Pyramid Promoting vs Network Marketing
De BISAWiki
From time to time when attempting to reveal Network marketing (or Network marketing) to a probable recruit you will listen to the words and phrases "ah but is not that pyramid promoting?
Some individuals confuse Pyramid Offering with Network marketing because of the framework of the payment approach with its a variety of levels, tiers or positions while in the organisation. Before I test & describe why this confusion occurs lets first discuss what exactly Pyramid Promoting is (or was, since it's been illegal for many years).
A typical Pyramid Offering scheme would work like this; at the top on the pyramid would be the founder or founders on the organisation who would have a product that they wanted to get to market (or that's what they would tell recruits) so they recruited other folks to sell the products. These new recruits would be required to buy a certain amount of product at a "wholesale price", its more than likely that the price would be determined by how much product they bought, therefore encouraging recruits to buy lots of product to get it cheaper. There would be a "retail price" for the product which was the price for the general public, however recruits would be encouraged, often through incentives, to recruit others & get them to buy product at the "wholesale price" plus a mark-up, these 2nd tier recruits would be encouraged to do the same i.e. recruit more people & get them to buy product at a further mark- up. This method would be duplicated, creating many concentrations or tiers.
The major flaw in this type of organisation was that most from the product was bought by recruits & not customers & if a recruit was on a low tier they would be buying product at a wholesale price that was greater than the retail price, meaning that the only way they could get rid of product would be to try & get more recruits to buy from them. This is why lots of people ended up with garages full of product that they couldn't get rid of. The only folks who benefitted from this type of scheme were the founders of your organisation & possibly the top couple of tiers of recruits. As this system was mainly focused on recruiting reps & not customers, plus the way it was inherently unfair on most reps it was made illegal in most countries.
So why do people still confuse this illegal system with Network marketing? It's as a result of the layers or tiers of reps or recruits that may spark a long distant memory on the bad publicity that surrounded Pyramid Offering. When these companies many years ago held recruitment events they would draw out the composition of the organisation in a Pyramid Shape showing the different concentrations or tiers that recruits would be placed upon depending, often on how much product they bought or how many individuals they had recruited. If you see someone explaining a Multi level marketing business framework today you might still see that it has degrees or tiers within the shape of a Pyramid & so this is where sometimes - I have to say not very often - someone will confuse it with the old illegal Pyramid Providing. One thing to bear in mind is that if you draw out the composition of any company you might find it's within the shape of a Pyramid!
Mlm today is a much respected form of direct marketing & has worldwide sales of $167 Billion, a far cry from the old days of Pyramid Offering. Exponents of Community Marking include Robert Kiyosaki, Donald Trump, Bill Gates, and Warren Buffet. Indeed Bill Gates is quoted as saying "If I would be given a chance to start all over again, I would choose Community Advertising.
If as a new recruit to Multi level marketing you come across the "Pyramid Selling" question, you should handle it like this; first of all ask the person what they mean by pyramid advertising, if they clarify it like the illegal method above, simply say - I can understand why you might think that, however, no it's not like that at all, as that is illegal & you know I wouldn't be involved in anything illegal. If they describe it as the legitimate Multilevel marketing way of marketing and advertising then simply agree with them & say yes that's correct only it's not called Pyramid Advertising anymore as that name was associated with an illegal form of offering.
Gym Vest
