Pyramid Is Not A Four Letter Word

So today we are going to talk about pyramids. When some (maybe even many) people think of a multi-level marketing, MLM, they think of the pyramid business model, which tends to immediately lead to the words "scheme" or "scam". Go ahead, tell someone you are involved in MLM...lead with that, and some people get a look that one could expect if you had said "Hi! I club baby seals for a living! You wouldn't believe how much money you can make off those lil suckers!"

I touched on this subject in a rant on my personal blog (http://minivancrusader.blogspot.com/2011/05/prove-them-wrong.html) and that spurred me to a more in depth down and dirty analysis of MLM and pyramid schemes...and I'm going to throw in Ponzi's for good measure, because, frankly, I wasn't sure what the difference was initially.

First of all, Id like to address the general idea of all pyramid business models being a "scam" or "scheme". Basically, you could say that any business, legitimate or otherwise, where those involved in the business are compensated for not only product or service sales but for recruiting a downline, which in turn does the same. I actually had someone tell me that pyramid businesses were all scams because the people at the top were making all the money. Seriously? Look at your own job. Who makes the most money? You, or your boss, or your bosses boss? In most jobs, you work for two reason: to make money, and (for some) move up the ranks to make more money. Some people are happy at the bottom, or don't work hard enough, or are in a job that is unsuited to them for whatever reason, and they don't progress to "the top". Others march up the ladder, and end up as our presidents and CEOs, etc. Ladders are OK, but not pyramids? There is no business in the world where 100% are successful. There will always be more people at the bottom making less than those few at the top. This makes a pyramid. Always. Period. Amen.

This being said, even if we kept to a more narrow view of a pyramid, defining it as actual multi level network marketing, you could still easily argue that this is a valid and lucrative way to do business. Even Donald Trump started his own network marketing business, The Trump Network, and high end jewelry designers, such as Jude Francis, are jumping on the bandwagon as well, creating jewelry lines to be sold by direct sales company BambooPink. As the economy flounders, MLM is becoming more and more accepted as a tried and true business model.

So what differentiates MLM from pyramid and ponzi schemes? It's actually pretty simple.

MLM, or network marketing, offers an actual product or service. It is essentially a sales job, where you are paid for selling product and training others. That to me is one of the great things about Arbonne..I was not left to build my business alone, I have received a lot of help. A lot. And still do!

A pyramid scheme is a bit more shady. No actual goods or services exchange hands, and all members are aware of the fact that their only income will come from the recruitment of others. One easy to understand example are those chain letters, where you send in $1, send the letter to 100 friends, who all send a $1, then they send the letter, etc. These exist in varying degrees of complexity, but all rely on recruitment as the sole source of income, and all are illegal in the US.

(Thanks to Tim Sales for the pyramids in his article http://www.firstclassmlmtools.com/MLMSuccessTips/index.php/2007/06/so-your-prospect-thinks-mlm-is-a-pyramid/)

A ponzi scheme differs from the above in the the participants are likely to not realize they are involved in a scam. They are offered an investment opportunity promising huge dividends by the original scammer. They sign up, then sign on others to share the wealth. They are often paid some dividends initially to lend credibility to the scam. Because the scam relies entirely on the initial investments made by new recruits, ponzi schemes collapse when recruit numbers dwindle or large numbers ask to cash out. This is the point where an empty bank account is found because the original scammer dished it all out while living well on proceeds or took the money and ran. This is fraud, and obviously illegal as well.

Hopefully this clears up some confusion about MLM. The fact is, there are a lot of good companies out there that use this business model. If you are unhappy where you are at with your job and in a place where you would like to start your own business but start up is a concern, MLM could very well be for you. The trick is finding a good fit. I, of course, adore Arbonne's products, so for me, that was a good fit. I knew and loved the products, I respect what the company is trying to do with their product line and their biofriendly goals, and I knew and trusted the person whom I knew would be my direct upline, so I didn't feel as though I would be attempting to do something so lofty alone. I have yet to regret my decision!

If you think Arbonne might be a good fit for you, and want to know more, feel free to contact me
CarliClark@myarbonne.com
or visit my site
www.sensationalskincare.myarbonne.com

-Carli

www.sensationalskincare.myarbonne.com