If you have been in network marketing for any length of time or perhaps you have only just got started. You may have or may experience what it is like when someone says to you ‘Is this one of those Pyramid Schemes?’ There is no doubting that this can be one of those make or break situations if you are not prepared. And it is important that you too understand what is or isn’t a pyramid schemes so that you can handle yourself in these situations.
But what I also want to cover today, is how to avoid these situations entirely. You see experienced network marketers hardly ever get asked this question and that is because they conduct themselves in a different way. It doesn’t mean they will never experience it again, but if they do, they will know just what to say.
But first let’s think about why networking marketing and MLM companies often get confused with highly illegal and unethical pyramid schemes. It also doesn’t help that popular culture and the mass media often depicts the network marketing industry in a seemingly unattractive, stupid past-time for people who think they are the next Donald Trump.
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Let’s look at some of the distinct differences.
I hope the table above gives some general signs of what to look out for. This is not an exclusive list and obviously in a fast based, digital online world, it is important that whenever we look to join any opportunity we take time to look at the opportunity in great detail. Pyramid Schemes pop up all over the place all the time, and whilst they are usually ratted out within the first 12 months of existence, they are undoubtedly going to get more and more sophisticated.
Anyway…back to the point of this post.
What should we do when we are hear those fateful words ‘is it one of those Pyramid Schemes?.’…
You can respond by asking them a question in return:
a.) What do you mean exactly…what is your idea of a pyramid scheme?
b) Who earns most of the money in your company?
c) What’s the shape of the organization you are in?
d.) How many people in your company can earn more than your boss/CEO?
Avoiding Pyramid Petes all together
If you ask an experienced network marketer how many times they bumped in to Pyramid Pete in the last 12 months, they would be able to count them on one hand. That isn’t because they are better than you or that they have some Pyramid Pete detector on their forehead. It’s because they are:
1.) Networking with leaders, business men and women and people already accustomed to the industry.
2.) They have a confidence and professionalism about them that attracts professionals and serious business minded people.
I am not saying you should not recruit your friends and family in the beginning, but they are the ones who are going to be the ones more likely to ask you about Pyramid Schemes so just be prepared. When you are making money and are confident in your business of course the people you want to benefit and also enjoy financial freedom are your loved ones so again, I will say it, be prepared.
I thought the best way to illustrate my point would be to share one of the best pyramid objection videos I have ever seen. It is one of my favourites and has me in stitches every time.
Leave you comments below, I would love to know how you manage pyramid scheme or any type of objections when marketing your network marketing business.
To Your Success,
Increase your sales and Increase customer retention!
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June 5th, 2012 at 4:14 am
Hi Beth,
Your chart really clarifies the huge differences between network marketing and illegal pyramid schemes. As usual it all boils down to education. The way you conduct yourself and manage your business actually repels the usual questions. The video is hilarious and makes a point for people to think and understand the differences.
I think the easiest way to spot a pyramid scheme is the fact there is no product. That is a red flag. Promising large earnings for little effort is also a good warning sign. Thanks for sharing.
Raean Lynn
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June 5th, 2012 at 10:26 am
Hi Beth, eventhough I am not in the network marketing industry I know that this is one of the most usual cofusions when it comes to network marketing. The main problem is that there are many mlm scams who promise to make you a millionare without having to work and most people have this in mind when they hear anything about MLM…
Kostas´s last [type] ..Search Engine Optimisation: Where to Start?
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bethhewitt80 Reply:
June 5th, 2012 at 8:08 pm
Yeah it is understandable that there is confusion. So we need to know our stuff
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June 6th, 2012 at 1:07 am
Hi Beth,
You have done a great job - especially with the chart - in this post!
Pyramid Schemes don’t have a product.
Also, those that like to tell you Network Marketing is only a scheme are not educated or have been burnt in the past.
I like all the answers you have given us to tell those Negative Nellies.
Thanks again,
Donna
Donna Merrill´s last [type] ..Why Is Building Relationships Super Important?
