One of the first questions I inevitably get when presenting my network marketing company is "Is this a pyramid scheme? Aren't those illegal?" So let me state once and for all - NETWORK MARKETING IS NOT A PYRAMID SCHEME. Pyramids do exist and sometimes it's hard to tell a legitimate business from a scam. What makes them different?
1. A legitimate network marketing business will have a genuine product or service. This product or service will have value of its own and be priced accordingly. In a pyramid, there is usually no real product or service. If it does, they are often priced well above fair market value.
2. A legitimate network marketing business will disclose any information about the company to anyone interested in knowing more. Pyramids offer little to no information about the company unless an investor purchases the products and becomes a participant.
3. Network marketing businesses encourage the sale of the products or services offered by the company. Commission is paid on these sales to reps involved in the business. Pyramids promote an income stream that chiefly depends on the commissions earned by enrolling new members or the purchase by members of products for their own use rather than sales to customers who are not participants in the scheme.
4. In a network marketing company, the money to pay commissions comes from the sale of products or services. In a pyramid, the money to pay commissions comes primarily from the participants.
5. In a network marketing company, you can earn a decent living. In a pyramid, 90% of the participants never recoup their initial investment. In a pyramid scheme, those at the bottom can never advance higher or make more than those at the top. In network marketing, this is not the case.
Pyramid schemes do exist. They get more sophisticated and harder to spot all the time. And everyone wants to be sure they're not getting caught up in some sort of scam. But there are many good, solid, legitimate network marketing companies also. If you are looking for a way to make some extra income, or even one day replace your job with a business of your own, I highly recommend you consider one. If you aren't sure if it's a legitimate business, review the checklist above. If anything about the "opportunity" makes you uncomfortable, look elsewhere. And if the person you are speaking with about the business pressures you to get involved, RUN! That is a definite warning that they are more interested in recruiting other people into the business than in selling products. I will ask you to look at my business. I may even get a little pushy because I care about you and want you to have the same opportunity I did. But if you look at the compensation plan, the business overview and the products, and still tell me you are not interested - I will NEVER, EVER push you to be on my team!