Network Marketing Business Opportunity: It Is A Pyramid Scheme?

Network Marketing Business Opportunity: It is a Pyramid Scheme?

While the label "pyramid scheme" has sometimes been attached to the network marketing business opportunity, it could not be further from the truth. A thorough analysis uncovers that Corporate America is much more inline with pyramid scheme tactics, while network marketing promotes equal opportunities for people on all levels of the company.

Some people have labeled the network marketing business opportunity as a pyramid scheme, but is this a correct assessment? In short, the answer is "NO." You can gain a better understanding of what a pyramid scheme truly is and how network marketing differs through an analysis of the definitions and business models.

While network marketing involves the promotion of an actual product or service, pyramid schemes typically involve the exchange of money only for the purposes of enrolling recruits into the group. This is actually a fraudulent method of doing business, and pyramid schemes are illegal in several countries, including the U.K. and the U.S.

The way the pyramid scheme functions, the top dog in the pyramid and a few of the first members of the organization earn large amounts of money, which are actually the enrollment fees from the recruits. The larger the pyramid and the more people buying into the group, the larger the earnings of the top members, and the less (if any) income the new recruits are able to earn. The newer recruits earn so little, because it has been spread out among the members higher on the pyramid. Furthermore, because there is not a product or service, there are no retail commissions to earn. Some new recruits who do not recruit new members may even find themselves losing money in the scheme.

It is easy to see that a legitimate network marketing business opportunity is not a pyramid scheme in light of this analysis. Also known as multi-level marketing (MLM), the network marketing business model only works if there is a product or service to sell. It isn't just about making money on enrollment fees, but rather earning money from personal retail commissions and recruits' retail commissions.

Corporate AmericaThe Real Pyramid Scheme?

While most network marketing business opportunities offer the same opportunity to all distributors and recruits, regardless of where they fall in the ranking, Corporate America provides a different kind of business model that isn't as friendly to the "little guy."

Most corporations have one top executive at a time, whereas network marketing allows unlimited top level earners who can earn the top commission rates simultaneously. Another example is how it is essential to the corporate business model that the lower level remains, or else the pyramid would fall apart. With network marketing, the top distributors train and encourage their recruits to improve and move up levels for the recruits' benefit as well as their own.

Simply put, the network marketing business opportunity model provides for unlimited potential for each and every distributor, regardless of their current level. Each distributor has his or her own personal business and is free to focus on increasing sales or increasing recruits or both at the same time. True network marketing brings freedom from the pyramid model and freedom from having to work for "the man."

Perhaps one of the most attractive aspects of the network marketing business opportunity is the camaraderie and team building evident in an MLM company. Because you can only benefit from your recruits' successes, there is not the backstabbing and elbow poking often found on the journey to the top of the company in Corporate America. You don't have to crush someone else to succeed. Instead, with network marketing there is a model put in place to give yourself and your recruits the best opportunity for clear-conscious success.

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