Network Marketing Or Pyramid Scheme?

network marketing pyramid schemeQuestion: Some of my friends keep trying to recruit me into one of those network marketing pyramid scheme deals. When I look at these things, some of them look pretty good. Other friends tell me they are illegal and I could get into trouble. Who is right on this one?

Answer: To help you understand what network marketing is, let’s first talk about what it isn’t. Real network marketing is not a pyramid scheme. Pyramids are programs similar to chain letters where people just throw in money based on the promise that other people will also throw in money and that money will somehow filtrate back to them. The promise is that they will get rich. Don’t get confused. A pyramid scheme is nothing more than a money game and has no basis in real business. Typically, there is no actual product involved at all, just money changing hands.

Network marketing, on the other hand, is a legitimate business model. It is based on providing people with real, legitimate products or services they need and want at a fair market price. Some people do make a lot of money through network marketing. What you must understand is their financial benefit is always the result of their own dedicated efforts in building an organization that sells real products and services.

Pyramid schemes are illegal and are based on taking advantage of people. For a person to actually make money in a pyramid scheme, someone else has to lose money. We call this a zero sum game. In network marketing, you have real customers who purchase and use the products with our without the opportunity attached. For those who want to participate in the income side, they can multiply their 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 all around the world and in a variety of industries.

Network marketing is not about taking advantage of your friends and family. Only a few years ago, network marketing meant retailing to, and sponsoring people from, your “warm list” of prospects. Although sharing the products or services and the opportunity with people you know is still the basic foundation of the business, today we see more people using sophisticated marketing techniques such as the Internet, conference calling and other long-distance sponsoring techniques to extend their network around the world.

There really is no such thing as an actual network marketing pyramid scheme. They are not the same.

Network marketing is not a get-rich-quick scheme. There are people who do make large amounts of money very quickly. Many say those people are lucky. But make no mistake about it: Success in networking is not based on luck. Success in network marketing is based on following some very basic and powerful principles.

Network marketing is a serious business for serious people. It’s a proven system where the design, creation and expense the corporate team has gone through becomes a road map for your success. Good companies will provide a solid reliable system that you will want to follow.

The key to success in network marketing is all about leverage. You can leverage your time by building a team of like minded business people you will work with. J. Paul Getty, who created one of the world’s greatest fortunes, is reported to have said “I would rather make 1 percent on the efforts of 100 people than 100 percent on my own efforts.” This  concept is the very cornerstone of successful network marketing.

 

With network marketing, there are no major capital requirements, 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 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 is a business that enables you to travel and have fun as well as enjoy the lifestyle that extra income can provide.

We highly recommend you look in to network marketing and definitely avoid any sort of pyramid scheme.

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