There are a number of key differences between Pyramid Selling and MLM (or network marketing). Ive listed them below point by point. But remember… the real differences lie not in the technicalities like structure and methodology, but in the motives of those involved in each. You’ll still find people in MLM who have the same selfish, greedy, lazy mentality as the old Pyramid Selling operators, just as you’ll find them in any system where there’s a great deal of money to be made.

Pyramid Selling
1. Principal income from recruiting. Income from retailing is incidental or spurious.
2. Distributor locked into position in Pyramid. Can’t pass sponsor.
3. People at top make the real money — until the Pyramid collapses.
“Ground floor” opportunity really means “downhill” opportunity… everyone who joins has less opportunity than the person who recruited them.
4. Income from products based on discounting on a sliding scale.* In reality, means that prices get higher and higher until impossible to sell.
5. Product not important. May or may not work well. In reality, acts as ‘bait’ for recruiting ‘hook’. Usually no guarantee, non-returnable, no refunds.
May not even be a real product.
6. Real financial risk, especially for those at lower levels, as non- returnable products become harder to sell downline or at retail.
7. Main appeal is to selfishness, greed, envy and laziness.

MLM or Network Marketing….
1. All income earned from retailing of products. No income simply for recruiting.
2. Not locked into organisational structure. Can pass sponsor and upline distributors based on personal achievement.
3. Anyone can earn top money — based on personal achievement, not position in organisation. Business opportunity improves with time and exposure. Based on sharing an opportunity for genuine financial independence through co-operation.
4. All income derived from product sales through commissions and bonuses according to personal effort. In the best MLM plans, all distributors buy at the same price. Performance bonuses reward higher achievement.
5. Products are all important because repeat sales is key to success. Products guaranteed to perform, satisfy or money refunded. distributor stock can be returned for refund in most companies.
6. No financial risk. No money paid for recruiting, products are returnable for refund.
7. Appeal is to nobler attributes — sharing, helping are among better aspects of MLM companies. Top achievers typically help others and rewards follow naturally.

*Some MLM plans operate on a sliding scale of discounts. In our experience and observation, these plans tend to attract more people inclined to exploit the system and cause difficulties. Such plans are often open to manipulation and can generate resentment, envy and friction. Some are typified by regular disintegration of downline groups through internal pressures caused by these attributes. The most stable, reliable marketing plans use a fixed commission structure with variable performance bonuses which encourage positive behaviour. In real terms, discount schemes appear to appeal to, and encourage, the undesirable attributes that typified the Pyramid schemes. They reward your ability to buy, not your ability to sell… a fatal flaw in any business system.

Just completed this for the December Noni Pearls Magazine, thought I would share it with all of you. Hope you enjoy it.

Avoid the most common mistakes

Here are the 10 most common mistakes that networkers make. These mistakes are often ones of attitude, missed judgment calls, or misinformation.

Common mistake in network marketing -#1

Inflated Earnings Expectations

There are many millionaires in the Network Marketing Industry. There are also many millionaires in the NBA as well, but how many schoolyard ballplayers make it to the NBA? VERY FEW! This is the case in Network Marketing and those who become millionaires as well. While a large number home based business owners earn a great part-time income. The average individual spends more time dreaming about what they are going to do, or spends their time in fruitless activity. Realistic expectations for the average part-timer should be an extra $400-$500 per month. Don’t sell anyone else the millionaire line. It may happen, but it simply is not the average.

Common mistake in network marketing -#2

Go For the Product, Not the Plan

I hear it nearly every day. Just last night I received an unsolicited call. The conversation went something like this: …”Hello, I understand you want to start a home based business and make boat loads of money”……I stopped her at this point and asked her if she has used that introduction very long. She said, “oh yes, I have been doing this for years now!” So I asked her how effective she was in calling phone numbers with that opener. She said, “I make lots and lots of money”. Our conversation went on for about 10 minutes with her telling me how much money she was making and how easy it was to make “boat loads” of money. Ten minutes into our conversation, she had yet to reveal what it was she was representing–what was it she was selling to make BOAT LOADS of money with? This should be one of the first things you speak about.

It was at this point in time I informed her that I currently had a home based business and was not looking to enter into another business. “Could we please speak business to business here as I am not a prospect”. She stammered a little bit but politely agreed. As it turns out, she simply copies pages out of the phone book and calls each name one at a time. She has been doing this for a year with very little positive results, and is struggling tremendously to earn more than $200 per month. You guessed it, I asked her if she would be interested in learning more about my company and the team benefits. In the end, I mailed her a copy of the current magazine and some additional literature. She was excited to hear that we work with our team members one on one coaching and mentoring. She stated that the person who signed her up has never spoken or responded to communication in more than 3 years. This is just sad and pathetic.

