Network Marketing and Pyramid Scam Business - The Simple Differences You Need To Know

My wife have joined a Network Marketing and Direct Selling business last quarter of last year. Being the ever-supportive better-half, I was oblige to give her all the support she needs for her to get started smoothly.

Being an advocate of personal finance and investing for so many years now and helping ordinary people get started in investing, I never advised anyone about Network Marketing.

Just like any ordinary people around, Network Marketing have a negative impact on me because of misinformation that Network Marketing is synonymous to Pyramid or Ponzi schemes. And you are aware, too, that news about PONZI schemes or Pyramiding scams that amassed millions from investors were still fresh from the minds of the Filipinos.

Who would forget the very notorious AMAN Futures Group that victimized around 15,000 Filipinos, anyway?

In the process of helping my wife to set-up all her plans for her new business endeavor, I am also learning in the process. The said process have made a paradigm shift in me. This opened my eyes about the difference of a legit Network Marketing business and a plain Pyramiding Scam.

What are these facts?

• That a Pyramid scam profits solely on the membership fees of new recruits. A legit Network Marketing business members can profit through selling of products even without signing up new members.

• That members of a legit Network Marketing business in any level can surpass the income of the people who recruited them.

• That most of pyramid scams have huge membership fees. A legal Network Marketing business have lesser sign-up fees and awards the new recruit with a start-up kit that will help her generate income in her new business.

• Some pyramid scam promises you can make profit by solely investing your money like the AMAN Futures Group scam. Your income in a legal Network Marketing business depends on your ability to sell your products or services and your ability to build your team of network marketers.

Given the facts mentioned above, some people still fall victims on Pyramid Scams mainly because of the following:

•  GREEDINESS – when we are offered with unbelievable huge returns from our investments, we are blinded by our emotions that we have just hit a jackpot and will soon be racking up millions in a very short period of time.

• LAZINESS – we are more comfortable of just giving the money and wait for the promised returns from our investment than selling our products to other people.

• IGNORANCE – most victims of pyramid scams were easily convince by the sweet promises and persuasive words of these scam experts that they would easily swayed that their money is worth investing to the business.

•  MISINFORMED – most victims of pyramid scams were acquainted with some of the victims, too. People were easily persuaded by their friends to join the scheme whom they think have just hit jackpot and they do not want to be left out from the “blessings” their friends were enjoying presently.

For those who are planning to get involved in a Network Marketing business, it would be important to ask questions about the business being offered to you. Ask as many questions as you can. Ask for facts or visit the main office of the company. What you will see will tell you if the company is operating legally or not.

Check if the products were of value-for-money for the potential buyers of the products.If you feel comfortable and satisfied about what you have seen, then that's the time you may consider dipping your toes on the business. 

More about Network Marketing and Direct Selling business on The Pinoy Networking Society blog.

Click here http://www.thepinoynetworkingsociety.blogspot.com

May the good Lord will bless you and your household all year round!