Pyramid or Business Opportunity? That Sounds Like One of Those Pyramid Schemes.

Why are so many involved in one of those pyramid schemes? This is the problem. We assume a business model we don’t understand is a pyramid scheme. They are not pyramid schemes, they are an alternative business opportunity that levels the playing field, making it affordable for most to get started with limited resources.

Pyramid Scheme

Pyramid structureA pyramid scheme has no final product. When you “buy in”, you give your money and then go and get others to do the same. In one model, you recruit levels below you and when it reaches so many levels, the top person leaves and the next two split to form two new pyramids. This continues until you can no longer get people to cough up the money to join the pyramid.

Notice that at no time did anyone buy a product or service. That’s what makes it a pyramid.

Here’s the rub, if you look at a “traditional” business model or a network marketing business model on paper, you will see a pyramid.

“Traditional” Business

In a conventional bricks and mortar type business, there is usually an individual who starts the business. They may eventually grow large enough to need more people. This is when the pyramid begins!

CEO

Vice-President Sales and Marketing | Vice-President Operations

District Sales Manager|Director Marketing|Director Facilities|Director Purchasing

Are you starting to get the picture? A “traditional” business eventually starts to become a pyramid. It can’t survive growth if it doesn’t. Those who believe they can do it on their own eventually give up under the weight of the business demands.

Multi-Level Marketing (MLM) or Network Marketing

In the world of MLM or Network Marketing, there are a few challenges.

Legitimate MLM or network marketing companies offer a service or product that meets a particular need in the marketplace. For example (Yes, these are my affiliate links.):

Image representing Canadian justice.When you decide to try a network marketing business, you have to decide if you are going to just sell product or service or are you going to develop a business enterprise. The choice is yours to make. You are the CEO of your own business. You have just decided that your business is going to represent a company and their product or service. How you do that is up to you. MLM is an alternative business model where you will have built in systems and coaching. Your mind is like a parachute. It only works when it’s open.

Sales isn’t for everyone. The challenge is that we don’t know if we don’t try. Most of us are selling all the time and don’t realize it. Whether it’s convincing your boss to try something new or your spouse to go see a movie, you are selling the idea. You might to learn some skills and tactics specific to your chosen business to succeed. Go in with an open mind and be willing to learn.

Some find that they can be consumed by the business for a while. Think about it. Have you ever seen a friend or family member open a shop and all of a sudden, it seems they dropped off the face of the earth? They didn’t. They are focused on growing their business and sometimes have to make sacrifices. What are you willing to do? Are you one of those people that have a negative impact on people close to you who have tried to start a business, MLM or otherwise?

At times, the greatest challenge is your own mind. If you don’t believe in your own ability to achieve success, you can be guaranteed that you won’t. In the immortal words of Earl Nightingale, “you become what you think about most often“.

The bottom line is that most of those “pyramid schemes” are legitimate business opportunities. Are you afraid of them because you don’t believe you can succeed? Does labelling the opportunity a pyramid scheme allow you to excuse yourself from taking any risk and maybe achieving financial and time freedom?

The choice is yours to make. Don’t let others tell you what to do.

The video below is a little dated and some might think a little “cheesy” but it does a not bad job of discussing MLM versus pyramid.

Make it a great day!

Barry

P.S. What am I thankful for today? I’m thankful for people who are able to think independently. I’m thankful for people who aren’t afraid to ask me to look at their business opportunity. I’m thankful for any chance to learn. What are you thankful for today?

 

Buying and Selling: What’s your preferred distribution model?

There is more than one distribution model for buying and selling products and services.  How do you like to sell?  How do you like to buy?

DISTRIBUTION MODELS

3D-Women-Arrow-02How many ways can you buy and sell?

 

I would be glad to hear about any other ways that you know of.  In the meantime, lets look at the differences and similarities of these models.

similarities

  • All provide a product or service.
  • All are legitimate methods.
  • All create “jobs”. (Some may be self-employed)
  • All offer opportunities for personal growth and development.
  • All contribute to a growing economy.

differences

  • Ownership.
  • Organization.
  • Product and service distribution.

BRICKS AND MORTAR

Businesses that set up in physical locations are commonly referred to as a “bricks and mortar” business.  These are most commonly retail and wholesale operations and personal or business to business service providers.  I can’t say I have heard of anything less than $50,000 unencumbered cash to get started in some years now.

  • Lawyers; Doctors; Dentists; etc.
  • Salons and spas; auto repair; plumbers; electricians; etc.
  • Grocery stores; Car dealers; Electronics stores (Future Shop, Best Buy); etc.
  • Marketing firms; Print shops; Management consultants; etc.

More often than not, these companies have a top down, pyramidal management structure.  Sometimes the roles all fall to one person!  You will rarely see direct sales companies, MLM or Network Marketing companies with a bricks and mortar location outside of their head office.  There are some exceptions.

 

INTERNET

gvo-Header.jpgSome companies are purely internet based.  eBay for example has a physical office for administration but don’t have a location that you can walk into to do your shopping.  Starting your own internet business from scratch will require specialized skills and a fair bit of cash for servers, software, internet services and so on.

Most distribution channels will use the internet for marketing.  Some will have call centres where you can talk to a real person.  These companies still have a top down structure.  Others may combine Direct Sales models or Network Marketing with their Internet marketing efforts.

 

DIRECT SALES

Companies like:

are direct sales companies.  Products and services are typically sold through home demonstrations and you have the ability to build a team under you.  You will likely be paid on the productivity of your direct team but not much further down.  If you stop selling, your income stops with it.

 

MULTILEVEL MARKETING OR MLM

Are you looking for a business opportunity that requires little cash outlay or specialized skills to get started?  Opportunity knocks!  The greatest advantage to Multilevel Marketing (MLM) is the opportunity for personal development and the opportunity to learn while you earn.

 

Why Robert Kyosaki recommended Network Marketing from Morse Wong on Vimeo.

 

I would suggest the greatest challenge is choosing companies and products that fit you.  Like any companies and franchises, there are bad and good opportunities.  You still need to do your due diligence in choosing your business partners.

MLM’s are different in that they recognize the importance of the front line sales people.

Although the MLM structure is very similar to most corporations, the treatment of people and profitability for business partners is very different.  You are treated as a business owner, not an employee.  You are paid as a business partner, not an employee.

You are paid:

  • To learn,
  • to sell,
  • to lead,
  • to teach.

When you have built a solid business, most MLM’s with a solid service or product, will pay you for many years after you stop “working”.

 

WHAT IS YOUR PREFERRED BUSINESS MODEL

man-with-barsAll of the above models are legitimate.  Your job is to find something that fits with your “Why” and then decide how to deliver your product or service to the marketplace.  The only “right” answer is the one that fits you and your budget.

You may want to consider taking baby steps.  Robert Kyosaki does a great job of talking about this in “The Business of The 21st Century” and in “Cashflow Quadrant.

I love that old saying: “Life is a journey, not a destination”.  I would suggest that if you don’t like roller coasters, don’t go into business!

 

Make it a great day,

Barry

P.S.  What am I thankful for today?  I’m thankful for all that I have learned through network marketing.  I’m thankful for all that I learned through corporate Canada.  I’m thankful for opportunity.

What are you thankful for today?