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  • Writer's pictureAdrian Jones. UK Home Biz

MULTI-LEVEL MARKETING-"IT'S A PYRAMID THING. RIGHT?"


a 3 tier human pyramid
A Human Pyramid

So you are thinking you need to earn some extra money. But, you don't want to get caught out doing “one of those pyramid things”.


It is completely understandable why people think multi-level marketing is a pyramid thing, whether they are totally against Multi-level marketing, they're new to the idea, or they're looking into it, people think it’s a pyramid thing.


And it can be if it’s a dodgy one!


So it's important to do your research before getting involved in any kind of Multi-level marketing business. Make sure you know how it works and who is involved in it. Be aware of any red flags, like promises of high profits with little to no effort. Ultimately, you should trust your gut and always remember that if it sounds too good to be true, it probably is.


But truthfully, Multi-Level Marketing is far from a pyramid scheme. It is a legitimate business model that involves the direct selling of products and/or services to the public, this is also called "network marketing," as well as earning a commission from the MLM company for recruiting other people to sell the same products and/or services. It is an efficient way to reach a larger market with less effort and cost, and it can be a great way to earn some extra money.


If you are considering getting involved in Multi-Level Marketing, it’s important to do your research and make sure you fully understand the business model and the company you’re considering. There are a few key factors to look out for, such as having a good understanding of the products and services, the level of support and training available, and the level of success of other people in the company.


Multi-Level Marketing can be a great way to earn extra money and even a full-time income, so don’t let the idea of a “pyramid thing” stop you from exploring the opportunity.


What's your definition of a Pyramid scheme?

Now the majority of people will say, it's when the person at the top, makes all the money, and I will agree, because that is a pyramid thing, right, when the person at the top makes all the money, right? And the people in each row earn less than the people in the row above them.


Let's use this example. You have a job and in that job, you have a boss. Your boss has a boss and their boss has a boss. Your boss makes more money than you currently do, and their boss makes more money than your boss. Your boss's boss's boss makes more money than both of your bosses. This is because jobs are often structured in a pyramid, with each layer of the pyramid making more money than the one below it.


So, would you agree that in this example,

The person at the top makes all the money?

Wouldn’t that make it a pyramid thing?

You get the point; the majority can be a 'pyramid thing'. Think about it.



Common Organisational structure
Common Organisational Structure


While multi-level marketing is legal because a legitimate product is sold, it is also controversial. Some believe that multi-level marketing resembles illegal pyramid schemes. It should be noted that a pyramid scheme occurs when no product is sold or when the product has no market value. This is an illegal activity. In a pyramid scheme, distributors pay a fee when “recruited,” generating money for the scheme. The scheme collapses when distributors cannot recruit anyone else. Therefore, those at the top may benefit while newer distributors potentially lose out.


No matter what it is, a product that benefits the end user is always a good thing. A pyramid scheme is an unsustainable business model, meaning that it eventually fails and the people at the bottom suffer the most. Therefore, if a product is beneficial to the user, it's not a pyramid scheme and there is no need to worry.

One of the big differences between Multi-level marketing and pyramid schemes is that while pyramid schemes pay simply for recruiting, network marketing allows distributors to receive commissions based on actual sales that their recruits have made. The three largest network marketing companies in the United Kingdom are Avon, Ann Summers, and Herbalife. All of them engage in varying forms of network marketing.


Multi-Level Marketing Companies


Avon operates by having its representatives sell products direct to customers with the option of recruiting others to become representatives. Representatives make money off the sales from their customers as well as from a percentage of the sales from their recruits. There is no incentive in just recruiting, and it is not required that representatives buy products before selling them to customers. Avon products are sold directly to end customers. This firm is one of the most respected cosmetic companies in the world.


Ann Summers. There are two main ways to get an income from working as a brand representative as part of the Ann Summers party team. One is from hosting an in-person party, and the other, a new addition due to recent events, by setting up virtual parties. Conducting in-person parties involves a mix of you going to venues and private homes that Ann Summers has pre-arranged for you, as well as going out of your way to contact and book events yourself.


