In order to understand what network marketing is you also have to understand what it isn’t.Network marketing isn’t a pyramid scam. Pyramids are programs similar to chain letters where people just invest money based on the promise that other people will put in money that will filter back to them and somehow, they’ll get rich. A pyramid is strictly a money game and has no basis in real commerce. Normally, there’s 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. It’s based on providing people real, legitimate products they need and want at a fair price. While some people do make a lot of money through network marketing, their financial benefit is always the result of their own dedicated efforts in building an organization that moves real products and services.
A pyramid is illegal and is based on taking advantage of people. For a person to actually make money in a pyramid scheme, someone else has to lose money. But in network marketing, each person can multiply his or her efforts, skill and talents by helping others to 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 isn’t about taking advantage of your friends and relatives. 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 extending one’s network across the country.
Network marketing isn’t a get-rich-quick scam. Of course some people do make large amounts of money very quickly. Many would say they’re lucky. But success in networking isn’t based on luck. Unfortunately, money won’t sprout wings and fly into a new distributor’s bank account no matter what someone has promised them. Success in network marketing is based on following some very basic yet dynamic principles.
Now let’s discuss what network marketing is.
Network Marketing is a serious business for serious people. It’s a success formula. It’s a proven system where the design, creation and expense the corporate team has gone through becomes a road map for the distributors own success. They just need to follow the simple, proven and duplicable system that a good company provides.
Network marketing is leverage. The reason is that independent distributors can leverage their time and increase the number of hours of work effort on which they can be paid by sponsoring other people and earning 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 very basic concept is the cornerstone of network marketing.
For example, most successful people building a network marketing business do so in an organized method. They work a few dedicated hours each week with each hour of effort serving as a building block for their long-term business growth. Then they sponsor other people and teach those people how to sell the company product and sponsor others who duplicate the process.
By helping the people personally sponsored to sponsor others, your distributors duplicate themselves. As this process continues, they create geometric growth that can lead to hundreds or even thousands of people coming into their (and your) business. They leverage their time by helping others to be successful and earn an income from all their combined efforts.
Network marketing is a low overhead, home based business that can actually offer many of the tax advantages associated with owning your own business. And with network marketing your distributors have limited capital requirements, fewer geographical limitations, no or low minimum quotas required and no special education or skills needed.
Network marketing is a people-to-people business that can significantly expand the distributor’s circle of friends. It’s a business that enables them to travel and have fun as well as enjoy the lifestyle that extra income can provide.
Every type of marketing has it critics. Network Marketing is no exception. Educating your downline distributors and customers on the benefits and rewards of being involved in this great industry should be at the top of your list of your regular communication content.
Network marketing is a legitimate business. It’s based on providing people real, legitimate products they need and want at a fair price. While some people do make a lot of money through network marketing, their financial benefit is always the result of their own dedicated efforts in building an organization that moves real products and services.
A pyramid is illegal and is based on taking advantage of people. For a person to actually make money in a pyramid scheme, someone else has to lose money. But in network marketing, each person can multiply his or her efforts, skill and talents by helping others to 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 isn’t about taking advantage of your friends and relatives. 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 extending one’s network across the country.
Network marketing isn’t a get-rich-quick scam. Of course some people do make large amounts of money very quickly. Many would say they’re lucky. But success in networking isn’t based on luck. Unfortunately, money won’t sprout wings and fly into a new distributor’s bank account no matter what someone has promised them. Success in network marketing is based on following some very basic yet dynamic principles.
Now let’s discuss what network marketing is.
Network Marketing is a serious business for serious people. It’s a success formula. It’s a proven system where the design, creation and expense the corporate team has gone through becomes a road map for the distributors own success. They just need to follow the simple, proven and duplicable system that a good company provides.
Network marketing is leverage. The reason is that independent distributors can leverage their time and increase the number of hours of work effort on which they can be paid by sponsoring other people and earning 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 very basic concept is the cornerstone of network marketing.
For example, most successful people building a network marketing business do so in an organized method. They work a few dedicated hours each week with each hour of effort serving as a building block for their long-term business growth. Then they sponsor other people and teach those people how to sell the company product and sponsor others who duplicate the process.
By helping the people personally sponsored to sponsor others, your distributors duplicate themselves. As this process continues, they create geometric growth that can lead to hundreds or even thousands of people coming into their (and your) business. They leverage their time by helping others to be successful and earn an income from all their combined efforts.
Network marketing is a low overhead, home based business that can actually offer many of the tax advantages associated with owning your own business. And with network marketing your distributors have limited capital requirements, fewer geographical limitations, no or low minimum quotas required and no special education or skills needed.
Network marketing is a people-to-people business that can significantly expand the distributor’s circle of friends. It’s a business that enables them to travel and have fun as well as enjoy the lifestyle that extra income can provide.
Every type of marketing has it critics. Network Marketing is no exception. Educating your downline distributors and customers on the benefits and rewards of being involved in this great industry should be at the top of your list of your regular communication content.
