The truth about Network Marketing – it's time to set the record straight. I was browsing around the internet the other day when I came across a few articles informing the public of the supposed scam that is Network Marketing. The articles go on to explain how all multi-level opportunities are in fact pyramid schemes or Ponzi schemes.
Wikipedia describes a Ponzi scheme as: "a fraudulent investment operation that involves promising or paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business. It is named after Charles Ponzi." Yes, some overly excited networkers do get caught up with the idea to make large sums of money with the company they happen to be representing and yes they may talk about making fortunes very, very quickly, but this does NOT necessarily make their opportunity a Ponzi scheme.
Network Marketing opportunities always seem to be dismissed as pyramids and that only the few people at the top can make all the money, but isn't every corporate structure a pyramid? Tell me if this structure looks familiar:
Employees / Workers / Staff
Does the above not look like a pyramid to you? Who do you think earns the most amount of money in this organisation? One of the workers? The middle management? Obviously it's the CEO that earns the most money and the workers at the bottom earn the least. Do you think an average worker can rise through the ranks to one day be CEO and if so, how long do you think it would take this person?
Network Marketing is also known as 'referral marketing' or 'relationship marketing' because that's exactly what it is. Have you ever recommended a good movie or book or restaurant to a family member or friend? Were you paid for that recommendation? Network Marketing is like referring a friend to a movie except you get paid a commission for doing so.
The truth about Network Marketing is that it is simply a marketing module that allows companies to get products to market quickly and cheaply. Traditionally a company would have to spend money on advertising, call centres and sales reps before a single product was sold. Companies would spend tens, if not hundreds of thousands of dollars upfront on advertising before it had any money coming in from sales. Large companies recognise Network Marketing as an alternative way to get their product to market. They have people recommend their product or service for them, and only when a purchase has been made do they have to pay what they would have spent on advertising and they pay it to you, the representative.
Network Marketing is by far the fairest business model I have ever encountered as it gives everyone the opportunity to take advantage of true leverage. True leverage can only exist if everyone has the same amount to gain, but I can hear you saying that only the people at the top can earn all the money! This is not necessarily true; in all the compensation plans that I have seen it is not the person at the top that makes all the money, it is the most productive people that make the money. It is possible to join a company that has been running for five, ten, even fifteen years and become the highest paid in the company. Equally you can be the second or third person to join a company and still not earn a cent. What you earn in this industry has very little to do with when you join, it is all about how much effort you put in to build your own business.
The truth about network marketing is that it gives everyone the same opportunity regardless of colour, gender, qualifications or age. Yes by building a team of people in your business your organisation takes on the infamous "Pyramid" shape but in Network Marketing you have the opportunity to be at the top of your pyramid rather than staying at the bottom of someone else's.