Herbalife, a direct seller of nutritional supplements weight-management and personal-care products, has achieved global success in marketing and distribution. Distributors can earn commissions by selling directly to consumers as well as commissions from the sales of those they recruit. While the firm has been highly successful, hedge fund manager William Ackman has accused Herbalife of being a pyramid scheme.



Critics


"Critics such as Ackman fail to understand that not everyone selling products is seeking a full-time income, but instead believes in the products, enjoys the products, and wants to share with friends and family as well as achieve their own personal goals."


Two hands one with thumbs up and one thumbs down
Critic or Fan


Multi-level marketing has also been accused of creating a pyramid scheme. This is a false accusation, as pyramid schemes are illegal and multi-level marketing is a legitimate business model.


Some people also claim that multi-level marketing is a scam and that participants are unlikely to make any profits. However, the success of multi-level marketing depends on the commitment and dedication of the distributors, and many people have found success with this business model.


Critics of multi-level marketing also point to the fact that it relies on recruiting new members to make money, rather than just selling products. While recruiting is an important part of the business model, multi-level marketing still requires distributors to sell products to earn a profit.


Overall, multi-level marketing can be a legitimate and successful business model, but potential distributors need to understand the risks and rewards before signing up.


These critics fail to understand that our entire economic system is based on people developing businesses where they receive commissions on the products that they sell. This business model is used in all industries and provides a direct incentive for hard work and effective marketing of these products.


While the industry is flexible and provides many sales and marketing resources for its distributors, it can be hard to succeed due to the need to maintain strong customer relationships, maintain a large network of prospects, and engage in recruiting. It can be especially difficult among those with limited business experience. Often those that succeed make a significant amount of income from selling products and having a large network of recruits.


Some former distributors have criticised the industry because they spent a large amount of money on internal consumption but were not able to succeed in the industry. On the other hand, many people enter the industry to purchase products and are not trying to earn a regular income. These people become distributors because they enjoy using the product, are offered discounts on purchases, and enjoy social interaction. Supporters of network marketing firms such as Avon, Amway, Herbalife, and Mary Kay point out that these firms provide a large amount of training and incentives for reaching certain goals.


Perhaps the biggest benefits for distributors are the opportunities to start their businesses and learn more about how businesses operate. Even those that do not succeed can gain personally from the experience. In general, the direct selling industry has been successful, over the last 100 years, by maintaining a reputation for selling high-quality products and providing the opportunity for millions to engage in part-time employment from their homes.


A pyramid scheme is based purely on recruitment, with no actual product or service to sell which means that the success of the scheme relies on the recruitment of more people.


Therefore, if you can identify a product that will benefit the end user, you can be sure that it is not a pyramid scheme. This means that you can rest assured that the product is legitimate and that you can trust it. Furthermore, the product will provide the user with the benefit that it promises.


So, if someone was to say to me, it's one of those pyramid things or is it one of those pyramid things you say yeah, like everything.


Everything's a pyramid hierarchy

If someone was to come to me and say it's a pyramid scheme. I would say you don't understand there's no scheme behind it because you're the end-user you are getting a benefit,


Now some of the haters out there might be like yeah but they're getting paid for doing that. Network Marketers are getting paid as well. Network marketers are getting paid based on their performance if the delivery driver doesn't turn up, they don't get paid either.


but almost everyone will say it's not for me. because they want to blame something else, the reason for them not to join is that to blame something else is easier than accepting fears of ignorance. Maybe you are anti-network marketing and you don't like Pyramid selling, if you weren't allowed to say it's one of those pyramid things what would be the reason why you're not joining, right outside of blaming on other things, is there a fear inside, is it you don't want your friends seeing you doing this, and that's fine, you would just say that instead.



But it's a fact. multi is serving and helping hundreds of millions of people financially, emotionally, and mentally, hundreds of millions all over the world. And chances are, if you speak to your friends and family, at least one of them has some form of network marketing, product, service or opportunity in that household.

www.ukhomebiz.com


uk home biz adrian jones
Adrian Jones

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