By Tim Sales
Go online and research MLM or network marketing. Apart from the overviews of the top legitimate and highly successful MLM companies, you will invariably find a whole bunch of articles or website reviews that share one of three conflicting opinions. Actually they are not opinions - they are more like marketing tactics employed to take you in one direction or another. This is when you are subjected to evocative terms such as "scams" and "pyramid schemes."
You'll either find a certain MLM company being over-hyped by a network marketer in an attempt to get product sales or to attract new distributors; or disparaging comments being made about a certain network marketing company with the intention of encouraging you to look at a "much better alternative;" or comments being made by disgruntled network marketers who haven't been successful, claiming that the network marketing industry is one big scam or their particular company employs a pyramid scheme.
None of these do the network marketing industry any favors. On top of that, if you were to stop almost anyone in the street, they would tell you that they know exactly what network marketing is - and you can bet your last dollar that if you mentioned the words "scam" or "pyramid scheme," MLM or network marketing will be blamed.
It's time to get the facts straight and explain why multi-level marketing is not a pyramid scheme.
A pyramid scheme is an illegal operation that involves the exchange of money, primarily for enrolling other people into the scheme, usually without any product or service being actually delivered to the end consumer. Sometimes a product may be featured, but it's only there to drive the pyramid scheme.
In their defense, the confusion may arise because this typically use MLM to deploy their schemes, so how a pyramid scheme actually gets out into the marketplace is through the use of MLM. All the marketing and advertising will depict it as an MLM company, but really it's a pyramid scheme, and fundamentally that's the reason that the network marketing industry is associated with them.
Now, this does not mean that MLM is a pyramid. It means that the scammer who tricks people to pay to join their pyramid scheme will use MLM to deploy their scam -this is actually the way that it works.
The main characteristic that you need to keep in mind about a pyramid scheme is that a person is earning money based upon recruiting people into the scheme, rather than by selling a real product or service. More importantly, the last thing in the minds of those who operate pyramid schemes is a desire to help others achieve their lifestyle goals - which, without doubt, is the cornerstone of network marketing and the key to building a successful MLM business.
MLM is a legal business whereby an independent contractor or distributor or representative or associate, whatever your company calls it, of a parent company is compensated based on their sales of products or services, as well as the sales achieved by those they bring into the business. In a legitimate MLM company, commissions are earned only on the sale of the company's products or services. How MLM differs from a pyramid scheme is that there is a legitimate product being sold to the end consumer, and there is no money paid for recruiting distributors alone.
If you are reviewing companies which claim to be involved in network marketing and they claim that if you bring somebody into the business you'll receive a commission, check - because you may be looking at a business that is a pyramid scheme. Avoid them.
If you bring somebody into the business, and they want to buy real products to try, then that is a legitimate or a legal MLM company.
Download a sample set of FREE MLM prospecting scripts along with my How-To Report that will help you be a more confident recruiter and build your downline faster by visiting my website http://www.FirstClassMLMTools.com. Tim Sales built an MLM business with an income of over $150,000 per month with 2,400+ new distributors joining per month. He now creates MLM training tools for everyone in network marketing.
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