The truth about pyramid schemes

If you just joined or are thinking of joining a network marketing business and someone told you it’s just a pyramid scheme, or maybe you have that misconception…Pyramid schemes are illegal in the United States. The truth is, a network marketing business can bring in viable income for a person who doesn’t mind putting in the work.

Things I wish I knew before starting a network marketing business:

First off, this post is not promoting any one company or opportunity. I’m a big believer in the idea that you have to do what is right for you. This is a compilation of things I have learned over the last 3 years. I think a lot of people will find it useful; whether you currently run a business or are thinking of joining one. My hope is to help you form an educated decision on picking the right company/product and give you some encouragement if you have already done so.

  1. It is going to require work. Sometimes hard work, other times easy work, long work, short work, fun work… but the key word is WORK. The level of work that will be required will fluctuate. A network marketing business is appealing because you can essentially work when you want to. There is no boss, no time clock, no weekly schedule made by someone else. It is one of the greatest benefits of the model but also a huge pit fall. If you never show up to work with this business, there is a big chance that nobody will know or care. It’s an easy in and an easy out. That brings me to the next one…
  2. People quit all the time. Do you know how many companies I joined and I never did zip with? Three. That is not including my current one. I joined and never said a peep to anyone about them. I think I mostly felt embarrassed or maybe afraid of the possibility of rejection. Sure, I had invested some minimal amount of money to join but that was worth wasting for the sake of sparing my feelings if anyone were to reject me. Rejection is hard, especially when you are talking about it coming from your closest friends and family (which is where most people in NM start).
  3. Rejection is part of the formula. Yes, nobody likes being rejected. Having someone say “no, thanks” is hard enough when it’s a stranger and when your own friends and family reject you, it can be almost painful. You should know that when you get a NO, it’s really just a “not right now”. Does a waiter run to the back and cry after you say no thanks to the daily special? Probably not. You are offering a product, people are not rejecting YOU so don’t take it too personal. You will have to grow thicker skin to survive.
  4. It is a business not a JOB. You don’t pay to get a job but you normally spend a lot of money if you are starting your own business. Network marketing offers the opportunity to own a business without the massive overhead or upfront investment that a traditional business venture requires. Therefore, you can’t mindlessly show up for this business like you could a job, you are in charge and without you nothing will get done.
  5. Not all compensation plans are created equal. There are companies that will upgrade you to a higher commission percentage and/or title by spending more money on your enrollment package. Why is that? Question that! They just took more money out of your pocket for a promise that you will make more money if and when you sell the product. Did the more expensive package offer you more product to SELL? If yes, then you are on the right track. If all it gave you was more product to SAMPLE (a.k.a. give away for free) then I would be cautious. Is the company waiving around expensive cars or vacations as incentives? Ask yourself why you need the business in the first place. Most people just need some extra income so their bank account doesn’t feel so strained. Will that fancy car burden you when you don’t make the sales quota and are required to make the payment yourself? Do you have the extra money to spend on airfare, food, childcare, etc for that tropical vacation?
  6. Your product needs to be consumable or create a recurring need. How much jewelry can you sell to your friend Becky before she tells you she’s got more than enough? How many pots, pans, and spoons can one person buy? Etc. At some point non-consumable products will not sell to the same person. If you are going to offer a product, make sure it is something that people can run out of or absolutely need to have month to month so you still have business in the future. Otherwise, you will have to work much harder to find new customers consistently in order to stay in business.
  7. Your product needs to be unique. The more unique the better. People can buy makeup anywhere from Walgreens to Neiman Marcus, why should anyone buy it from you? If people can easily buy what you are selling elsewhere, you are going to have a hard time getting them to buy it. You need to have something they can only get from you.
  8.  There should be a clear difference between customer and distributor. Not everyone wants to be a distributor. Your company should offer a clear and distinct opportunity to chose to be one or the other. I’ve found this to be a turn off for me because I often want to support my fellow network marketers by becoming a customer however, as an existing distributor for another company, I must avoid a conflict of interest and I will not order from a company that requires me to be a distributor in order to purchase at a discount.
  9. The company should have a strong, solid marketing plan already in place. Unless you are a network marketing pro, you’re going to need good marketing to help you keep going. You need a marketing method that is easy for you to learn and then teach to people who join your team. Does the company have a good BRAND in place? Is it easy to share? It it unique? Straightforward? Might people confuse it for something else? These are all things to consider.
  10. Is your product affordable? Not everyone can afford $100 face cream. Yes, it may be the latest and greatest most super duper formula from space but if it’s too expensive you’re going to have a hard time selling it. Especially if you are starting with your warm market (family, friends, acquaintances).
  11. Don’t put a deadline on your success. Some people take off with their business right away, others go slow and steady, and some move at a snail’s pace. It is your own individual race, your own journey. If you say “I’m going to try this for __ months and if I don’t make money I’m done after that” you have already given up before you even began.
    He knows what he’s talking about

    Your inner voice is very powerful, instead say “I’m going to do this for as long as it takes”.

  12. It is a journey. There will be lessons to learn and growth to be had. Prepare yourself for this, expect it. When business seems to be slow, work on yourself; read a motivational book, watch some TED videos, connect with fellow business people.
  13. Don’t give up!!! Giving up is the #1 way people fail. Remember why you started in the first place; was it to pay down some debt so you can take your kids in a nice vacation? to bring in some income while staying home with your kids? to help pay for your child’s college/car/etc. Whenever I feel like throwing in the towel, and we all have those days, I remember that my kids are the reason I wanted to do this in the first place. They keep me going. Just like I would never quit on being their mom, I will not quit at working for something that benefits them.

Comment below if you have anything more to add on this topic. Thanks for reading!

3 Replies to “The truth about pyramid schemes”

  1. I love this article about things I knew before joining a multilevel co. You are 100% right about keeping in mind that this is WORK this is a career but what’s good about it is that you put into as little or as much time you want and the rewards are amazing.
    Thank you for the article I really enjoyed it

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