There are lot of misconception about network marketing, most people think network marketing is a ponzi or pyramid scheme because of the triangle/pyramid structure of the mlm sales organization. Try to understand that the issue in pyramid scheme is not the triangle structure, if you notice all organizational structure is pyramid in shape, whether it is a government or corporate. (see image below)
A pyramid scheme is an investment scheme like mutual funds, stocks or even savings but the different is it offers a super high interest return compare to these legitimate investment firms.
This is how a Pyramid Scam works
1. A legitimate investment such as stocks or mutual funds use your invested money to fund a business. So if the business grows then the dividend of your money grows also. While in a pyramid scam you earn by getting other to invest in the investment structure.
2. In a pyramid scheme – a person recruited pays a fee that is remitted to the promoter and is promised that his income will come from subsequent series of recruits and payment fees to the promoter by others. In Network Marketing, income does not come from recruiting people but from sales of products. So the more sales you and your team generate the more income you’ll get.
Therefore in Network Marketing it’s all about SALES of PRODUCTS and SERVICES. It is no difference to other sales organization.
Ending Up Misconception In Network Marketing
To end up this post, common misconception about network marketing largely brought by people who lack of knowledge about the industry. Other are based only on bias opinion of unsuccessful distributors.
Try to understand network marketing is not a get-rich-quick scheme, it is a good business model for people who doesn’t have experience and knowledge in the world of entrepreneurship. If someone tells you that you will get rich in network marketing then believe because it is true, but not overnight. This is a business you still have to work on. Skill, proper mindset and continuous education is 100 percent important in order to succeed in this industry.
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