No Way, I’m Not Doing That, It’s A Pyramid Scheme!

I would be willing to bet that we all have heard someone say “Oh you’re doing one of those things?” or “That’s a pyramid scheme, it’s illegal.” People are quick to jump to a conclusion without any thought or knowledge of the business and only rely on opinions from others that are uneducated or have failed in networking.

Network Marketing or MLM companies date back to the Great Depression with a company called Wachters (1932), that is still in business to this day. While the largest company is Amway, one that the Unites States government has used to set the standards for how a networking company is operating. While networking companies per the U.S. Government is legal business operations, just like any other business some have given them a bad name and people who have tried the business and failed also talk bad about the industry even though the industry didn’t fail the person, the person failed.

The definition of “Multi-level” or “network” marketing is a form of business that uses independent representatives to sell products or services to family, friends, and acquaintances.  A representative earns commissions from retail sales he or she makes, and also from retail sales made by other people that he or she recruits.  Examples of well-known multi-level marketing companies include Amway and Mary Kay Cosmetics.

A pyramid scheme claims that they are in the business of selling products to consumers in order to look similar to a multi-level marketing company.  However, very little or no effort is made to actually market the product.  Instead, money is made in typical pyramid fashion…from recruiting other people to market the program.  Sometimes, new “distributors” are persuaded to purchase inventory or overpriced products/services when they sign up. A pyramid scheme will focus more on recruitment of new people rather than any sale of a product or service to an end-user consumer.  If the opportunity for income is primarily derived by recruiting more participants or sales persons rather than by selling a product, the plan probably is illegal.

[mlsp-cta campaign=”weeklymarketingwebinarsorg” layout=”wide” align=”center”]

So, when I hear people go “Oh no that’s illegal!” I always have to ask them if they work for a company and typically the answer is yes. Well, let’s look at any company, are they not set up in a pyramid style too? I spent 20 years in Emergency Medicine and it for sure is set-up in a pyramid. You have the Chief at the top, followed by a few Battalion Chiefs, then more Captains, and then lieutenants, then you finally get down to all the EMT’s and Paramedics. You see the Chief at the top does little work while all the EMT’s and Paramedics are out there grinding daily.   And this structure is typical with any business as well, you have the owner or CEO at the top and it dwindles down to the employees at the very bottom.

So, does that mean what you do is a pyramid too? Most of the time a little education can go along ways with a person that isn’t informed correctly on what a legal MLM is and why it is such a powerful industry.

Per the Bureau of Labor out of 100 people who start working at age 25, by the age of 65; 1 is wealthy, 4 have enough money to retire, 63 depend on social security, and 29 are deceased! 95% of people age 65 and over cannot afford to retire and work until they die!

The average work from home income is $59,250 per year (US) and 20% of home based businesses grossed between $100,000 and $500,000(US). In 2014 the network marketing industry had sales of approx. $34.5 Billion an increase of 5.5% from 2013. One in ten homes is involved in network marketing and approx. 50% of all US households use at least one product from a network marketing company.

So, next time you get the “That’s a pyramid scheme” don’t get all frustrated with the person, know your industry and inform them and educate them on what network marketing is and how it’s beneficial to the economy. Not everyone will want to get into networking, just like everyone I know will get into emergency medicine, but that never stopped me from continuing my career path in EMS and networking. Go out there and go for NO!

PS Want to learn more about being a successful entrepreneur and ready to break FREE? Click Work With Zach and I will personally respond and talk with you!

PSS: If You Don’t have a Team, Haven’t Recruited Anyone (or less than 10 people), This is the Course you Should Get –Learn to build a network online by a proven and documented mentor that have changed my life in 2015 CLICK HERE