I recently crossed upon a wonderful 5 minute YouTube video created by Mr. Pat Petrini debunking the thought that all MLM or network marketing opportunities are Pyramid Schemes. With all the news surrounding network marketing companies being investigated for allegedly using an illegal marketing pyramid scheme, it is often hard to dispel the negative imprint it has left on people.
Sadly, bad news travels faster than good news. And much of the positive news about the opportunities presented by network marketing businesses is overtaken by the few bad ones that manage to get their way at the headlines. Add to these the numerous so-called “experts” who mistakenly conclude that all network marketing opportunities are Pyramids.
Just because it’s a triangle doesn’t mean that it’s a Pyramid
One good argument that the cartoon very nicely points out is that if you look at the structure of a Pyramid Scheme and any company’s organizational chart is that they’re all basically shaped like triangles. You start out with the president at the top and ends at the base which is composed of entry level workers. Just because the president is making more than a janitor doesn’t mean that they’re operating a Pyramid Scheme.
Every business has its own rotten egg and the Network Marketing business has its own share too. But to conclude that everybody in the MLM business is operating a Pyramid Scheme is another thing altogether. What is a Pyramid Scheme? A Pyramid Scheme could be defined as one which focuses on recruiting without selling any legitimate product. This is when people earn a commission by recruiting or creating a downline without ever selling a product.
If you’re living under a rock then you’ve never probably heard about companies like AVON or Tupperware. These are legitimate network marketing companies but you wouldn’t be calling them Pyramid Schemes, would you?
Here’s Mr. Pat Petrini’s video about Pyramid Schemes as seen on YouTube.