Network Marketing vs. "The Pyramid Scheme" -- It's Time to Debunk the Misinformation!
"It's all just one big pyramid scheme!" is one of the biggest and most frequent objections many people have when they hear about network marketing. Network marketing (a.k.a. mlm or "multi-level marketing") seems to be one of those things that people either love or hate.
Some people seem to "go off the deep end" by simply hearing the mention of the words network marketing simply because they can't get the idea out of their heads that network marketing = pyramid scheme.
Clinging to this "pyramid scheme view" of network marketing mainly shows that that person hasn't done his/her homework on the industry itself. There is really no need to have extreme views about network marketing. It's simply a business model that you can use if it's useful for you and your financial goals.
The Network Marketing Business Model – How It Works
Before you dismiss it, it's important that you understand the business model of network marketing. Here are some interesting facts about the industry:
1. Pyramid schemes are illegal almost everywhere.
2. Many multi-national corporations have used network marketing as part of their product distribution model. These include AT&T, Colgate, Gillette, General Electric, MCI, Toyota, Texas Instruments, Sprint, General Motors, Xerox, Citibank, MCI, and Coca Cola.
[Do you really think large multinational companies could operate year after year using an illegal pyramid scheme?]
3. A number of well-known business entrepreneurs, including Donald Trump, Robert Kiyosaki, Steven Covey, and Warren Buffett, have stated that network marketing is the best opportunity available today for ordinary people to gain financial freedom.
4. A network marketing company can diversify and find new markets, just like all companies have to.
5. Network marketing is an extremely cost efficient way for a company to move it's products to the consumer marketplace.
Think of any company that comes to mind. The company will likely have a CEO, a president, vice presidents, middle management, a sales force, and hourly employees.
It goes without saying that the person at the top, the CEO, is going to make the most money, and the compensations continue to decrease down the ladder which starts at his/her cushy leather chair.
The only way for someone to get paid more and move up the ladder is to boot someone else out of their spot - and this is what most people call okay and normal!
Employees must work to their limits, and then, they will often be laid off or fired before any of the benefits kick in. Of course there are always exceptions to this scenario. However, is this any less of a pyramid scheme than network marketing?
All people in the company work hard, but ONLY those at the very top have "permission" to make a lot of money.
In network marketing the game plan is for everyone involved to help people who are new reach the top. In fact, the whole business idea hinges on this idea! The only way to become really successful in the long term is to help others.
There will always be a mathematical limit to how large a network can become; however, in today's global marketplace, plus the power of the Internet, and a suitable compensation plan, there is plenty of room for everyone to grow their business as large as they want to.
Now yes, I admit, there ARE plenty of scams out there today; but network marketing is not a dirty word AND it is not a synonym for scam.
Click Here to learn about the movie Economic Power. It does a great job of explaining the network marketing business model.
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