Why network marketing is not a pyramid scheme


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    If you’re one of those people who passed up on a network marketing opportunity believing it’s a
    scam, I don’t blame you. So many people are greatly misinformed about this marketing strategy,
    thinking it to be one and the same as a pyramid scheme or a Ponzi scheme. Well, I’m here to set
    things straight and help you understand the many reasons why network marketing is unlike a
    pyramid scheme.

    Network Marketing (NM) vs. Pyramid Scheme (PS)

    NM is a legit marketing strategy.
    Before I explain what network marketing is, I need to emphasize what it isn’t. Network
    marketing is nothing close to a pyramid scheme. Network marketing is a legitimate marketing
    strategy, whereas a pyramid scheme is a fraudulent undertaking. In a pyramid scheme, people are
    asked to invest based on a promise that hasn’t materialized yet. Akin to its name, a pyramid
    scheme banks merely on this promise attracting as much investment as possible, and profits
    trickling down somehow to other people.

    NM is real commerce.

    Pyramid schemes are grounded on money alone and have no concrete product or service being
    offered. By its nature, pyramids don’t resemble any real commercial activity. This makes it illicit
    and illegal.
    On the other hand, network marketing is based on real, concrete items and services which are
    shown to clients anywhere, anytime. While pyramids have also evolved to include products, but
    it is essentially just a cover-up for the true motive – which is to extort money.
    Network marketing involves a publicly-registered business, operating in an office where people
    come and go. It is a business with the primary aim of providing quality, real products for
    customers at a fair price. Therefore, it is completely legitimate and legal.
    NM offers opportunities for success through compensation plans.
    Network marketing rewards participants with generous multi-level commissions based on their
    sales. In fact, success stories are based on the dedication and efforts of the dealers and staff of the

    On the other hand, Pyramids are illicit and based on the number of sign-ups you can generate.
    Also, pyramids operate on unfair terms so that anyone who invests is in a win-lose situation. For
    you to make money out of a pyramid, someone else needs to lose theirs. It’s both cruel and
    Network marketing is nothing like that. Instead of a cutthroat culture, you help each other out to
    be successful. There is a sense of community and collective success. You each try to learn the

    ropes of the business and pass this on to others. Everyone earns and become successful. But of
    course, your earnings are still commensurate to the efforts and time you invest.
    NM requires perseverance and marketing chops.
    Network marketing isn’t a get-rich-quick scheme. It will take perseverance and serious
    marketing chops to succeed. What makes network marketing leagues different from pyramids is
    that you don’t trick your connections. You genuinely engage with them offline or online. At first,
    the connections you could maximize are the people you already know. However, with social
    media and digital technology, you can promote products over the Internet, do conference calls,
    and use other related technologies. In fact, you can even recruit and connect with foreigners from
    different countries.
    Network marketing doesn’t work for people who are after a quick buck. It takes hard work and
    great people skills – and a little luck – to get as many connections as you can. Of course, there are
    others who are just fortunate enough to earn big in the first few months. Not everyone gets lucky.
    Bottom line, everything still hinges on how well you execute and follow the basic principles of
    the business.
    So, what makes network marketing attractive?
    Now that you know the basic differences between the two concepts, you have a better
    understanding of network marketing. I’ll tell you why many people are doing it, and why you
    should consider getting into this marketing strategy as well.
    It is a real business you can do on the side. Essentially, network marketing is a serious
    business endeavor. It has a system that is patterned to a corporate team, where each performs
    based on the sales plan and directive of the leader. The sales director points out the quota that the
    team has, then the downlines would just have to execute it.
    What makes network marketing different and attractive is that you can do it in your spare time.
    You can also consider hiring people to do the job for you. It all boils down to capitalizing on
    your resources and time, even if you are preoccupied with other things of your life.
    It can grow to become your own business. Network marketing is ideal for those who want to
    have a sideline to help them pay for their bills and other expenses. The whole process is hassle-
    free. You just place your order, pay, and claim it. Afterward, you earn a commission that can be
    added to your monthly income. You first learn the ropes and dedicate a lot of hours in the
    business to help with its business goals and marketing plan.
    After a certain time, you help others and guide them on how things are done. In doing that, you
    end up practically duplicating yourself. As the number of downlines you have increases, you can
    have a hundred or thousands of people under you, helping you build your own business.
    You don’t need a huge investment. Another good thing with Network Marketing is that you
    don’t need to shell out huge capital. There’s no need for a specific location for you to set up your

    business. Most importantly, you don’t need to be highly educated for you to start your own
    business. It all boils down to your grit, passion, and skills to make things work.
    You achieve work-life balance. Lastly, Network Marketing is a home-based business. It is a
    business that helps you to travel and enjoy life with your family while you continuously earn.
    You don’t need to hire staff since they’re working and earning independently.
    Wrapping up
    It’s unfortunate how network marketing has a bad rep because of misinformation. As I discussed
    in this article, network marketing is NOT a pyramid scheme or a Ponzi. It is a legitimate business
    that has enriched the lives of millions worldwide. It’s an opportunity you need to consider
    seriously and with an open mind.


    Jimmy Larsen

    Network Marketing Expert
    Jimmy is a top earner with over 30 years of experience in the network marketing industry.

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