Network Marketing--Part 1
This subject opens a 30-lb. frozen-fruit can of worms. So have I lost my mind by writing about it? You decide. (I’m tentatively answering the question in the affirmative.)
People who become part of Network Marketing also often inadvertently join the NFL Club (No Friends Left). A visceral revulsion is the fairly common response of people who encounter a network marketer, especially among people who pride themselves in being hard, honest workers who do not have an unhealthy fixation on money. In polite company, this distaste is often somewhat concealed, but it’s there. How do I know? Because I’ve been there.
I’m proceeding from the assumption that good information is better than bad information or no information. By good information I mean information that matches reality. So what is the reality?
First, the nitty-gritty facts. Network Marketing is sometimes called Multi-Level Marketing (MLM). Although some people feel that the term Network Marketing is less offensive than MLM, they basically are equivalent and accurate terms. They are emphasizing different aspects of the same business model. This model is based on person-to-person direct selling (the network), and the direct-sellers can rise through various levels of achievement, responsibility, and income (This is the multi-level aspect.). Sales incentives and bonuses may also be part of the compensation plan.
Next, the illegal stuff. Network Marketing is also sometimes referred to as a Pyramid Scheme. Pyramid Schemes are illegal. They are like chain letters that promise that if you put in money, a lot of other people will put in money, and you’ll more than get your money back from the poor suckers that happen to be further down the line than you in the food chain. The difference is that in a Pyramid Scheme, no product changes hands (or a useless product is used as a smokescreen just to make the real activity look legal). Network Marketing or MLM models can be done in an ethically problematic way, but if they offer a legitimate product, they are not illegal. Pyramid Schemes are always illegal.
With the nitty-gritty facts and the illegal stuff covered, what’s left? Why do a few people get so obscenely rich doing Network Marketing? And why do most people hardly make any money at all? Aren’t the products often ridiculously overpriced? What’s with the cult-like hype and high-drama meetings that are often involved? How can friendships survive Network Marketing? Even though Network Marketing is legal, isn’t it at least faintly unethical? Here’s where the rubber meets the road.
People who become part of Network Marketing also often inadvertently join the NFL Club (No Friends Left). A visceral revulsion is the fairly common response of people who encounter a network marketer, especially among people who pride themselves in being hard, honest workers who do not have an unhealthy fixation on money. In polite company, this distaste is often somewhat concealed, but it’s there. How do I know? Because I’ve been there.
I’m proceeding from the assumption that good information is better than bad information or no information. By good information I mean information that matches reality. So what is the reality?
First, the nitty-gritty facts. Network Marketing is sometimes called Multi-Level Marketing (MLM). Although some people feel that the term Network Marketing is less offensive than MLM, they basically are equivalent and accurate terms. They are emphasizing different aspects of the same business model. This model is based on person-to-person direct selling (the network), and the direct-sellers can rise through various levels of achievement, responsibility, and income (This is the multi-level aspect.). Sales incentives and bonuses may also be part of the compensation plan.
Next, the illegal stuff. Network Marketing is also sometimes referred to as a Pyramid Scheme. Pyramid Schemes are illegal. They are like chain letters that promise that if you put in money, a lot of other people will put in money, and you’ll more than get your money back from the poor suckers that happen to be further down the line than you in the food chain. The difference is that in a Pyramid Scheme, no product changes hands (or a useless product is used as a smokescreen just to make the real activity look legal). Network Marketing or MLM models can be done in an ethically problematic way, but if they offer a legitimate product, they are not illegal. Pyramid Schemes are always illegal.
With the nitty-gritty facts and the illegal stuff covered, what’s left? Why do a few people get so obscenely rich doing Network Marketing? And why do most people hardly make any money at all? Aren’t the products often ridiculously overpriced? What’s with the cult-like hype and high-drama meetings that are often involved? How can friendships survive Network Marketing? Even though Network Marketing is legal, isn’t it at least faintly unethical? Here’s where the rubber meets the road.
posted by Mrs. I at
6:21 PM
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