Have your heard that network marketing is a pyramid scheme?

I had a customer recently criticize network marketing as a scam.  Her first point was all the pay-per-click ads she had seen on Google claiming that network marketing is a scam.  If she had clicked them or even looked at the URL she would have seen that it was actually someone selling a program like Magnetic Sponsoring that teaches network marketers how to prospect online.

Her second argument gets into the old pyramid scheme idea.  She sees network marketing as a scam where a bunch of people sit around doing nothing and collect a check every month from the efforts of the people beneath them.  That does sound like a pyramid scheme.  It is also the view some people have of any corporate structure.  I want to address that now.  First of all, real pyramid schemes are illegal because members make money only by signing people up.  That’s it.  There’s no product or any other benefit to being a member.  The last people to sign up before the scheme collapses get screwed over.  That’s not network marketing.

One way to look at network marketing is that it is a way for companies to outsource their sales force. Each company that the sales work is outsourced to has the right to sell the products and further outsource to other companies.  This lets the network marketing company to focus its efforts on product research and development.  The network marketers are effectively small sales companies that don’t have to worry about product development.  They are free to focus on sales and are paid based on how much product they sell.

The great benefit for you just starting out is that your advancement in the organization is completely unlimited. In any traditional sales organization there is a structure of VP of Sales, regional managers, district managers, and so on.  It has a pyramid-like structure.  In order to advance you have to wait for one of the people above you to leave the organization.  Network marketing doesn’t have a pyramid structure.  When you join my team there is nothing to stop you from advancing beyond me.  There are at least two places in my upline where the sponsored consultant outranks their sponsor.  That could never happen in a corporate structure and definitely not in a pyramid.

And as for them all sitting around and collecting money from my sales efforts?  That just isn’t true either.  They put a lot time and effort into training and support for their many downlines.

I hope that clears it up a little.

Wayne Woodworth
Internet Network Marketer
I challenge you to outrank me

The company that I currently work for has an upside down pyramid for their corporate structure.  The customers are at the top because a company cannot exist without customers.  The next layer down has the regular employees who support the customers by taking orders, providing technical support, and handling accounting issues.  The next level are the team leads whose job is to support the regular employees.  They provide the employees with everything they need to get their jobs done.  Below them are a handful of team captains who support the team leads.  Then at the bottom is the company captain.  As you can probably guess by now, his job is to support the team captains.  The company is doing well even in this recession because they have very loyal customers and extremely low turnover in the workforce.  The company exists to provide good service to the customers and give the employees a great place to work.

Imagine what the world would be like if all companies were like this.  Every where you went you would see smiling faces offering excellent customer service.

This inverted pyramid is also how the successful groups in network marketing work.  They don’t describe this structure exactly but this is the way Nikken, the network marketing company I joined, encourages the teams to work.  For my upline to be successful they need to support their downline, me, and I need to support my downline.  For me to make a lot of money with Nikken I need to support a lot of partners who can make a lot of money.

So maybe instead of calling my sponsor an “upline” I should call him my “downline”.

Wayne Woodworth
You future network marketing downline?