Network marketing is a legitimate business, most of the time. Just as with any business, there will be those who are corrupt and will try to pull some sort of scam. Unfortunately, the run of high profile pyramid schemes in the past few years has led some people to believe that every, or at least most direct marketing opportunities are nothing more than network marketing schemes. Nothing could be further from the truth. There are some scams out there, but there are also some very good, honest, ethical network marketing companies how there. And here is how to tell the difference.
Network marketing schemes are all about the money.
If all or most of the money you earn will come from the payments people make when you recruit them then you can pretty much count on it being a scam. That is called a pyramid scheme and it is illegal. With pyramid schemes, there is often no product. However, some scammers are getting smart and including a product in order to make the program look legitimate – but they are not and they could land you in hot water with the law.
Question to ask: Can I make a good income just selling the product, even if I never recruit a single person?
Network marketing schemes are about the opportunity and not the product.
Since a scam is focused on the money in the program, which typically is nothing more than a system of recruiting more and more people to pay to sign on to recruit more and more people, the emphasis of the pitch will be on the ‘opportunity’ or ‘system.”
Question to ask: Did they talk to me about a specific product and its benefits? Or did they talk about the program, system or opportunity?
Network marketing schemes may have products but they are overpriced, trendy or have ‘secret formulas.’
Legitimate network marketing companies will have products that are valuable to consumers. They tend to have a certain amount of longevity. Look at network marketing giants that have been around for years. Amway and Shaklee are two great examples. These companies have been around since the 1950’s which means that consumers find value in their products. Marketing schemes tend to have products that lack substance or that you can usually find for far less expensive at other places.
Question to ask: Does the network marketing program have a product that consumers will find useful or was it something overpriced, trendy or unsubstantial?
Network marketing schemes operate on emotion.
One hallmark trait of a marketing scheme is the emotional component. Recruitment meetings play on people’s fears of not having money or of losing out on a ‘good opportunity.’ They get attendees worked up with a frenzied atmosphere and usually make it seem that they have a limited time to sign on or they will lose out on the opportunity. If a company is pushing you to make a hurried decision on signing on with their program, you need to step back and take a closer look.
Question to ask: Did the program make me feel pressured to sign NOW? Did it play on my emotionsBusiness Management Articles, particularly fear?
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