Why People Call Network Marketing Pyrmaids

Copyright (c) 2010 J.R. Quarles

Network Marketing Companies has been around for many years and still today, people bad mouth this business. People often call this marketing mix a scam because of their previous failures.

What is Network Marketing?

Network Marketing is a marketing strategy that compensates independent sales people/distributors to market and sell products or services. Network Marketing is also referred as Direct Sales, Pyramid Selling and Referral Selling. Of course you've heard of companies like Mary K, Avon, and Amway, to name a few. Many Network Marketing companies make billions of dollars per year.

So, what's the negative aspect?

The Negative reviews of Network Marketing is the Pyramid structure. People who typically use the word "Scheme" are not educated on what network marketing really is.

Every company has a pyramid structure to it, unless you're a small independent business owner with a mortar-brick company. Let me explain - with Corporate America, you have the CEO/ Owner is at the top of the chain. Then you have the middle level executives that are under the CEO. Next, You have the managers/supervisors who are under the middle level executives. Lastly, you have the normal workers that are under the front line managers.

You're wondering now, what is the "Pyramid Scheme" everyone is talking about. Let me explain. A Scheme is where you only do recruiting and no products or services are taking place. An example of this is when someone requests 20 dollars and in turn you get 2 other people to send you 20 dollars. There are no real value or benefits being received.

Network Marketing has created more Millionaires than any other business in the world. With any Network Marketing company, you need to research their business model and products. With most Network Companies you can get paid off retail of the product alone.

Getting involved in Network Marketing will not guarantee any success. You must work Network Marketing like any other business. The clue is Marketing. If you can't market well you will have a greater chance of failing.

Your first step in marketing should be creating a brand.You need to brand yourself as an expert, friend, and mentor in order to be successful. People don't join a business for the products- they join because they can see themselves working beside you.