|posted: 9/1/2022 at 5:39:53 PM ET|
Network marketing is usually associated with pyramid or ponzi scams. This is because the main structure of the two models can be quite similar at first glance. However, if one takes a closer look at the models, there is one big and defining difference between them. The main difference between a legal network marketing firm and a pyramid scam is that the first one offers real products and services, the latter only promises opportunities and generates money from the cost of entry of the recruited members. A pyramid scam re-channels the incoming funds from the fees that newly recruited 'members' pays for entering the scheme and does not generate any kind of profits from other endeavors. The masterminds of the scam benefits while leaving most, if not all, of the downlines in financial burdens.
o As the networks widen, so the individual leader benefits not only from their own sales but also a percentage of the sales from their network. As more people join the network, so residual income increases.
o network marketing allows its distributors not only to network outwards in order to sell the product but also to benefit from their downline's downline, either to a limited depth or ad infinitum. However, the two terms tend to be used fairly indiscriminately.
o As with any other home-based business, distributors need to work hard and have courage and determination. Finding a good sponsor is just as important as finding an interesting product and a good compensation plan which offers flexibility and just reward for effort. Contrary to expectation, the newcomer has the same potential for success as the long-term sponsor provided that the necessary research and skills training takes place.
It is not necessary to be 'in at the beginning' and in some cases it may prove more difficult and risky to join at the beginning than to join a plan which has reached a more mature phase. Network Marketing is particularly suited to married women with family commitments as it offers them an opportunity to start a business on a part time basis with very little capital. The opportunity now exists for enterprising women to use their talents and the skills gained from motherhood to build businesses based both on selling and on finding and supporting the efforts of others.