I was recently asked what I thought about network marketing as an alternative way to generate income or if they were all just a scam like a pyramid or ponzi scheme. Just about everyone that I have met in my life has in one way or another has had some form of experience with network marketing. For those who are not sure, it is more commonly referred to as MLM or multi-level marketing. That term would usually generate negativity amongst most people as one would generally think “pyramid scheme” as their first thought. It is so negative for most people that MLM companies generally try to avoid using that term to describe its company’s business model.
The first time I was exposed to network marketing was when an old friend contacted me and was highly enthusiastic about a business opportunity. He asked me to go with him to see what I thought about it since I had a background in business and so I decided to go see what it was about. As I entered into the presentation room, I was personally expecting a room full of established business people or start up entrepreneurs. Instead, the room seemed to be full of regular people which seemed odd to me as with most serious ventures such as opening a franchise the pre-requisite usually requires that you have a fair amount of capital to initially start up the business. As I watched the presentation, it seemed like a fairly interesting opportunity as they discussed about the market potential and the value of the services that you would be offering. However, the second they started to show clips about how you can further expand your income by recruiting others and earning a percentage of their customer base all flags went up as I became immediately turned off.
Afterwards I decided to do some research about the industry in general because my judgement was mostly based on what I have heard and read from others about these types of businesses and in my opinion it is usually better to base your verdicts on facts. As I tried to do research about the industry, my method of search was to constantly search for topics about “pyramid schemes” as that was the only terminology that I knew to describe about a business model which involved the recruitment of others who would then do the same. Eventually, my persistence led me to learn about more formal terms such as mlm or network marketing which helped me in researching thoroughly about the industry.
The industry seems very black and white as you have one side that condemns anything and everything that has to do with multi-level marketing and the other side which swears by it as a viable form of business. For the side that condemns it, I was able to perfectly see how they formed their current opinions as the constant deception of easy money and exploiting the people that you know can ruin one’s personal life and financial future. For the side that was in favor of it, I was also able to see the business model and how it is suppose to work from their point of view and in many ways it did seem like a viable way to move products and services.
With some newly acquired knowledge about the business model, I now had a better understanding on what the common theme was in terms of the negatives and positives of the industry. As I went through my regular routines, because of the research that I had done I became more aware when I saw a company utilizing a multi-level type of compensation structure and was surprised when I realized that a lot of the affiliate marketing and web publishing programs that I used to promote large and reputable sites actually had this type of recruiting compensation structure in place. Basically, you start by publishing various ads on your web site and are compensated for page views, clicks or sales and as an incentive for signing up others to do the same you receive a percentage of their efforts as well.
When I think back even further, there were also a lot of other widely popular programs that utilized this type of structure. For example, I remember back when the Internet was still booming there were these pay to surf programs with the most popular one being AllAdvantage. You were basically compensated by surfing with this toolbar or what they called a “viewbar” which would display advertisements for you to view while you surfed the Internet. While the compensation was fairly low when you look at it from a per hourly basis, you had the ability to sign up others to do the same and you would receive a percentage of their productivity. It’s easy to see how one could generate a worthy income stream through this. Obviously I wouldn’t categorize things like these as a traditional network marketing business opportunity, but it is just to show that at one point another most of us have been involved with something that had a multi-level compensation structure in place and in these cases I personally did not classify them as a scam.
Based on what I know and from my personal experiences, network marketing seems like a perfectly viable way of generating an income. There are just so many scams and misrepresentations that you have to go through to find a legitimate opportunity to work with and for most people it’s just better to stay away from it all together. As I mentioned before, since people usually associate mlm with a pyramid scheme, I’ve seen countless amounts of alternative terms that company’s use to describe its business structure such as a consumer direct marketing company or a cooperative marketing company. Not only that, but a lot of people resort to misleading its opportunity by presenting it as a high paying job offer as a way to recruit potential candidates.
My personal advice for anyone who is even thinking of getting involved with a network marketing company is to not go into it emotionally or with money as the prime factor in signing up. If someone told me that investing in a certain business will guarantee that I would make a six figure income in a month with absolutely no risk, I would then be walking the other way. I would treat a network marketing opportunity no different as every type of legitimate business requires risk and persistent. You do not start a business unless the products or services sound viable to you and will provide you with confidence to promote it. There are many resources out there on how to distinguish a legitimate opportunity from a scam and the more educated you are about the topic the more prepared you will be in analyzing an opportunity. Base your decisions rationally rather than emotionally to put yourself in the best position to judge an opportunity and whether or not it is right for you.
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