To the seasoned Network/Multi-Level Marketer this has almost become a non-question. The fielding of which has become nearly as involuntary as sneezing. The answer is almost universally “no” or “what do you mean?” The resulting explanation generally pacifies, at least temporarily those skeptics that might be examining your business. However, it seldom really addresses the core understanding of what a “Pyramid” really is.

Pyramids, according to Federal law are illegal. A true “Pyramid” is dependent on a constant influx of participants at the base in order to move others to the top. Multi-Level or Network Marketing dispels this requirement due to the fact that if a real product or service is being sold, the business will continue regardless of the influx of new participants. Additionally, “Pyramids” will require a fee, sometimes nominal and sometimes substantial, which will be paid partially to the company and partially to the recruiting agent. Most states have outlawed this practice and deemed it uniquely an act of “pyramiding”. A legitimate Network/Multi-Level Marketing company my have a startup fee, but it is usually only enough to handle administrative services and initial supplies and marketing materials.

The only real difference between Network or Multi-Level Marketing and traditional business models is the number of hands that a product or service has to pass through before it reaches the consumer. The true mark of any business, is to ask the question, “Would people own this product or service if they were not involved in the business of marketing it”? Many Network/MLM’rs become marketing distributors for no other reason than to receive a discount for their product or service.

It’s true that the earnings for being self employed are unpredictable, but the advantage of being self-employed in a Network/Multi-Level marketing business is that you can out earn your “sponsor” or the person that hired and trained you. What would happen in a traditional J-O-B if you started outperforming the person that trained you or even worse your supervisor? In Network/Multi-Level Marketing there are no buffers, either on the top or the bottom. Success and failure are an act of your own efforts.

To most Network/Multi-Level Marketers, anyone that works a traditional J-O-B is involved in a “Pyramid”. You go to work for a company at an entry level. There are lots of you at that level. In order to oversee things there are a few supervisors. These supervisors are usually amenable to department heads, who in turn usually answer to any one of a number of upper management administrators. Upper management usually has a CEO or owner that is ultimately at the top of the…oh wait…isn’t this one of those “Pyramid things?”

Gary Russell
GoSmallBiz.com
www.GaryLRussell.com
www.DefendMyLife.com
503-519-3592

The first time I saw what I refer to as the “Magic Circles”, was in 1977 in the meeting room of a local small town restaurant with one of the superstars of the World Wide Dream Builders.  While I was intrigued with the concept, it was several years until I decided to join this company and try my hand at starting my own home-based business.  Subsequently, I would drop out and restart this process with the same company a total of three times, in addition to the other companies that I attempted to work with.

I became intrigued with the various manifestations of Multi-Level Marketing, including a very enthusiastic albeit short-lived endeavor in the “binary system” with the now defunct Jewelway International.  I had become a frustrated proponent of MLM businesses.  I believed it was a great method for moving product in the market place, but I also quickly learned that there were many things about being self-employed that I was not yet prepared for. We are rewarded in life in direct proportion to our ability to overcome obstacles.  The bigger the obstacle, the greater the reward.

The first advantage of MLM businesses that we want to discuss is the relatively low startup cost.  This is both one of it’s greatest merits as well as one of it’s greatest pitfalls.  All that is really necessary to start a profitable turn-key business is a nominal financial investment, a consuming desire to succeed, the ability to follow an established system that others have perfected through trial and error, and most importantly the willingness to learn new attitudes and methods and give up old attitudes and methods that to date have not produced the desired success.

The low start up cost allows people to treat their new business as a hobby or novelty magic set instead of a business.  In my estimation, MLM businesses allow people the opportunity to put up or shut up.  Rather than sitting back and criticizing how a business is run, the new entrepreneur has the opportunity to put their business acumen to the test.  As a tradition, MLM’s have a 90% failure rate primarily because people are not willing to change their failed plans and exchange them for methods of proven success.

Humans are the most adaptable creatures on the earth, and entrepreneurs are the most adaptable humans.  Successful entrepreneurs are those people that are willing to do what unsuccessful people are unwilling to do.  The low start up cost is a great tool to evaluate if you have the skills necessary to succeed, and if not, what must you do to gain those skills.  The average millionaire in America fails in ten businesses, so if you’ve flopped, as I have in one or two businesses, or perhaps just felt that you were not being justly compensated for your efforts and decided to hang that business up, join the ranks of the success pursuers.  If you believe in the industry, adjust your methods, find a great company to work with, and engage the learning process.