So.. This is a pyramid scheme?

MLMs have to improve in ways that fix attrition. Once they do that then they can migrate to the IRP branding. Control attrition and you can lower the 97 percent failure rate.


MLMs have a bad rep because of the failure rate and because of the marketing. If you market a system that makes the consumer belive they can make insane amounts of money quickly and with no work when they really can't then you will get a bad rep over time as those consumers don't make much money as fast as they want. MLMs are good opportunities but if the person entering them does so with unrealitic expectations then they will not stay and there is your failure rate. Because of this some companies are going back and revising what an MLM is. Some have great potential in breaking the 97 percent failure rate by controling attrition better and awarding the member sooner. I see a shift in the market that will in time replace mlms with IRPs. (Incentivised referral programs) One24 is a big leader in this since. I point them out here because they are the first company to drop the mlm slogan completely while moving twords IRP and they have made changes that do handle attrition rates much better. More people are staying in the program because there seeing results and they expect those results to start small and grow big over time. The attrition is lower. There are caps in place to help make sure that the top 3 percent cant run away with all the profits and awards bonuses based on team achivements. This makes it easier for the avarage person to get started. When more people stay in the program then more people make money.

Point being is that MLMs are good but they will continue to improve over time as companies revise new programs and create compitition in the indursty. In time you may not see many MLMs around in name though no doubt the companies of the future will still have MLM roots.

Avon, and Mary Kay cosmetics work on this principle, lots of very established companies do. I myself work Pure Romance, but just promote the products and not the opportunity so much. I earn a few hundred extra dollars per month and do have recruits, but never solicit them because it's not my main source of income. They ask, I tell. Long term, it will probably pay off, but it's not an overnight thing.

kailo
Hi Kailo, I always remember An Amway Diamond, Said Explain Pyramid Selling, Which I Did, Incidently I still get my 2 biz opps called pyramids, from the horses mouth (me), Eplain pyramid selling too them if you can, that was outlawed in 1973, Networking/MLM is a legitimate opportunity, for anyone of 18yrs old & above, I have this Question everyday, Hows Your Pyramid, It's working just great and the cheques are pouring in, they are the losers Sado's, Keep Going Whatever the crap you get, thankgod I did'nt steal my dreams !!!
Best Wishes
Michael

Most of my peers start off conversation with me asking me how's my pyramid scheme going. They are always trying to see if I failed already, but sadly for them, that will not happen!

kailo: Most of my peers start off conversation with me asking me how's my pyramid scheme going.
"Peer; a person who is equal to another in abilities, qualifications, age, background, and social status. "

Mindset. If those are your "peers" you need a different outlook - or business.

My "peers" ask how they can help.

ThePhoenix
When you drag someone in on their backs in your biz, that is where they stay. when you start making money, you would pay them double to leave. when you OWN or realize you have a golden goose that lays golden eggs with your business/products, your posture and self worth increase and your leadership will attract other leaders/followers. until you are "10ft tall and bullet proof" your network succsess may be limited. cashman got the answer perfectly btw-that is someone who values their time-is committed to what they do and have, and move forward for those who are ready. you may consider putting them on your list to follow up, they say the fortune is there! for the record, i have had two seven success, one 8. Dr. Mike

Thanks for the positive and great feedback on this thread everyone. I am fairly new to Network Marketing but as soon as I joined, I started educating myself on the pros and cons of this business and I am now a firm believer of it irregardless of what negativity is spread around. It takes a bit of researching and reading to fully understand what Network Marketing or MLM is.

Nevertheless, I would also like to add that, I actually came across a very good article illustrating what a pyramid scheme is. In a nutshell, it talked about Pyramid being a shape, with a certain hierarchy system with the head being on top, then there is a down line team underneath.

It also illustrated that, as is the pyramid shape, so are companies/corporations/institutions etc formed in terms of the head to the managers to the subordinates etc depending on the structure of the organization.

So if pyramid is a shape and the same concept is used in organizations or institutions, why do people make such a farse of pyramids in home businesses or Network Marketing industries, if companies and corporations have the same concept from the head and then the down line team?

Food for thought!

The Leader's Club posted a video about this question on FaceBook today.
Their answer was "What is it about a pyramid that bothers you?"
Don't try to explain or defend, ASK why and let them explain.
Made sense to me.

p.s. They are giving away an iPad to a FB fan when they get 2,000 likes.
Only 1,900 to go... Seriously though, their 52 free videos are worth watching.

If people knew the chance of making money in MLM, they would never join one. The reputation most MLM's have earned as a "pyramid scheme" is a result of the hype the distributors themselves have perpetuated. Just go to a convention and listen to all the glowing stories of lives changed, big houses, new cars, etc. Whether a particular company is a legitimate business or not, the entire industry has a tainted reputation for which it only has itself to blame.

