So you are thinking about joining a networking marketing business and wondering if it’s some type of illegal pyramid scheme.
First things first: network marketing is certainly not a pyramid scheme. Pyramids are money games and usually, there is no product involved at all. Pyramids are based on money changing hands, that’s it. They are usually based on the notion that you can get rich quick. If it sounds too good to be true, well you get the idea.
Network marketing on the other hand is perfectly legal. With networking marketing, people provide actual products at a fair price. Everyone who joins this type of business has fair chance to make money based on the results of your efforts in building an organization that sells products.
Doing your research is smart! Do not join a pyramid scheme. They are illegal and you can get in a world of trouble. Many people confuse network marketing with pyramid schemes because when looking at the compensation plan, it looks like a pyramid.
Think about this – a pyramid structure is the basis for almost every business in the world! Right there, you can see that a pyramid scheme, is very different from a structure, which is the basis for most businesses.
Network marketing enables a legitimate company to sell products via a person to person distribution channel. Each person that joins the company, is compensated via commissions for each product sold. In addition, you can recuit new distributors and earn bonuses based on the volume sold by your team.
To really illustrate the difference between network marketing and a pyramid scheme, this video says it all!