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Why Network Marketing Companies are not Pyramid Schemes
Author: William Winch  | Posted: 21-05-2008 | Comments: 0 | Views: 41 | Rating: (63)  (?) 
Over the years, the term Pyramid Scheme has become synonymous with Network Marketing. Why? Who knows. Maybe someone coined the phrase after losing a lot of money on a networking system that didn't work. Or maybe the link came from the fact that there is a 95% drop out rate in the industry, and people automatically blame the business structure.
Whatever the reason, Network Marketing is not a pyramid scheme designed to drain your savings account and put you in debt. Only individual people can make the decision to spend their money improperly. As far as I have seen in my twelve years of being a Network Marketer, no one has ever twisted my arm to do anything I didn't want to. There are lots of businesses that don't guarantee success. Business structure has nothing to do with success or failure.
When it comes down to it, a pyramid is just a shape, and all business are pyramids. There is a CEO at the top, and everyone else falls underneath him or her. No one can make more money than the CEO, so the shape can never change. It will always be a pyramid. It builds out as you go down because there are more people make less and less money.
In Network Marketing, you don't even need to build a team of people in the shape of a pyramid, square, or any other shape in order to make money. If you signed up as a distributor for a company, you can make a very good living simply selling products to customers at retail. Where is the pyramid? You're not building a team. It's just you.
When you want to grow a successful business on the efforts of others, however, you do need to sign up at least one other person and teach them how to properly market your product or service. But just the same, you don't need a ton of people to earn a good living. What if you only signed up one person, who signed up one person, and so on. That looks more like a totem pole than a pyramid.
In corporate America, no one ever makes more money than the top of the pyramid. That shape is never going to change. The CEO will always be at the top, and everyone else will always fill in the pyramid as the company sees fit. People can move freely throughout the pyramid, but no one can change the shape or climb higher than the CEO. That, to me, seems like a well-thought out scheme to run a business.
In Network Marketing, it is totally possible to earn more money than the person who signed you up into your business. You are still located underneath them as far as placement, but you can move above them in profits, bonuses, royalties, and any other avenues of income you desire. Doesn't that make an upside down pyramid? And if you have total freedom over your income, where is the scheme?
Most network marketers are, unfortunately, never properly trained on how to build a successful home-based business. This is the main reason for the 95% drop-out rate in the industry, and probably where someone felt like they were schemed. Companies must teach techniques that are very easy and simple for everyone to grasp and understand. They may work for some, but not for the vast majority.
When you have a job and you want to get a promotion to move ahead, would you go to a college to learn new skills from a professor, or would you take tips from the person sitting in the next cubical who hasn't advanced in the past 10 years? You would put your trust in something that guarantees you success. It's the same for Network Marketing. You need to look elsewhere for education if you want to advance.
There are proven ways of making things happen that are a whole lot easier, cheaper and less time consuming than what you are (probably) being taught. Your companies won't teach you these because it takes too much time to properly train you on how to be the CEO of your own company. Look for education that teaches proper marketing techniques with money back guarantees.
When things aren't going the way you intended, the solution is not to bash an entire industry by calling it a pyramid scheme. Part of the process of building a successful network marketing business is becoming a leader. Leaders are willing to change their way of thinking in order to benefit their company. And they develop the kind of mindset that doesn't see pyramids.
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About the Author:William Winch is a Business Growth Specialist whose mission is teaching other struggling entrepreneurs how to expand and explode their home-based businesses without breaking the bank. A former High School and College Business Educator and Counselor, he mentors from his home office in Rochester, NY. If you are interested in receiving his FREE 20 page Report on how to explode and expand your home-based business, click on on FREE REPORT or by calling him directly at (585) 234-5283 for a free business consultation.
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