Too often, the temptation is to speak with our recruits or prospects about the “money” which can be earned. As a result, you may sign a few new people up who are looking only for the money…while this may work, you are missing one of the biggest, best and most effective sales tools…….YOUR PERSONAL TESTIMONIAL. How effective is a man, who has never cleaned, cooked, or used a vacuum cleaner in his life going to be at selling items to make these chores easier? It is much more simple to speak about the “business end” when your audience believes you because you believe in the products.

Of course, a fair compensation plan, which provides good incentives, is important. But in the long run it is the company’s quality products which people bond themselves to. The management and the vision make all the difference in the world.

Common mistake in network marketing -#3

Don’t Think Short Term

The Network marketing business is like any other worthwhile endeavor. Realistically, a distributor should not expect to see the real fruits of their labor until at least six months into their business. Those who have been truly successful have been at it a long time. Don’t expect it overnight and never quit working towards the goal.

Common mistake in network marketing -#4

It’s Not Easy Money

We have heard it a million times, we may have even believed it a time or two. This is one of the things I hate most about the industry. People seem to think that the pitch should be “easy money”, you don’t have to work, you don’t have to sell, you just make a list, sign a few people up and they do all the work for you! Sound familiar? Still waiting for the pigs to fly into your mailbox delivering great big checks?

Experienced Network Markers will tell you that it is not an easy money game. It is not merely a recruiting game. Distributors who are successful know their product, know their customers, know the company’s vision, and are prepared to do that which is necessary. HARD WORK. Look at the name Network Marketing.

Common mistake in network marketing -#5

“Free-Bee” Product – Forget About It

You get what you give and you take what you get! It’s not about offering something for nothing, it’s about adding value to what you have! I cannot stress this enough.

If you want to sit on a roller coaster of ups and downs. Downs being the money you spend for a freebee or a gimme product, the Ups being the instant traffic or interest you have while someone walks up to you…. with their hand out for your freebee. You will generate a great deal of Interest only in the trinket, but not what it is you have to say! Once they have what they want, they will never look back. You want activity, likewise, you also want FRUITFUL activity. If you must offer something for free, associate a value with it that benefits the individual. We offer a $25 Gift Certificate for all new Case Autoship Qualified Distributors. They in turn may use this with the company on a future purchase. Why do we do this? Because the chances of them trying another product from the company is high–we know the quality is second to none and feel that the additional exposure will show them the true value of other products.

Common mistake in network marketing -#6

Don’t Ignore the Company Track Record

A distributor who is looking to increase their odds of becoming successful is looking for a company with a good, strong, firm, and consistent track record. A track record demonstrates quality of management and products. This is very important for those who are genuinely “business builders”.

Common mistake in network marketing -#7

Run –Don’t walk!

You should avoid a company who requires you to carry large investments of inventory. The monthly minimum should be what you can realistically use in a single month. Autoship programs for both customers and distributors, represents a far more fair and long-term approach than large front load requirements.

Common mistake in network marketing -#8

Look for Products with Profit Margins

There are many Network companies in the world today. A great deal of them offer very low if any profit margin return. As a business builder, you know that Network marketing isn’t for everyone. However if you have a good product, the product can be sold to everyone, you have a good thing going. Far too often distributors concentrate on the compensation plan and earnings hype then spending time looking at the profitability of the products or services offered by a company. A company with an exclusive product, these companies, can justify a higher profit, which means the ability to pay commissions in the long term from the sale of the products.

Historically, this is why the largest and most successful Network Marketing companies have had, as their mainstay, consumable products that are proprietary. These products are unique to the company, allowing for sufficient profit to pay commissions. If the products are available in every shopping club, grocery store or nutrition store, chances are, that is where the public will make their purchase.

Common mistake in network marketing -#9

Don’t be a junkie or a ping-pong

Very few distributors in the industry have developed the ability to work multiple programs effectively. These types of distributors are few and far between. As the average distributor is part-time to begin with, you should carefully pick a company and stick with it. History favors the long-term committed distributor rather than the next-opportunity-junkie who hops from opportunity to opportunity. Focus and energy is hard to maintain with one company and its products, let alone several. Splitting your time and energy with several companies will most likely end with limited or paled results. Focus in on yourself, your goals, and your desires in one direction.

Common mistake in network marketing -#10

Turn off the TELEVISION

Activity is the name of the game in network marketing. You must do more than complete the distributor application; call your friends and sit back waiting for the money to be rolling into your mailbox. Turn your television off and get proactive. Do you know how many hours you could find in a day if you simply were willing to turn the television off?

The most successful people in network marketing are the ones who are constantly recruiting, selling and calling upon the same prospective customers and recruits multiple times. Those who sit back and watch the television in all their spare time will have unfulfilled expectations.

