Is Network Marketing Just a Scam?

This article is more relevant today that when it was written especially since the advent of all those so called opportunities popping up online everyday. This is valuable information that you need to make an informed decision about that opportunity. For information on what to look for in a network marketing company see Mastering Your Primary

This article appeared at entrepreneur.com on Dec 25, 2000

There's a huge difference between network marketing and pyramid schemes. Learn the truth here.
By Michael L. Sheffield
December 25, 2000


Marketplace
Q: Some friends continue to try to recruit me into network marketing deals that seem like some type of money game or pyramid. Other friends tell me they're illegal and I'll get into trouble. How do I know what's legal and legitimate?

A: To help you understand what network marketing is, I must first explain what it isn't. First, network marketing isn't a pyramid scheme. Pyramids are programs similar to chain letters where people just invest money based on the promise that other people will put in money that will filtrate back to them and somehow, they'll get rich. A pyramid is strictly a money game and has no basis in real commerce. Normally, there's no product involved at all, just money changing hands. Modern-day pyramids may have a product, but it's clearly there just to disguise the money game.

Network marketing is a legitimate business. First, it's based on providing people with real, legitimate products they need and want at a fair price. While some people do make a lot of money through network marketing, their financial benefit is always the result of their own dedicated efforts in building an organization that sells real products and services.

Pyramids are illegal and are based on taking advantage of people. For a person to actually make money in a pyramid scheme, someone else has to lose money. But in network marketing, each person can multiply his or her efforts, skills and talents by helping others be successful. Network marketing has proved itself as part of the new economy and a preferred way to do business here and around the world.

Network marketing isn't about taking advantage of your friends and relatives. Only a few years ago, network marketing meant retailing to, and sponsoring people from, your "warm list" of prospects. Although sharing the products or services and the opportunity with people you know is still the basic foundation of the business, today we see more people using sophisticated marketing techniques such as the Internet, conference calling and other long-distance sponsoring techniques to extend their network across the country.

Network marketing isn't a get-rich-quick scheme. Of course some people do make large amounts of money very quickly. Many would say those people are lucky. But success in networking isn't based on luck. (Unfortunately, money won't sprout wings and fly into your bank account no matter what someone has promised you.) Success in network marketing is based on following some very basic yet dynamic principles.

Now let's discuss what network marketing is. Network marketing is a serious business for serious people. It's a proven system where the design, creation and expense the corporate team has gone through becomes a road map for your own success. Just follow the simple, proven and duplicable system that the good companies provide.

The real key is this: Network marketing is all about leverage. You can leverage your time and increase the number of hours of work effort on which you can be paid by sponsoring other people and earning a small income on their efforts. J. Paul Getty, who created one of the world's greatest fortunes, said "I would rather make 1 percent on the efforts of 100 people than 100 percent on my own efforts." This very basic concept is the cornerstone of network marketing.
For example, most successful people building a network marketing business do so in an organized method. They work a few dedicated hours each week, with each hour of effort serving as a building block for their long-term business growth. Then they sponsor other people and teach those people how to sell the company product and sponsor others who duplicate the process.

By helping the people you personally sponsor to sponsor others, you duplicate yourself. As this process continues, you create compound growth that can lead to hundreds or even thousands of people coming into your business. You leverage your time by helping others be successful and earn an income from all their efforts.

With network marketing, there are no big capital requirements, no geographical limitations, no minimum quotas required and no special education or skills needed. Network marketing is a low-overhead, homebased business that can actually offer many of the tax advantages associated with owning your own business. Network marketing is a people-to-people business that can significantly expand your circle of friends. It's a business that enables you to travel and have fun as well as enjoy the lifestyle that extra income can provide.

LearnMoreRead On The Level for more information on how to investigate a multilevel marketing opportunity.

Michael L. Sheffield is the founder of Sheffield Resource Network, a full-service multilevel marketing consulting firm in Tempe, Arizona. He is also the co-founder and chair of the Multi Level Marketing International Association (MLMIA), whose members represent companies throughout the world.

Network Marketing for the New Generation

Network marketing has always been a great way to get the word out about any business. No matter if you are selling a product or a service, with network marketing you can increase your sales in no time at all. And in today’s day and age, network marketing is more effective than ever before. In the past network marketing was a great way to make contacts as well as sales, but this has grown more than anybody could have expected. If you do not take advantage of network marketing, you will never reach your fullest potential.

If you do not know what network marketing is there is no reason to give up. The fact of the matter is that network marketing is quite easy to understand; it is exactly what it sounds like. With network marketing you get your name out there by talking with other people, and making industry contacts. The more people that you know, the better chance you have of making sales. And remember, the contacts that you make have contacts of their own. So in time word begins to spread about your offerings.

Network marketing is all about getting in touch with the people that can help you out the most. Of course your number one target should be people in your direct industry. In other words, people that would be interested in buying your product are people that you should network with.

The best way to get started in network marketing is by making yourself accessible to a large amount of people. Believe it or not, social networking sites such as Myspace have become quite popular for individuals and businesses alike. With these services you can introduce yourself to millions of people without ever having to do too much work. And of course with each person that you meet, you have added another person to your network.

The good thing about network marketing is that you may not make a sale today from somebody that you meet. But down the line that same person may be looking for a product or service and remember the conversation that they had with you. But none of this is possible unless you get the word out, and are not afraid to network in an aggressive manner.

If you want to make big profits, network marketing can help to put you on the right track. For many years businesses have been using network marketing as a way to reach the next level, and today this still holds true.

Generally speaking, network marketing does not cost a thing. All you have to do is find people to network with and get started. It does not get much easier, and cost efficient than that.

Something to think about!

To Great Success,
Joseph Demasi