Many people confuse network marketing with pyramids. This is troubling for network marketers because pyramids have a bad name (and deserve to). What are the differences between pyramid marketing and MLM network marketing? Keep reading.
In MLM network marketing there is always some type of product being sold. The range of products is huge and there are over 1,000 different network marketing companies out there. The one thing that’s different is that the specific products are only available through the MLM company. You cannot find it retail, or anywhere else because it’s only available to members of the network. Therefore, if you want to buy it you will have to join under an established member of the network, and become a member yourself. This is how the people involved make their money – the recruiting member receives a commission from the products purchased by the new member.
Once you join, you now have to follow the rules, which usually include committing yourself to buying a certain amount of that product per month. Your business/job with the company is to promote the products to other people so they want sign up with you so they can purchase the products.
With the pyramid scheme, a person is up against just a what it sounds like – a scheme. Clearly the only people who stand to make money are the ones who thought it up in the first place. One of the best examples of this type of fraud is the infamous “chain letter” that has been circulating for years, which has bilked countless people out of their money. When a person opens the chain letter, a cheerful salutation by someone named “John” or the like, happily announces that he now makes thousands of dollars per month and has been retired from his regular job since the year before – all thanks to this really easy program he was made privy to. And, the great news is – anyone can do the same!
Next, you must start the ball rolling – and, in order to do this, you must send a disclosed amount of money to the person whose name and address is in the Number One position on a list that comes with the letter as an attachment. Once you do this, you can remove that person’s name from the Number One position, and move everyone else on the list up one notch. Your name then goes into the empty “last position” spot on the list. Then you get to make a couple hundred copies of the letter and list you received and send them to as many people as you can think of – who are expected to follow suit, of course. Once this is done, you are supposed to just kick back and wait for those thousands to come pouring in – which of course, they never do.
So now you know the main differences between pyramid marketing and MLM network marketing. In MLM the company is based on introducing (selling) products and services to people so you can make a commission… just like it happens in stores. In a pyramid you are basically just trying to convince someone to give you their money. One is a real business that you can easily start by yourself and generate legitimate income, the other is a scam designed to steal your money.
Gail Ramberg has been creating TheNetworkMarketingBlog to show you: how to build an MLM business, how to separate the legitimate info on the internet from the bad stuff and why to avoid pyramid marketing. She will also teach you to separate a real business opportunity from a fake.
