![]() The older the company is the more people on the bottom of the pyramid. This would be impossible in a pyramid scheme because the people making money would be the people at the top. Some even make it to the top levels that can be achieved within the company. They advance up the compensation plan to earn more than their sponsor, their upline. There have been millions of examples of people joining a network marketing company long after they started. In their compensation plan network marketing companies have levels that can be achieved as you grow your business.Īs you advance in these different levels you earn more money based on bonuses paid for achieving them. Bypass Your UplineĪnother key point in debunking the pyramid scheme misconception is the ability for downline distributors to bypass their upline and make more money than they do. As long as everybody is retailing products, which the federal trade commission says is important, no pyramid scheme here. This is handled by sponsoring new distributors on your front line, and then working in depth to help those distributors develop their own business. The confusion lies when a distributor attempts to develop a downline of their own. You can certainly see in the retail part of the business no pyramid scheme here.Įven if the distributor chooses to deliver products to the customer how the product makes it to the distributor is no different from most distribution methods. One misconception about multi-level marketing, also known as MLM, is the business model is a pyramid scheme. All is handled by the network marketing company. The great thing is you do little in the way of making these wholesale purchases. Wholesale distribution is the largest way to create a big network marketing business. The larger these wholesale purchases the more money you will earn. The wholesale buy still creates sales volume for your business. This price difference is their retail profit. They will order products at the wholesale price and sell them at a retail markup. They will order products at a discounted price for personal use. When you sponsor a new distributor, you earn money on their purchases. They ship customer direct like every other NWM company.Īgain, this is a help to baby boomers who want to be involved in the networking part of network marketing and not so much on the product fulfillment side of the business. Even established companies such as Avon, who are identified by ding-dong Avon calling, do not ship to their distributors first. Products are not delivered directly to the customer much anymore. This is another advantage to the network marketing distributor. Any customer service issues, refunds, and so on are handled by the network marketing company.The network marketing company ships the product directly to the customer and the distributor earns a commission on that sale. ![]()
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