Network Marketing – Is it a Scam? Here’s how to tell the difference between pyramid schemes and the real thing

By August 12, 2015May 10th, 2020Self Development

Network MArketing, is it a scam, pyramid schemes

Ok, quick disclaimer – I am not personally in network marketing. I just work with clients who want to grow their business using the conventional ways as well as the unconventional online methods to build a substantial business. And so having said that, let’s continue!

There are a few myths that surround network marketing and you may find yourself the recipient of some person’s unconsidered opinion about your business. Do you know the difference yourself? Do you know what makes one a scam and another a legitimate business opportunity that can give your prospects freedom while working from home?

Here are a few things to consider.

Does it have a product?

Is the product you are selling legitimate? Is it quality and do you use it yourself? If you don’t, you should. Why would you sell a product that you do not want to use yourself? Does your company provide training seminars and materials on the product rather than just on recruiting people? Is there a lot of emphasis on selling a particular value of the product in order to go up the compensation plan? If this is the case then you can rest assured that your company is certainly legitmate.

And remember that for your own sanity and ability to sleep at night, find a product you actually enjoy using so that you can sell it with gusto and confidence because you have seen the results in your life.

If you have not yet joined a company, take the time to speak to other business owners in it, particularly those who have been doing it for 90 days or more. Go to a few meetings and see the kind of people involve in it and ask questions. Put your own mind at ease so that you can put others minds at ease too.

Bottomline – Pyramid schemes have no product or service. Network marketing business opportunities do.

Is it Legal?

Is the company you are signed up with or considering signing up with, accredited by any external body? Yes, then you are perfectly legal. No government or official body will knowingly allow a company to continually deceive consumers. The only way people in pyramid schemes can make money is by getting people to sign on for a lot of money whereas your business opportunity has the potential to be a retailer of the product or service and there ore build a business solely on that if you so choose. This makes it very legal.How long has your company been around? This too is a sign that it is perfectly legal. Scams tend to be fly-by-night; They are here today and gone tomorrow so do your due diligence to make sure that this company you are paying money into is fully legitimate.

Again, speak to a lot of other professionals in the business who have nothing to gain by lying to you. Dig deep into the company to make sure it does not crumble under scrutiny.

Bottomline – Pyramid schemes are illegal and there is no paper trail for them. Buyer beware.

Get Rich Quick Scheme

This one may be hard to spot as some exuberant distributors for a company may be mis-selling it by making it look like you can get rich by doing very little in return and in a very short time. This, on its own, does not make it a get rich quick scheme as even in a regular business, you could make money very quickly if the conditions are right and what does quick mean anyway?However, if you look closely at a network marketing company, you will see exactly how profit is being made. And it is usually mostly from the sales of the products. Yes, there is recruitment of other sales people or distributors but ultimately there is an emphasis on selling the product or the service as talked about in the last two points. And if you manage to shift a lot of product in a short time, then yes, you can get wealthy quickly. However, in a pyramid scheme, there is absolutely no clarity around exactly how the money is going to be made except to say that you must keep getting new recruits into the business and taking a proportion of their joining – in- fee.

This is a get rich scheme with no provision of value! And therefore completely illegal.

Bottomline – Pyramid schemes are get rich quick schemes with no transparency. Dig deep and watch it all crumble.


Network marketing is such a great business model, I really do not understand why anyone who is trying their hand out at business does not jump in with both feet to get the training that most companies provide. If you are already in the field, confidently shout from the rooftops just how awesome your business is because, it really truly is!

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