Network Marketing and pyramid scheme-confusion: when opinions distort the facts
Network Marketing and pyramid scheme are two very different things, yet most people tend to mix them by solely relying on their friends’ and acquintances’ opinions instead of facts.
In this blog of mine you can learn about the facts, characteristics and differences of Network Marketing and pyramid scheme.
Rumours and words of mouth many times lack and distort facts
Stories transmitted by oral tradition have tremendous power. I can remember a specific incident when I took my friends opinion for granted, their opinion that lacked knowledge of the topic. Then this opinion of theirs I also often alleged as fact.
You can inadvertently cause massive damage and and making fools out of the masses of people with gossip lacking personal knowledge.
Differences between Network Marketing and pyramid scheme are still covered with a thick shroud of fog after so many years.
Time to flip this veil!
How can one decide if the business opportunity she would like to join is not an illegal Ponzi scam?
If someone decides on doing Multi-level Marketing activity itself, then he really is surely aware of the fact what the difference is between a Ponzi scam (other name of pyramid scheme) and a trustworthy Multi-level Marketing company operating legally.
One must be careful when she or he decides to join a firm. There are a lot of mountebank ” coming and going ” companies who disguise themselves in the cloak of legally operating MLM -like activity.
What are the characteristics of pyramid scams?
The main difference is written in brief below, because people often confuse MLM business with the rogue pyramid scheme:
- Pyramids can not work in the long run , because after X number of steps it simply runs out of potential people who can be involved . If there are no more contributors, the system crashes, and masses of the lower level who pay, are the losers !
- There is no product or service in a pyramid scheme. There are only contributors and their money shall be distributed to the users only.
- In pyramid scheme the one who is positioned at the top, or first enter, gets the most money.
What are the characteristics of legal MLM companies?
- In contrast to Ponzi schemes, well-functioning legal MLM companies have been operating for decades providing a stable livelihood called passive income for its distributors.
- There is a product (or service) and they are of really good quality. This is why such company can continuously sustain itself!
- If people have a good product experience , they will be returning customers. This gives the company stability.
- Those who join MLM business later can get ahead of the income levels of their colleagues who joined the business much earlier. If you are smarter, you sell more and earn more.
These are the main differences that I had to mention to make everything clean about the differences between Network Marketing and pyramid scheme.
What other points should one seek to find a well-established MLM company?
It must be a stable, financially strong company (most new companies do not survive the first 1-2 years )
- One can enter with a low-cost starter kit or just one product, like in DXN.
- A good customer service center must be available.
- It must have real, high quality products of daily use,
- One should not be required to purchase every month.
- It must have a fair marketing plan.
- It must provide you with a free. high quality training system.
- A reliable customer service is essential.
As you might recognized by now, I am in such a Network Marketing company that meets the above requirements. Passive income exists here for more than 25 years. Contact me, and I will help you achieve it too. 😉
This blog is the re-edited and re-published version of the one on my former website that does not work any more. The original blog was published on 9th February 2014 with the title: ‘Facts and opinions -Differences between MLM and pyramid scheme’