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Wednesday, May 13, 2009
Is MLM A Pyramid Scheme?
By Guy Siverson
Recently I received this comment on my @BodyByChcolate Twitter account.
#TwitterFAIL for spamming Bellinghamsters one at a time for their MLM "event." Pyramid schemes only work 4 those @ top.
The messsage I sent out was:
Priv Chocolate Tasting Event: 06.02 Bellingham 7PM network opp. Pre-reg bonus 25 seats left - info http://bit.ly/SXWm2 Pls RT
I could run this person to the ground by pointing out that is followers and following are extremely low indeed, or point out that those higher up on the Twitter numbers get more recognition and love which must mean that Twitter is an International pyramid.
I'll do neither but rather I would like to directly answer their accusation while keeping their identity secret for discretionary reasons.
Please join me as we uncover the truth of "Is MLM A Pyramid Scheme"?
Let's start by looking into Wikipedia to see what it has to say about Multi Level Marketing & Pyramid Schemes.
PYRAMID SCHEMES:
A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered.
===> http://en.wikipedia.org/wiki/Pyramid_schemes
MULTI-LEVEL MARKETING:
Multi-level marketing (MLM) is a marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company. The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.
Not everyone likes Wikipedia so lets turn to AskJeeves and see if they can straiten out this confusion. We will do this by typing the word "define" before each word in question here on http://Ask.com
PYRAMID SCHEMES:
A fraudulent moneymaking scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them.
MULTI-LEVEL MARKETING:
A system for selling goods or services through a network of distributors. ... The typical Multilevel Marketing program works through recruitment. You are invited to become a distributor, sometimes through another distributor.
Well now we have Wikipedia & Ask Jeeves in agreement. Let's turn to the king of the Internet and let Google set them straight following the same process as what we did for ask.
PYRAMID SCHEMES:
A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, without any product or service being delivered.
MULTI-LEVEL MARKETING:
A business system where goods and services are sold through a pyramid scheme structure, with distributors on the top supplying others lower down the scale in return for commission
Finally we found someone referring to "pyramid scheme" while talking about MLM's. However, even here the words were "PYRAMID SCHEME STRUCTURE" and that may be why so many people confuse the two. They both use the same general structure but the difference is an MLM has an actual physical product (ie healthy chocolate) while a pyramid scheme does not.
However, in all fairness there are some points that were made in their 140 character post that we need to address.
Here is the post again:
#TwitterFAIL for spamming Bellinghamsters one at a time for their MLM "event." Pyramid schemes only work 4 those @ top.
"For Spamming Bellinghamsters"
Is a 1 time message about an activity that will be taking place in one's local area considered spam? I for one wouldn't think so. However, if I were to submit numerous replies of the exact same thing over and over again to a specfic person you are now officially spamming. I'm not going to take the time to define spam here and now. You have Google, search it out.
"their MLM "event."
Actually its a healthy chocolate tasting event where people will indeed be encouraged to purchase healthy chocolate. If they want to get paid to consume our healthy chocolate they may very well take part in our MLM opportunity.
Pyramid schemes
Since we clearly have an amazing chocolate product that is legally sold in 15 countries how can this possibily be an illegal "pyramid scheme"? Sure it is built the same way as a pyramid scheme. But just because something looks like a duck and sounds like a duck doesn't make it a duck.
only work 4 those @ top
No matter what area of interest you choose to pursue to build your career the higher up the ladder you climb the greater your success. It's no different in the world of Multi-Level Marketing. Though I will say that with this company unlike any other I have seen greater success faster and I've only been involved since January.
But, it does take work!
I wonder if the poster tried an MLM once for all of a month and a half, couldn't get his dog Rover to sign-up, and consequently came to the conclusion that MLM opportunities don't work. The question I would have is what wasn't working? The program or the enrollee? Whatever the case I've personally been very pleased with how financially rewarding something that doesn't work has been for me in just the few months I have been involved.
That's why my answer to a question like:
"Is MLM A Pyramid Scheme" would be flat out NO! I'd also take the time to tell them about my own personal favorite MLM which Body By Chocolates is built off.