Pyramid Structure: An Organizational Problem
The Un-Pyramid
For most MLMs, the product is really a mere diversion from the real profit-making dynamic. To anyone familiar with MLMs, the previous discussion (which focused so much on the fact that MLMs are "doomed by design" to reach market saturation and thus put the people who are legitimately trying to sell the product into a difficult situation) may seem to miss the point. The product or service may well be good, and it might oversaturate at some point, but let's get serious. The product is not the incentive to join an MLM. Otherwise people might have shown an interest in selling this particular product or service before in the real world. The product is the excuse to attempt to legitimate the real money-making engine. It's "the cover."Intuitively, we all know what is really going on with MLMs. Just don't use the word "pyramid"!
"You see, if you can convince ten people that everyone needs this product or service, even though they aren't buying similar products available in the market, and they can convince ten people, and so on, that's how you make the real money. And as long as you sell to a few people along the way, it is all legal." Maybe...
But the way to make money in all this is clearly not by only selling product, otherwise you might have shown an interest in it before, through conventional market opportunities. No, the "hook" is selling others on selling others on "the dream."
Math and Common Sense
MLMs work by geometric expansion, where you get ten to sponsor ten to sponsor ten, and so on. This is usually shown as an expanding matrix (just don't say "pyramid"!) with corresponding kick-backs at various levels.The problem here is one of common sense. At a mere three levels deep this would be 1,000 people. There goes the neighborhood! At six levels deep, that would be 1,000,000 people believing they can make money selling. But to whom? There goes the city! And the MLM is just getting its steam going. Think of all the meetings! Think of all the "dreams" being sold! Think of the false hopes being generated. Think of the money being lost.
It Will Fail??? It Cannot Fail???
Nothing irritates a die-hard MLMer more than the preceding argument. If you point out the absurdity, for example, that if "the pitch" at an Amway meeting were even moderately accurate, in something like 18 months Amway would be larger than the GNP of the entire United States, then listen closely for a major gear-shift: "Well, that is absurd, of course. Not everyone will succeed, and so the market will never saturate."Well, which is it? Are we recruiting "winners" to build a real business, or planning by design to profit off of "losers" who buy into our "confidence"?
During "the pitch," anyone can make it work. "It's the opportunity of a lifetime." "Just look at the math!" But mention the inevitable saturation and the losses this is going to cause for everyone, and then you'll hear, "Of course it would never really work like that." "Most will fail," you will be told, "but not you, Mr. Recruit. You are a winner. I can just see it in your eyes."
If you are a starry-eyed recruit, it will grow as presented. If you are a logical skeptic, then of course it would never really work like that.
But the dialog usually never even gets to this. The fact that MLM is in a mad dash to oversupply is largely chided as mere "stinkin' thinkin'." Expert MLMers know how to quickly deflect this issue with parable, joke, personal testimony, or some other sleight of mind.
New Solution: A Retarded MLM
Some modern incarnations of MLMs attempt to address this particular problem by limiting the number of people you can sponsor, say, to four. But the same geometric expansion problems exist; the failure mechanism has just been slowed down a bit. And now there is the added problem of even more unnecessary layers in the organization.The claim that an MLM is merely a "common man" implementation of a normal real-world distribution channel becomes even more absurd in this case. Imagine buying a product or service in the real world and having to pay overrides and royalties to five or ten unneeded and uninvolved "distributor" layers. Would this be efficient? What value do these layers of "distributors" provide to the consumer? Is this rational? Would such a company exist long in a competitive environment?
Confidence Men and the Shadow Pyramid
The age-old technique of "con men" is to create "confidence" in some otherwise dumb idea by diversion of thought, bait, or force of personality. The victim gets confidence in a bogus plan, and, in exchange, the con man gets your money. MLMers are very high on confidence.Since the brain inevitably intrudes itself into the delusion that an MLM could ever work, spirits drop and attitudes go sour. But this depressive state can itself be exploited. As doubts grow when the MLM does not do what recruits were first "con"fidenced to expect, then a further profit can be made keeping the confidence going against all common sense.
Thus, a parallel or "shadow" pyramid of motivational tapes, seminars, and videos emerges. These are a "must for success," and recruits are strong-armed into attending, buying, buying, and buying all the more. This motivational "shadow pyramid" further exploits the flagging recruits as they spiral inexorably into oversaturation and failure. The more they fail, the more "help" they need from those who are "successful" above them.
So, MLMs profit by conning recruits up-front with a "distributorship fee," and then make further illicit money by "confidencing" these hapless victims as they fail via the "sale" of collateral material.
Special MLM "Job" Offer: A Losing Proposition
Would a rational person, abreast of the facts, go to work selling any product or service if he or she knew that there was an open agenda to overhire sales reps for the same products in the prospective territory?What do you think? Is this a good "opportunity" or a recipe for collective disaster?
So, as the saying goes, "Get in early!" This is a rationalization on the level of "getting in early" on the L.A. looting riots. If profit from the sale of products is fundamentally set up to fail, then the only money to be had is to "loot" others by conning them while you have the chance. Don't miss the "opportunity," indeed!
Where is the money coming from for those at the top? From the sucker at the bottom... as in every pyramid scheme. The product could be, and lately has been, anything.
The important thing is to exploit people while the exploiting is good, if you want to make quick money at MLM.
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