I suggest showing them the compensation plan set up. Once they understand the model they will understand that it is not a pyramid scheme.

danmoneymaker: If people knew the chance of making money in MLM, they would never join one. The reputation most MLM's have earned as a "pyramid scheme" is a result of the hype the distributors themselves have perpetuated. Just go to a convention and listen to all the glowing stories of lives changed, big houses, new cars, etc. Whether a particular company is a legitimate business or not, the entire industry has a tainted reputation for which it only has itself to blame.

Agreed,

Sadly, this is true for the most part, and it makes it just that much more difficult to succeed unless you fully understand the industry. Most quit before they begin due to the hype of easy money, low cost start up and the get rich quick BS, but once you find the right company, the right product, legitimate money saving products or services, most will not succeed. I prefer two tier affiliate programs which do not carry the stigma of MLM industry, works for me, you don't have to waste your time trying to get past all the negatives on MLM industry.

Success to all,

I have learned that MLM really is not might thing right now. I have tried many, but have either given up because the company just wasn't as good as I thought it would be or more often than not quit because I realized the product was not selling for me the way I thought it would.

At this point I have come to realize that being able to market online and offline just is not my strong suit at this moment. I however am not giving up on it, as I do try to market for a company I am with now, but can be very successful without referals.

For the first time I have found a match for myself which is working out well. I am not bringing in big bucks yet, but consistently increasing my earnings daily.

I hope to some day find a product which I can feel very comfortable marketing and have the know how to drive traffic to get a huge downline and work on a residule income. I have many to prove wrong and it has become a goal of my to accomplish.

Chad

Interesting,

Everyone can find a comfortable niche in MLMland if they just keep looking. There are some great products out there, but sadly, most are overpriced in comparison to similar products you can find online. MLM use to be easier before the internet, but these days, everyone is looking for one thing, lowest price for equal or better products and services. It is all about saving money in this recession, and this is reason the failure rate is and always has been high in the MLM industry. It is more difficult to find a patented or exclusive product as well, something MLM industry was good at years ago. There were some breakthrough products over the years, but sooner or later, you would find the same for less elsewhere and this is why attrition rates are so high in the MLM industry.

When you research and find a great product which can be sold for less than elsewhere, or if you find one which is patented and exclusive, then you have a good shot at success if you work hard and don't quit. There are so many companies competing today that finding the perfect company for everyone is more difficult than ever. Having been in this industry for decades, I have seen it all, and have had my successes and failures, but I never give up for once you taste the success of MLM industry, it is near impossible to get out of your blood. lol

Success to all,

Its definitions like this (below) that look MLM bad. So long as your MLM sells tangible products and don't rely on new recruits to make money to sustain the structure, then you should be legally safe. Just try not to recruit retirees or people with disability as they can't be relied on to grow the structure or lawyers who can file a nuisance lawsuit once they don't make money from it and find out that they can't get their money back.

"The scammers behind a pyramid scheme may go to great lengths to make the program look like a legitimate multi-level marketing program. But despite their claims to have legitimate products or services to sell, these con men simply use money coming in from new recruits to pay off early stage investors. But eventually the pyramid will collapse. At some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and many people lose their money."

Good point,

All MLM's are a pyramid, and like has been mentioned, it all comes down to a tangible product or service. We have all seen the worthless eBook deals, or a loaded with crap eBook programs tyring to look legitmate, but it is short lived since most can find the same eBooks for free if they look. Tangible, good decription, something you can hold in your hand makes for the best MLM products. Consumables are the best products to target where a customer orders every month or so, this is the best program to consider in my experience.

I recently started to evaluate a new product which targets the 77 million babyboomers who are into anti-aging products like never before, and WOW, was I impressed with my own results, and with everyone who has tried Anti-Aging product, so given the recession, people always want to look younger than they are, so most will order over and over again even in a recession. The key is to focus on recession proof products first and foremost.

Success to all,

It is not a scheme, it is a system.

I think you have to believe in what you are selling!!! Because if you don't believe in what you are offering why bother???

I always like to ask people who ask if this is a pyramid, what is a pyramid? Watching their expressions is priceless, and in almost every case, they cannot answer or explain what a pyramid even is. lol

My response goes like this:

"No this is not a pyramid scheme but I can see how you might think that because it at first doesn't seem natural because it is based on profiting from giving a referral. But if I asked you were is there a good Mexican Restaurant to eat at you could probably name three right off the top of your head. And if you were network marketing them to me and I went to one of them based on your referral not only would I be enjoying a good meal but you would be getting perhaps 10% of what I spent there ... every time I went to eat there now and into the future. When you look at it that way you see it isn't a pyramid at all but a form of profit sharing. '

I explain to them that the product we are selling has been sold before the opportunity was attached to it. Usually a pyramid means money changing hands with no product or service offered. Always ask yourself does the product I am promoting or selling meet the smell test. Would someone buy this if I was not offering an opportunity. It is sometimes hard to find those especially in big ticket programs. That is why it is rare these days to find a good one. I am glad I have found one that I am passionate about that attracts winners with desire instead of lookie lous and tire kickers.