Network Marketing or Multi-Level Marketing has been misconstrued by many as pyramid selling which is illegal.
The main problem of the vast majority looking in from the outside is misinformation especially from family and friends, the vast majority of whom don’t bother to do their due diligence to research this industry and get the facts right; strangely these are the same reasons the vast majority struggle to survive in this industry and only the top 5% become fabulously wealthy, when in reality, you have the same opportunity as everyone else to succeed as a network marketer. See my other article titled “It’s All About You…or is it?”
So what are the signs to watch out for when considering a network marketing opportunity?
In addition to the definitions below, check out general government guidelines in your country of abode to make sure you’re not been sucked into a pyramid scheme…sorry scam.
Network Marketing VS. Pyramid Selling
The terms "network marketing" and “direct selling” are frequently used and often misinterpreted by many people. The most common misconception is the comparison of network marketing to illegal sales methods such as “pyramid selling”.
Network Marketing
Network marketing (also referred to as multi-level marketing) is a sales model where products and services are marketed to end consumers through a network of independent direct sellers. These independent direct sellers receive compensation from their own sales of products or services to customers, and from the sales to customers generated by their network of other independent direct sellers, but always based on the sale of products and/or services to consumers rather than simply expanding the network of independent direct sellers.
Pyramid Selling
A pyramid selling scheme is any business where the primary form of compensation is derived from the fees that others pay to join the business, rather than from the sale of products or services to end consumers. These schemes are illegal and alongside “pyramid selling” these schemes have also been described as ‘chain letters’, ‘snow ball schemes’, ‘chain selling’, ‘money games’ and ‘investment lotteries’.
It is important to remember that legitimate network marketing rewards independent direct sellers for the distribution and sale of products and/or services to customers. No money is earned merely by sponsoring additional independent direct sellers into the distributorship.
Thus, network marketing offers independent direct sellers the opportunity to build independent businesses marketing, promoting and selling products and/or services to customers and to train an organisation, or network, of other independent direct sellers to do the same.
In addition to these, ask yourself questions like:
1. 1. How long has the company been in existence?
2. 2. Has the company been endorsed by a well-respected prominent person?
3. 3. How do their leaders and representatives conduct themselves?
4. 4. Are they members of the Direct Selling Association?
5. 5. Do they have good, legitimate products?
If you follow these simple guidelines, then it’s very unlikely you’ll be scammed.
If you pay your license fee and do nothing, then you’ve scammed yourself; don’t go bad-mouthing the industry. It’s not a get rich quick scheme. Like everything else in life, success in this industry requires hard work and dedication.
For more information on pyramid schemes, legitimate network marketing code of conduct, there’s a lot of information on the World Federation of Direct Selling Association website.
There’s more information on pyramid schemes and what to watch out for on the webpage link below - http://www.wfdsa.org/search/SiteResults.cfm?collection=WFDSA_search&fld_search=Document+Titles&criteria=Pyramid+Schemes
The Direct Selling Association is a government regulatory body. They are not affiliated in any way to any direct selling, multi-level or network marketing company so they have your best interests at heart.
If the company you’re considering joining is not listed here, then they’ve got something to hide.
If you want to learn how you can succeed in your multi-level marketing business, then check out http://www.YesUCan.biz. It’s the best training available for network marketers today and is all yours now to test-drive for only $1 for 14 days. It is fully customizable with a growing list of excellent affiliate programs where you can potentially earn $1000s weekly while growing your mlm biz; you can have the best of both world’s!
I sincerely hope it goes well for you. It’s the best financial decision I’ve made in my entire life!
