MLM

Multi-level marketing (MLM) :

Multi-level marketing (MLM) (also called network marketing) is a term that describes a marketing structure used by some companies as part of their overall marketing strategy. The structure is designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation in the form of a pyramid. The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.[6]

pyramid scheme :

pyramid scheme A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered. Pyramid schemes are illegal in many countries, including the United States,[1] the United Kingdom, France, Germany, Norway[2], Albania, Canada, Romania,[3] Colombia,[4] Malaysia, Poland, Bulgaria, Australia,[5] New Zealand,[6] Japan,[7] Italy,[8] Nepal[citation needed], Iceland[citation needed], Philippines,[9] South Africa,[10] Sri Lanka,[11] Thailand,[12] Iran[citation needed], the People's Republic of China,[13] Mexico, Portugal and The Netherlands.[14] These types of schemes have existed for at least a century. Nowadays, subtler schemes exist, whereby wealth is still attained by the owner, but not unless those at the base are also earning.

Is Network Marketing a Pyramid Scheme? :

Is Network Marketing a Pyramid Scheme? If not, what's the difference between network marketing and a pyramid scheme?

Slide 4:

Somebody has just approached you and asked you to join their network marketing business and your instant thought was - is this one of those pyramid scams?You made the right decision to do some research and be concerned, because pyramid schemes are illegal and can put you in to a lot of trouble. The good news is that network marketing or multi-level marketing is a legitimate and legal business model. On this page we will help you to identify the differences between network marketing and pyramid schemes, including a checklist of things to look for.

To start with we will review the similarities and then work to distinguish the two. :

To start with we will review the similarities and then work to distinguish the two.

Slide 6:

Generally, the initial concern for people when introduced to a network marketing opportunity is when they see the compensation plan which resembles a pyramid in shape. Instantly they fear the worst as they draw a resemblance to illegal pyramid schemes. The truth is that this pyramid structure is the same as every other sustainable business model across the world. This is best highlighted in the diagram below

Pyramid business structure :

Pyramid business structure Is it the shape of the business model that dictates whether a business model is illegal?No, of course not. If this were true every profitable company, government, church and school would be illegal and shut down. It is not so much the shape of the pyramid that people should be concerned about, more the way in which the pyramid is created that distinguishes whether or not it is legal. Let’s review.Pyramid Scheme (illegal scam)

pyramid scheme :

pyramid scheme A pyramid scheme can be defined as a fraudulent money-making scheme that is based on a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme without a legitimate product or service being delivered. Eventually the number of new recruits fails to sustain the payment structure and the scheme collapses with most people losing the money they paid in.In a more practical sense, probably the easiest way to identify pyramid schemes is firstly there is no legitimate product or service involved (ie you do not get a legitimate product in return for your initial investment). The second way to identify pyramid schemes is that you do not get a financial return unless you have successfully introduced a number of new recruits into the pyramid. Basically, pyramid schemes concentrate on the money that you could earn by recruiting new people into the pyramid and generally ignore the marketing and selling of any products or services.

Network Marketing (legitimate, legal business model) :

Network Marketing (legitimate, legal business model) The concept behind network marketing is a distribution model that allows a company to sell their products directly to the consumer. Choosing to use a word of mouth approach (networking) instead of advertising through traditional streams (eg media). Therefore instead of paying the media for advertising, network marketing companies are structured to reward distributors through commission in return for selling their products and finding new customers.Therefore the main focus of a network marketing company is product distribution. In fact, in a legitimate network marketing company, distributors are not required to recruit new distributors in order to earn a commission; they can earn money purely by selling the company’s product.Although distributors can choose to sell the company’s products to earn their commissions, not everybody wants to be a sales person and therefore choose to recruit more distributors into their organisation as a means to build their referral base. Not only does this create a group of loyal customers, it also allows you to leverage the efforts of others to create a residual stream of income.

“I would rather earn 1% of 100 people’s efforts than 100% of my own efforts”- John Paul Getty (American Billionaire) :

“I would rather earn 1% of 100 people’s efforts than 100% of my own efforts”- John Paul Getty (American Billionaire)

Slide 11:

So in summary, despite the fact that network marketing and pyramid schemes share a few similarities (i.e. the pyramid shaped business model shown in figure 1, and that in both you can recruit new members) network marketing is a legitimate business opportunity and one where you can earn a substantial legal income. You don’t have to take our word for it, network marketing is now being endorsed by a number of leading businessmen worldwide.

“If I lost everything and had to start again, I would find myself a great network marketing company and get to work!”- Donald Trump (David Letterman Show) :

“If I lost everything and had to start again, I would find myself a great network marketing company and get to work!”- Donald Trump (David Letterman Show)

In particular, the following 2 questions: :

In particular, the following 2 questions: 1. Is there a legitimate product involved? What do you get in return for your start up investment, other then the potential to earn good money? If you're not getting a product or service or if the training tools appear to be overpriced you could have discovered a scam. For more information about recommend products please refer to the "choosing the right product" chapter. 2. Do you get commissions based on product distribution or on recruitment? If they are paying commissions based purely on recruitment, walk away now.

Slide 14:

Does the company have a proven track record?If the company has been around for a few years then there is a fair chance that governing bodies that police pyramid schemes have already pulled the business model apart and given them the ok. Publicly traded companies are normally your best bet

Is this a get rich quick scheme? :

Although there is a lot of potential to earn very good money in network marketing very few have made it quick, most make their millions through consistent effort. So if it sounds to good to be true, it probably is. Is this a get rich quick scheme?

Why We Want You To Be Rich :

Why We Want You To Be Rich

Slide 17:

They are sharing with me all the reasons I would fail. I can do it anyway, found success and live a life most people only choose to dream about.What's great about Network Marketing is that anyone can make as much money as they like...regardless of their business experience, financial situation or education! Network Marketing provides systems, leadership and the ability to work from home. Network Marketing has provided an opportunity for average people like me to achieve extraordinary financial results and have total control in their life. There are a lot of opinions about MLM and most of them are negative, you can choose if it is for you, but the fact is that leaders achieve here amazing riches. You can listen to free audio books from these two leaders by registering on http://www.whywewantyoutoberich.com/ and learn a little bit more about. First one is some rules from THINK BIG the book by Donald Trump Another one from Kiyosaki where he is telling how he the average guy from Hawaii become millionaire and partner of even richer guy Donald Trump

What training do they provide? :

What training do they provide? A good company has a solid training system.