Tag Archives: direct sales

Is This a “Pyramid”?

What do people even mean when they ask that question?  Do they even know what they mean?  It’s seems to always be asked in reference to network marketing (aka direct sales) companies.  Personally, I think…

Network marketing gets a bad wrap

I’d honestly not given much thought or consideration to this question until recently – despite the fact that I’ve been involved in four network marketing companies (one currently, as a part of my overall wealth-building strategy) over the course of my adult life.  Just in the past few weeks, however, I’ve had two different people call my and my company’s integrity into question due to its utilization network marketing and my affiliation with it.  One… an 18 year old.  Another, surprisingly about 50ish.  So, I set off on some research of my own, and discovered some things.

  1. A “pyramid” is, in architecture, considered to be a very strong shape. (Think about the Egyptian pyramids, for instance.)
  2. Pretty much every company or business under the sun (unless it’s a single-owner, single-operator business) has a hierarchical structure of a “pyramid”. There’s a person at the top:  usually a CEO type.  Beneath that person are other supervisors, a Board of Directors, or other “management”.  Beneath those people are even more department managers.  Beneath those people are an even greater number of people who serve various functions.  And, the list goes on and on.  You get the idea.)
  3. Some of the most successful and notable business people on the planet find network marketing (aka direct sales) companies to be the best business model of this century for ambitious people, because, in a traditional model, you’ll never be able to earn more than the person “above” you, but in network marketing, you can – and plenty do.  (Disclaimer:  Some make no money, due to the fact that your income is a reflection of your personal efforts, business growth, leadership capabilities, and other factors.)
  4. Those same successful and wealthy business people find network marketing companies to be some of the best investment opportunities around. Why?  Because they’re very lean when it comes to expenses that usually wreak havoc in traditional businesses, like:  advertising expense, benefits, etc.
  5. Network marketing (via the independent contractor and home-business status) afford individuals the opportunity to create their own business for very little capital investment and then qualify for legitimate tax deductions they’d never otherwise be able to take advantage of.

So why are people so cynical about network marketing?

If I had to guess, I’d say it goes back to the beginning of the industry, as a whole.  I can see it this way, anyhow.

Shane Rudman, Network Marketing Icon
Shane Rudman

A very successful network marketing mentor that I once had the honor and privilege of working with once told me,  

As with many things, it’s common that the greatest asset can also be the weakest leak if not properly cared for and tended to.

What did he mean?  Well, in network marketing, people are the greatest asset – for sales and company prosperity and distribution.  Therefore, people can also be the weakest link —  and not even mean to be.  How?

As with any new venture, people are often very excited – as well they should be!  When we were kids, we had many dreams.  With age, society and those closest to us douse our dreams.  Not intentionally, per se, but nonetheless.  This means, when people are actually provided an outlet to dream again and find themselves in the company of others who are also once again seeing the possibilities of their dreams, a certain energy and synergy takes over and begins to grow.  This makes new people want to tell everybody “everything”.  Often the challenge is in the fact that they barely understand it themselves!  Inadvertantly, friends and family get bombarded, people who might otherwise be interested in the same business opportunity get misinformation, and, in general, I think people feel “duped”… and nobody likes feeling “duped”.  So, the nay-saying and network marketing-bashing ensues.  At least that’s what I think has happened – and, to some degree, continues to happen.

I also feel it’s quite plausible that those who are unsuccessful in network marketing leave their company, then go tell everybody they know what a “scam” it is… instead of accepting their own responsibility in that failure.  The fact of the matter is, in my experience, if you do your due diligence in aligning yourself with a solid business that’s transparent, it’s rarely the company or the company’s products that are the source of the person’s lack of success; it’s most often the lack of action, implementation, or tenacity on the part of the individual.  Now, before you get your drawers all in a bunch over that statement, let me also say that I’m in no way saying some people don’t suffer a lack of training or poor leadership or any of those sorts of things.  I’ve had the distinguished blessing to experience it all – good and bad.

I can honestly say that I really have nothing negative to say about the other network marketing companies I was involved in prior to my current alignment (a wealth-building vehicle and strategy, bear in mind).  And, in each of them… there are, were, and have been very successful individuals.  Perhaps, as I feel was the case with me, you simply have to find the right company for you and be willing to commit, allowing yourself to develop into the person you must become (mentally and academically) to achieve the level of success you seek.  It seems few people these days are willing to accept personal responsibility for who they are, where they are, the fact that they are who and where they are as a result of their own choices and decisions over time, etc.

Now, combine that scenario with the fact that there are obviously a lot of people who are ignorant about what a “pyramid scheme” actually is – or the fact that a true “pyramid scheme” is illegal… or the fact that there’s actually a regulatory agency (in the US anyway – Direct Sales Association) to monitor the companies who are its members – and you have people who (too young to even remember the birth of network marketing or “pyramid schemes”, as well as more than old enough that they could’ve educated themselves on the topic had they chosen to) simply walk around applying stereotypes and ignorant labels to everything they neither understand nor take the time to learn more about.

That said, I’ll be the first to tell you:  Network marketing is not the best business model for every person on the planet.  In fact, the video below by Robert Kiyosaki (a huge supporter of network marketing) leads one to believe there are far more people who it’s not for than those who it is.  Why?

Because you have to want to WIN to be successful in network marketing, and even though nearly everybody says they do, few will raise their hand, put their money-where-their-mouth-is and do what it takes to be successful… for a variety of reasons.

It would stand to reason, however, if successful business people and investors like Robert Kiyosaki, Warren Buffet, Bill Gates, and scores of others – with their vast knowledge base in business, people, and great achievements – are in support of network marketing, the least the rest of us could do is educate ourselves and stop “bashing” out of ignorance.

Your partner in success,

Crystal Schwindt

www.crystalschwindt.com