Direct Marketing (that has commonly been referred to as Network Marketing) is NOT a “pyramid scheme.” The term “pyramid scheme” has developed extremely negative connotations because it has been loosely and unwittingly associated – and sometimes used interchangeably with – the term “Ponzi scheme.”
The expression Ponzi scheme refers to the illegal practice of paying earlier investors from the contributions of new investors with nothing of value being offered or exchanged. The phrase was coined after a man named Charles Ponzi who became infamous in the early 20th Century by promoting promises of high returns with little or no risk to his investors.
Direct Marketing has suffered over the years from this misunderstanding. There is a huge percentage of the population that still thinks that Direct Marketing is illegal, unethical, or ineffective as a legitimate income source. Nothing could be farther from the truth!
But what else is it not? Well, unless you want it to be, it’s probably not going to be a career in itself. And also, unless you want it to be, it’s not a business of sales, devoting yourself heart and soul to a single company, losing your identifying solely within their individual corporate brand. It’s not personal development. It’s not opening up your home to house parties or conducting hotel conference room presentations. It’s not conventions and appearing on stage to receive awards. And it’s not training and speaking in front of a room of a thousand or more people. Unless of course you want all of those things.
It’s not pitching your friends, family, neighbors, and coworkers. It’s not trying to make as many contacts with as many people (prospects) as you can, as quickly as you can, and then getting as many of those prospects enrolled (as either customers or distributors) as you can. It’s not getting on every team-building conference or Zoom call. It’s not promoting every single new product with a fever pitch like it’s the single greatest discovery in the world. Unless of course you want all of those things.
It's not about the hysterical over-promotion of meetings, events, and conventions and personal growth and riches and trips and all the other things that they try to lure you into buying off on. Unless that’s what you want.
It’s not walking around looking at everybody like they’ve got a target on their back. And it’s not striking up a conversation with every single stranger that you come into a three-foot radius of. It’s not that excessive, radical, extreme, over-the-top, fanatical behavior with circus antics. It’s not living and eating and breathing the business 24/7, with cult-like conduct and attitude isolating yourself away from everybody and everything that’s not “in the business.” Unless of course you want all of those things.
Companies early on invented that stuff in order to give their distributor base a sense of community and belonging in an arena that most might otherwise view as uncomfortable, undesirable, or just plain foolish. And companies also found that by recruiting those “type A” personalities that promoted the social, party, “let’s all go to the convention” atmosphere, that they could explode their businesses right out of the gate.
The problem is that they allowed a lot of those “type A’s” to hedge on the truth of the business by promising wealth, riches, and fast money, that weren’t realistic for most people. And so, when people started to realize that it wasn’t all mansions and sports cars and trips to exotic places, they felt the failure and they began to drop out and they passed the word on to anyone that brought up the subject of Network Marketing, that it’s just a scam and a “pyramid scheme” and you were an idiot if you got involved.
In a nutshell, the business model of Direct Marketing, at its core is simply the process of inserting yourself into the chain of a manufacturer’s consumer base, and getting a monthly check from the savings that that manufacturer enjoys by taking itself out of the traditional supply chain model of doing business.