Is Network Marketing Just a Scam?

This article is relevant today especially with the advent of all the Business Opportunities being touted online. This is information that you need to know when evaluating that opportunity. To find out more about a solid business opportunity go HERE -

This Article originally 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.

Homework

More people leave the office grind behind to work at home.
Whether downsized, outsourced, or sick and tired of cubicle hell, more people are earning their living by working at home. The work at home industry is booming with a diverse lot of income earning opportunities. People of all skill and education levels can find a niche in this market.

Telecommuters

Technology has enabled former office rats to do their work at home. Armed with a computer, fax, and telephone, employees from back office data entry to management staff are able to perform part or all of their jobs at home. The telecommuting option is appreciated by workers as it allows them more freedom and control over the work day and more time to spend with families. Companies find that this set up often improves employee morale and productivity.

Net Work

Earning money via the Internet has become an increasingly popular option in the work at home industry. Chances are you know someone who sells merchandise on eBay. Many online merchants are working out of their homes. The Internet offers a wealth of opportunities for writers to earn a living at the keyboard. People with an Internet-based career often start on a part-time basis while working their regular office gig. Once their "web job" takes off, they escape the office grind for full-time work at home.

Home Base

Another option in the work at home industry is a home-based business where you go out in the field to provide services for customers. This is a wide open opportunity - think of any product or service that people need and, viola, you have a business. The senior population is exploding. Start an elder service that helps seniors with light housekeeping, grooming, and transportation. Two career families and busy folks in general equal a business for you running errands such as shopping, chauffeuring kids, and picking up dry cleaning.

You can strike out on your own with these home-based businesses or buy a franchise. Franchises offer a brand name people know and trust along with marketing support from the headquarters office. Start up costs can be out of reach for a lot of people, however, there are hundreds of franchise options in the work at home industry that will fit with small budgets.

Scam Alert

The Internet and print and broadcast media are full of ads for great-sounding work at home opportunities. Sadly, the work at home industry is full of scam companies that advertise high income home-based jobs. Some ads are specific while others are vague and keep you in the dark about the exact nature of the pie in the sky venture.

Remember, if it sounds too good to be true, it probably is. Do your research before you plunge into any work at home opportunity. Talk with others who are working at home. Check out franchises or Internet opportunities with the Better Business Bureau. Despite the scam artists, there are thousands of options in the work at home industry and one of them will suit you.
Sources
funcareers, (funcareers.com)

To Great Success,
Joseph Demasi