Is Network Marketing a Fraud?

Is Network Marketing a Fraud?

Amy Posner says it best, “Network Marketing is the industry that folks love to hate.”

I get it; I had my own set of preconceived ideas about network marketing before I took a real look.  I thought it was hokey.  I thought it unprofessional.  I thought people who did network marketing probably couldn’t do anything else.  I didn’t have a very high opinion of network marketing or network marketers.  Not a high opinion at all.  But a lot can happen in twenty years…a lot.

In the last twenty years Network Marketing turned my financial picture around.  Needless to say, that made me a believer in the industry.  If it can do that for me, it can do that for you.  I don’t hold any particular special abilities.  I get up and put my pants on just like you do every day. I just learned how the business works.

I’ve also met some pretty terrific people in the last twenty years because of my association with network marketing; one of them is my Savvy Sponsoring partner, Amy Posner.

One of our missions is to examine the myths about network marketing and expose that which should be exposed, and champion that which should be championed.  So let’s lift the lid and take a really close look at one of the most egregious accusations of network marketing.  We’ll do this from time to time.  If you have something you’d like us to address, something you’ve heard from prospects or that is rolling around in the dark corners of your mind, let us know.

This is a classic example of:  It isn’t what you say but how you say it, that makes something stick. Typically this statement is thrown back at someone who has the audacity to suggest that network marketing may actually be a viable business opportunity.  It is usually accompanied with a look of outright distain and/or a smirk.

But think about this statement for a moment.  Who usually makes the most money in any business or industry?  The people at the bottom?  Not hardly.  What business do you know that the folks at the bottom are making all the money?  I don’t know one either.  It is always the people at the top who make the money.

We suggest this is a better question:

Every network marketing company has a compensation plan that requires certain activities of their independent representatives in order to get paid.  Typically those independent representative activities are all about generating product sales.  Great for the company.  Great for the independent representative.  Why?  Because those activities generate gross volume for their individual business team and their paycheck is correlated to their gross product volume.

The details of compensation plans differ from company to company.  However, your personal volume bottom line is directly correlated to the amount of product sold.  Who sells the product?  You do in conjunction with your business team (downline).  So who gets to the top?

The independent representative who did the most activity to build a business team that generates the most volume.

Is that unfair?  I don’t think so either.

And here is something else.  The person that was on top last year, or this month, could very well have a team member (a member of their downline) who surpasses them.  How?  Simple, (the rules don’t change) they produce more business activity.  Their business team can actually generate more volume (thus bigger paychecks) than the person above them in the matrix.  How is that possible?

Good network marketing compensation plans reward the people who have the most activity that generates the most team volume.  You are not paid the most because you are highly educated.  You are not paid the most because of gender.  You are not paid the most because of color.  You are not paid the most because of who you know or are related to.  You are paid the most because you earned your place at the top for what you accomplished.

That said, we know, yes KNOW, that building a network marketing business is not easy.  It could be described as simple, but easy, no.  Way too many people mix those two words up.  If you think about it for a minute it should be obvious this isn’t a cakewalk.  If it were easy, there wouldn’t be so much money on the table for those at the top.

Network marketing is a profession like all other professions.  It takes skill, tools and diligent smart work.  Unfortunately, not everyone is told that when they embark on building a network marketing team.  We hear things like ‘anyone can do it.’

This is not always popular to say, but I don’t think anyone/everyone can do network marketing.  I don’t think that network marketing is suited to everyone (anymore than being a lawyer is or a taxi driver).  But I do believe that way more people could be successful in network marketing than are – if they knew what to do and how to do it.  Just like anything else.

If you find that building your business is a struggle, go find help.  If you were playing golf but having no luck with your stroke, what would you do?  Quit?  Maybe.  But most likely, if you really wanted to play golf, you’d get help, you’d hire a coach.  If you wanted to be a doctor, chef, engineer, plumber or administrative assistant, you’d take the necessary schooling to teach you how to function in any of those positions.

If you were told:

• Anyone can do this
• You can do it in your ‘spare time’
• All you have to do is call your friends and family
• The product sells itself

You were told wrong.  No wonder you’re disappointed, disillusioned.  But the issue is not with the industry, the issue is with who told you it was easy and wasn’t going to take any real work.  

There are methods and strategies that work to build a thriving network marketing team.  Go find a mentor, trainer, or coach that knows them.  Find someone who has proven methods that work.  This is no time to ‘hope’ for results.  There is too much at stake.  Go to work using proven methods that will optimize your pay plan and put you at the top of your company.

And the next time someone says, only the people at the top make the money, you can look them in the eye and say,