What is multilevel marketing?
Multilevel marketing. What is it? By its name, it sounds confusing and complex. It does go by different names. A multilevel marketing company maybe referred to as a direct selling company, a networking business, or a home based business. Many people also confuse multilevel marketing with the pyramid scheme. In actuality, they are the same thing. Therefore, it is not too far off to have this confusion. However, whereas a pyramid scheme is illegal a multilevel marketing business is not. When you are approach by someone, as many of us have been, inviting you to join their exciting business adventure you may want to know the difference between the two.
The first one I joined wasHerbalife
A pyramid scheme really has the same structure as a multilevel marketing business. Imagine a pyramid. The top of the pyramid is the head. He or she receives the most money from its team. The head of the pyramid will recruit, let us say, two people. Then those two people are encourage to recruit at least two people. And so on and so forth. Each person that joins recruits more people to join. Causing the team to grow exponentially. Like a pyramid, the top or tip of it spreads down wider and wider at its base.
During this growth through recruitment, each recruited person will pay a fee. Here is where the difference start to come out. In a pyramid scheme the recruited person will pay a large sum, let us say five thousand dollars to the top or tip of the pyramid. This continues with each new person that joins. Until the top person makes so much money and the people below him or her will move up a level, this will continue as long as there are new people able to be recruited. The new recruits buy into the pyramid under the illusion that they will be starting a new business with great return. However, in reality they never receive any product to sell or services.
What’s a Pyramid Scheme?
Where a pyramid is based on empty and false promises, a multilevel marketing business may operate the same as the previously mention pyramid scheme with one major exception. A product or service being sold. As well as having true support and training material.
Essentially that is the only different between the two selling modules. One actually has a tangible product or service being sold and the other does not. Without that, a business is just masquerading under the name multilevel market, direct selling, or network-marketing name in order to fool you and the government.
A legitimate multilevel marketing company can be a very successful and promising opportunity for anyone willing to work hard. Many household companies have been in operations for years, decades really, that follow this same marketing model. You can sell products on behalf of the company and whatever you sell always makes it upstream to your recruiter, his or her recruiter, and so on. The product can range from make-up, kitchenware, or even travel services. Really, the sky is the limit.
Whenever and if ever you are approach by someone inviting you to such an opportunity, do not be afraid to look into it. Although there are many businesses claiming to operate under this marketing, model and are really not. Many businesses are exactly what they say they are. A direct product selling business that operates through a vast network of people, working independently together.