Network Marketing (MLM) vs Pyramid
Here are the main differences between Network Marketing and (illegal) pyramid selling. Kleeneze are also a founder member of the Direct Selling Association - www.dsa.org.uk .
Pyramid Selling
1. Principal income from recruiting. Income from retailing is incidental or spurious.
2. Distributor locked into position in Pyramid. Can’t pass sponsor.
3. People at top make the real money — until the Pyramid collapses. “Ground floor” opportunity really means “downhill” opportunity… everyone who joins has less opportunity than the person who recruited them.
4. Income from products based on discounting on a sliding scale.* In reality, means that prices get higher and higher until impossible to sell.
5. Product not important. May or may not work well. In reality, acts as ‘bait’ for recruiting ‘hook’. Usually no guarantee, non-returnable, no refunds.May not even be a real product.
6. Real financial risk, especially for those at lower levels, as non- returnable products become harder to sell downline or at retail.
7. Main appeal is to selfishness, greed, envy and laziness.
Network Marketing
1. All income earned from retailing of products. No income simply for recruiting.
2. Not locked into organisational structure. Can pass sponsor and upline distributors based on personal achievement.
3. Anyone can earn top money — based on personal achievement, not position in organisation. Business opportunity improves with time and exposure. Based on sharing an opportunity for genuine financial independence through co-operation.
4. All income derived from product sales through commissions and bonuses according to personal effort. In the best MLM plans, all distributors buy at the same price. Performance bonuses reward higher achievement.
5. Products are all important because repeat sales is key to success. Products guaranteed to perform, satisfy or money refunded. distributor stock can be returned for refund in most companies.
6. No financial risk. No money paid for recruiting, products are returnable for refund.
7. Appeal is to nobler attributes — sharing, helping are among better aspects of MLM companies. Top achievers typically help others and rewards follow naturally.
Pyramid Selling
1. Principal income from recruiting. Income from retailing is incidental or spurious.
2. Distributor locked into position in Pyramid. Can’t pass sponsor.
3. People at top make the real money — until the Pyramid collapses. “Ground floor” opportunity really means “downhill” opportunity… everyone who joins has less opportunity than the person who recruited them.
4. Income from products based on discounting on a sliding scale.* In reality, means that prices get higher and higher until impossible to sell.
5. Product not important. May or may not work well. In reality, acts as ‘bait’ for recruiting ‘hook’. Usually no guarantee, non-returnable, no refunds.May not even be a real product.
6. Real financial risk, especially for those at lower levels, as non- returnable products become harder to sell downline or at retail.
7. Main appeal is to selfishness, greed, envy and laziness.
Network Marketing
1. All income earned from retailing of products. No income simply for recruiting.
2. Not locked into organisational structure. Can pass sponsor and upline distributors based on personal achievement.
3. Anyone can earn top money — based on personal achievement, not position in organisation. Business opportunity improves with time and exposure. Based on sharing an opportunity for genuine financial independence through co-operation.
4. All income derived from product sales through commissions and bonuses according to personal effort. In the best MLM plans, all distributors buy at the same price. Performance bonuses reward higher achievement.
5. Products are all important because repeat sales is key to success. Products guaranteed to perform, satisfy or money refunded. distributor stock can be returned for refund in most companies.
6. No financial risk. No money paid for recruiting, products are returnable for refund.
7. Appeal is to nobler attributes — sharing, helping are among better aspects of MLM companies. Top achievers typically help others and rewards follow naturally.
