Usually, when I’m having a conversation with someone who hasn’t really studied how the network marketing industry works—it’s also known as multi-level marketing, or MLM, and relationship marketing—the conversation will always come back to that age-old question, “Is that one of those pyramid schemes?”

 

When I first started working in this industry, that question was like a bullet to me. I knew the answer was no, but to try and explain it clearly left me tongue-tied. Now I love being asked that question. My reply? “You mean, like a corporation?” Which usually follows with, “No, you know—the one where the people at the top make all the money.” To which I reply again, “You mean, like a corporation?”

 

Robert Kiyosaki, the well-known author, entrepreneur, investor, and wealth expert, wrote a book with everyone’s favourite TV boss, Donald Trump, called Why We Want You to be Rich. In it they devoted a whole chapter to recommending the network marketing industry (it helped me refine my answer!).

 

Kiyosaki’s answer to the age-old question: “My reply is that corporations are really pyramid schemes. A corporation has only one person at the top, generally the CEO, and every else below.” I’m sure right now, you can picture the corporate structure and where you fit, if you’re working in the corporate world.

 

Kiyosaki goes on to say, “Compare that to a network-marketing business system [in the book, he has a diagram of an inverse pyramid]. A true network marketing business is the exact opposite of a traditional business model. A network marketing business is designed to bring you up to the top, not keep you down at the bottom. A true network marketing business does not succeed unless it brings people up to the top.”

 

I couldn’t have put it better myself. In the network marketing industry, everyone starts in the same position—at zero. They’re all on the same compensation plan and have the same targets to achieve. It doesn’t matter how old you are (although you do have to be over 18), your gender, your education, your time in the company or even who “thinks” you’re ready to move up. It doesn’t even matter if someone else is in the position you’re applying for. In this industry, it’s 100% based on performance. You can even out-earn people who were in the company before you were hired.

 

Still not convinced? Let’s look at the facts. Did you know that Donald Trump and Sir Richard Branson, two of the world’s most respected businessmen, both own network marketing companies? Even Warren Buffet, who invests in several network marketing companies, has been quoted saying they’re some of the best investments he’s ever made.

 

How could that be? If some people still refer to them as “pyramid schemes” and insist they’re businesses that never work, why do some of the richest businesspeople on the planet invest in and promote them? Maybe it’s time we take a second look.

 

Next week, we’ll take a look at how network marketing really works.