enjoy the lifestyle that extra income can provide.
Hopefully, you now have a better idea of what to look for when you get approached with the next “network marketing pyramid scheme” your friends are talking about.
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The federal government pension plans are classic ponzi schemes. A matrix pay plan is a great leveraging platform.
Well said, Louis!
I myself have fallen victim to these schemes! I had to learn the hard way over the years. Great article thanks for enlightening us Brian.
Sometimes, we learn the hard way, for sure! I’ve had a few of those lessons, myself over the years.
Many treat a legitimate business like a money scheme. They don’t use the product, they don’t care about the product and they wouldn’t use the product if they were not just working it to get money. This article does a great job of showing the difference between something legit and something not. Now people need to understand they need to understand that being in a legit business is just the start. Use the product, love the product, be willing to pay for the product even if you never share it with others, commit to using it long term and THEN share your story of love for the product with others and teach them to do the same. This approach helps the company, the industry reputation, you the user, those who you share it with and all of this CAN have the added benefit of providing you an incredible, reliable monthly income from home that is sustainable and reliable. A good example is using the product know as TrafficWave, which is an email marketing platform. You can use TrafficWave to build your email list and keep in contact with your prospects on automatic with follow-up messages and broadcast email messages. They offer a few other nice tools as well. I use the service for 17.95/mo and I’d use it even if they didn’t have an affiliate plan in place. Fortunately they do though so when I rave about the product to my friends they are happy to join and TrafficWave is happy to share the money with me and they are very generous with how much they pay me for referring others. I even use a cool system they set up for me where I can pay for someone to join in their first month. I’m happy to do this because they pay me 100% commission when someone joins, so essentially I’m not losing a penny. If the person stays and continues to use the product in month 2, TrafficWave shares the money with me. VERY COOL! This is how you do it right! It’s especially nice for people I refer TrafficWave to because I actually help them get started. People appreciate this. I log into their account and help them create their first capture page with 10 follow-up messages. This helps people get the list building process started. I created a training blog and Facebook group too to help. I also made a cool free marketing platform for those who want to share TrafficWave with others like i do. I really enjoy the affiliate program TrafficWave has put in place because they reward me for being helpful to others and I think that’s how it should be.
Ben and Louis are on point and like Robert, i too have fallen for such schemes in the past. Doesn’t mean I never will again but I now do as much as I possibly can to assure myself and other networkers as well as those not at all interested in network marketing ( it IS much harder than some would have you believe ) that a ‘program’ is legit or not, IMHO.
That being said, i feel that one must be a “people person” and enjoy speaking/socializing with strangers if they truly wish to succeed in network marketing. Learning the social skills needed for network marketing CAN be acquired fairly easily if you’re seriously motivated and willing to “step out of the box” but for those shy folks or those lacking in self-confidence, learning/doing such skills and networking with others, can be a daunting experience, though very rewarding when those fears are finally conquered.
all in all, I could never return to the 9-5 daily way of life, working a J.O.B. ( Just Over Broke ) since I was introduced to network marketing and have found mentors like Brian, who truly provide help and products one MUST HAVE if one is to succeed in network marketing, especially online.