For the full version of this article or others please visit http://www.nonipearls.com

This article is in the December issue in the Building your Business section. Can’t find the answer to what you are looking for? Join in the Community Forum, someone will come along and answer your questions for you.

About The Author

Noni Pearls Magazine© is an official publication of the Noni Pearls Team and is published four times per year (give or take a few articles each month). No reproduction, copies, or duplication of any kind may be made of this material without the express written permission of Noni Pearls. http://www.nonipearls.com

nonipearls@tahitiannoni.com

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Consulting in MLM has gotten to be a big business in Network Marketing. Being one myself, I have found that there are good ones out there, and then there are well, not so good ones. You must know what to look for, before you spend a dime with them.

Many MLM Consultants are actually Network Marketers that say they are consultants. You must understand that consulting is a career and profession that demands many things, but being a Network Marketer does NOT automatically qualify one as an expert. Even if they have had great Success in MLM, that may be due to being in the right place at the right time, with the right people. That happens in Network Marketing often.

Here are the 5 things to look for in a good MLM Consultant:

1) A Track record that is available for Inspection.

Any good consultant, no matter the industry, will keep their track record available for any kind of inspection by a future client. They have nothing to hide, nor do they want to. The results they have accomplished speak for themselves.

Ask them if they have some clients you could talk to, or get some kind of testimonial. Track records in consulting can mean the difference between spending money and getting little, or spending money and getting a lot. Check what they have DONE, not what they said they have done. You will be glad you did.

2) Check for their Credentials.

What kind of solid credentials do they have that would warrant you spending money with them? What kind of education about MLM do they have? What kind of experience do they have in Network Marketing? Do they have the right business experience? Have they ever run a business before? What kind of degree do they have if applicable?

Credentials are important in modern day consulting, and not only for you, but also for the results you seek from an MLM Consultant. Most consultants have a portfolio they can show you. Ask for it, and study it. You will be glad you did.

3) Look for Professionalism.

Professionalism is a MUST in any field of consulting. Do they come across as a professional? Do they speak as a professional? Do they communicate in a professional manner? How do they handle themselves? How do they handle other people? Do they return phone calls in an efficient manner? Do they keep their phone appointments? Are they prepared for the appointment? Do they follow up in a professional manner? Are they pushy, or have your best interests at heart? Do they come across as honest and with integrity?

Being a professional speaks well of a consultant. But here is the KEY- are they CONSISTENT in all of the above? And do they do it with a smile on their face? These questions will tell a lot about an MLM Consultant and how they will handle things in any future endeavor.

4) Do they ask questions that are focused on your problem, or questions that are focused on being a consultant?

There are many questions that consultants ask that are all part of being a consultant. You want the kind of QUESTIONS that zero in on the solution to YOUR problem, not what they have learned to ask as a rote exercise. You are looking to hire them to solve a problem, not be a consultant. Make sure their questions are focused on moving you forward, not just creating conversation.

Brutal? Yes, Honest? Totally. MLM Consultants are not cheap, and if you are going to spend money, make sure that you get what you pay for, and get your challenge resolved. That is what MLM Consultants get paid for- to solve problems, not to engage in a fruitless boiler plate exercise.

5) Have they actually spent any time working Network Marketing and understand the culture, the philosophy, and what the REAL dynamics are to create Success in a group, and an MLM company?

I am amazed that there are “consultants” out there that have never spent an hour in the MLM field. They have never recruited anyone. They have never sold a product in MLM. They have never held a Company Event for a team. They have never done a presentation around a kitchen table, or a home meeting. They have never explained an MLM Comp plan to people before, nor do they know how. But yet, they sell themselves as an MLM Consultant.

Make sure that there is SOME experience in the field, as that alone brings a wealth of knowledge that many do not have. It is not easy building a successful MLM group and business. If you have not done it, then you are coming as an MLM Consultant, from more of a position of weakness than someone who has, and can explain what it took, and how to do it. It makes a lot of difference in understanding the business of MLM as well.

Experience is a MUST and that includes also working in an MLM Company in some form. That can be as simple as being part of an ‘Inner Circle” team that was familiar with the workings of a Network marketing company. Having worked for an MLM Corporation is a big plus as well.

These are the 5 Traits you should look for in an MLM Consultant. There are more you need to consider, but these are the 5 MAJOR ones when considering MLM Consultants.

Doug Firebaugh is one of the top trainers in the world in MLM and Network Marketing. He was fulltime in MLM for 13 years, and the last 7 years has traveled the world training and speaking. He lives in Birmingham, Michigan. Over a million people a month read his training ezine. You can get a FREE subscription at: http://www.passionfire.com/pf_heat_4.html

Contact: doug@powerfire.com

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