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bethhewitt80 Reply:
June 7th, 2012 at 9:41 pm
Negative Nellies…I love it!
Beth
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June 6th, 2012 at 3:00 am
Ahahah I loved that video. So true and so funny at the same time.
this is really a great post which hopefully will help anyone reading it that there is a difference between pyramid scheme and a real network marketing company. I actually have been in a really sucking pyramid scheme years ago and in a legitimate network marketing company and there should be no doubt about which one is which.
Thanks Beth for this great information that many people need to read.
Sylviane Nuccio´s last [type] ..Why Writing For Peanuts When You Could Write For Big Buck?
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bethhewitt80 Reply:
June 7th, 2012 at 9:39 pm
Sorry to hear you got caught up in a pyramid…but that you came out the other side OK
Thanks for your comment,
Beth
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June 7th, 2012 at 4:13 am
Great post, Beth! I thought that the video was hilarious! Except for the dig on Social Security, it was all pretty much on the money. I think the reason why a lot of our industry gets a bad name is some of the super-pushy people who try to guilt trip everyone around them and seem incapable of talking about anything else. This is why I think that it is also vital that those of us who are acting ethically stand up and differentiate the honest from the dishonest.
Steve Nicholas´s last [type] ..WIP and The Power of Innovation
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bethhewitt80 Reply:
June 7th, 2012 at 9:26 pm
Hey Steve,
Absolutely…living in the UK…not sure how the US Social Security set up works, but take your point. And yes…whilst it sometimes makes it harder for us to stand up for what we believe when everyone else around us including friends and family think we are nuts. We need to make a stand and show the world that there is a better way to get rewarded for our hardwork.
Thanks for your comment Steve
Beth
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June 7th, 2012 at 7:33 am
I have been fooled by these pyramid schemes before and really made an impact on me so that is why as much as possible, even if they are legit, I refrain from having contact with them
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October 21st, 2012 at 1:57 am
Beth,
this is the first time I read any of your blog post and is the first time I see a clear chart that explain or I should say, illustrate the difference of a Pyramids Scheme and MLM legit business.
I shy away from both (in a a way) for various reasons, but love to learn and so from time to time sign up by a friend request to check this and that out… Never pursued any further then attending a couple of meetings or watch presentations and so forth…No offense here ok?
To answer your questions and share with you how we would handle a situating where we are accused of running a non-legit business.. I would use a system that is as old as the Bible… answer any question with another question, it works all time and with any question no matter if if is MLM or what.
Hope it helps..
Thanks again for making thinks clear.
nickc
Nick Catricala´s last [type] ..Reaching Out…
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bethhewitt80 Reply:
October 27th, 2012 at 8:46 pm
Hi Nick,
Thanks for stopping by. No offense taken, we are all in different things. I am glad you found the description helpful.
Hope to see you stop by again sometime,
beth
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October 21st, 2012 at 7:20 pm
Beth,
I’m sure I’ve met that person in the video! I’ve not seen that before and it’s great. My wife is wondering what I’m laughing at!
Great post and well done in explaining the difference between Pyramid schemes and NM.
Mark
Mark Walsh´s last [type] ..Your Children will Make Money if Your Careful What You Say to Them
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October 22nd, 2012 at 3:22 pm
Beth thanks for this it’s a great way to show the differences between a pyramid scheme and networking marketing company. I had a good giggle at the video too but i do completely see the relevance. I too have family members who think im nuts or that im trying to sell them a pyramid scheme but its good to be prepared and help explain to them the difference. I personally think that they only think im nuts is because they dont know the difference and are not fully educated on the topics.
Some really great points and differences here.
Thanks
[Reply]
bethhewitt80 Reply:
October 27th, 2012 at 8:45 pm
Hi Stephen,
Yes, it is good to know the differences. Some people genuinely don’t have an answer for their naysayers and it always helps to be prepared.
Beth
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