One of the most common objections to Network Marketing companies is the pyramid argument. Many people will argue that Network Marketing companies are ‘pyramid schemes’ but that is not usually the case.
If it were, they will be closed down fairly quickly.
There is a big difference between ‘pyramid structure’ and ‘pyramid scheme’. Almost every business has a pyramid structure.
If you look at a typical corporate organization chart, you will see one person at the top, a few underneath that person, and then it fans out into… a pyramid.
Even if you look at a sales organization, you’ll see that senior sales people get commission overrides from the people underneath them. That sounds like a downline structure in Network Marketing.
A Pyramid Scheme on the other hand is Illegal.
The business emphasis on many MLMs is so heavily placed on the opportunity that the product seems unimportant.
Or it’s difficult to buy the product without hearing about the opportunity.
Legitimate Network Marketing companies will focus on significant product movement along with selling the opportunity.
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That’s a balancing act, and those that cross that line to ‘scheme’ will likely have the FTC to deal with.
Since many home based business opportunities are network marketing companies, you may need to look closely at this when you evaluate an opportunity.
On the other Hand...
A legitimate Network Marketing or MLM opportunity is one of the best ways to start your own business and create an extra income into your life.
Here are a few of the benefits of having your own MLM business....
- Get started for usually less than a thousand dollars!
- No employees required. (You are an Independent Contractor)
- Very LOW overhead. (No workman's comp, social security, or Payroll since you have no employees)
- Create Leverage by building a team of Independent Contractors (Get paid to help others succeed)
- Build a Residual Income (Get paid over and over for work you did once)
- Do business from anywhere (Your business goes where you go)
- Meet a lot of new people and build some awesome relationships.
The Biggest Challenges...
- You must prospect and recruit people to become successful!
- You must treat it like a business, not a hobby or a couple hundred dollar business.
- There is work required, it's not a get rich quick deal.
- You gotta stick and stay to get your pay.
- You will have to deal with the Haters and the Naysayers.
So is it worth it?
That depends on you what your Goals and Dreams are in life. If you don't like the responsibility of being in control of your own income, you are probably better off letting someone else do that.
But if you are willing to work hard and tie into systems that are proven to work, and be teachable and coachable, you will definitely have a very strong chance of achieving your life Dreams and Goals within a few short years.
But why do so many people NOT Succeed?
Well that definitely varies from one person to the next. But you must understand that business is business. MLM is real business.
The learning curve to learn the skills needed to be successful in MLM is probably about the same as any other type of business. Whatever industry you are in, some type of skills are required.
Also some people come into the MLM industry with unrealistic expectations. They think they can join a company and money is just going to magically show up in their mailbox. That is never the case.
Having realistic expectations and setting goals that you'd like to achieve are a great start to any Entrepreneur's journey.
Pick a Mentor that has what you want!
One of the cool parts about MLM is that people with more success than you really want to see you succeed. They have an invested interest in helping you become successful.
Unlike most traditional businesses you don't want to share your best secrets with their competition.
So the best advice I can give someone new just starting out is to pick one or 2 people that have what you want and are willing to help you and teach you along the way.
Preferably that would be your "upline" leader or someone that benefits from your results, but if you don't know them or for some reason can't connect with them, there are many great Coaches and Trainers out there.
A few I'd highly recommend are, Ray and Jessica Higdon, Kate McShea, and Tim Erway.
Please feel free to share this article and help spread the word that MLM has a Pyramid Structure, and is usually not a Pyramid Scheme!