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Main › Business & Services › MLM & Network Marketing
 

Network Marketing and Pyramid Schemes - An Explanation

 
Author: Ian Durrell

In the UK Kleeneze was one of the founder members of the DSA that regulates all direct sales organisations.

Pyramid Selling

1. Principal income comes from from recruiting. Income from retailing is incidental or spurious.

2. Distributor is locked into a position in the Pyramid. Usually they cant pass their sponsor.

3. People at the top make the real money until the Pyramid collapses. A Ground floor opportunity really means a downhill opportunity everyone who joins has less opportunity than the person who recruited them.

4. Income from products is based on discounting on a sliding scale. In reality, this means that prices get higher and higher until impossible to sell.

5. Products are not important. They may or may not work well. In reality, this acts as bait for the recruiting hook. Usually there are no guarantees, products are non-returnable, no investment refunds. In fact there may not even be a real product.

6. There is real financial risk here, especially for those at lower levels, as non- returnable products become harder to sell to your downline or at the retail level to customers.

7. Main appeal is for selfishness, greed, envy and laziness.

Multi-Level Marketing (Kleeneze UK)

1. All income is earned from the retailing of products. No income is made from recruiting.

2. Distributors are not locked into organisational structure. They can pass their sponsor and upline distributors based on personal achievement.

3. Anyone can earn top money based on personal achievement, not their position in the organisation. The business opportunity improves with time and exposure. Based on sharing an opportunity for genuine financial independence through co-operation and teamwork.

4. All income is derived from product sale commissions and bonuses according to personal effort. In the best MLM plans, all distributors buy products at the same price. Performance bonuses reward higher achievement.

5. Products are all important because repeat sales are the key to success. Products are guaranteed to perform and satisfy or money is refunded. The distributors stock can be returned for a refund in most companies.

6. No financial risk. No money is paid for recruiting and the products are returnable for a full refund.

7. Appeal is to nobler attributes sharing, helping are among the better aspects of MLM companies. Top achievers typically help others and rewards follow naturally.

Author Bio:
Ian Durrell is a popular columnist. Ian likes to pen down articles about this area.
You can search for this article using: Network Marketing and Pyramid Schemes - An Explanation, Business & Services
 
 
 

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