MLM vs Pyramid Scheme | Are you wondering how is network marketing not a pyramid scheme? This is exactly what most people think this industry is about, so in this video, I’m going to clarify that misconception and tell you the truth about network marketing!
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Today, I’m going to discuss how is network marketing not a pyramid scheme.
So one of the reasons that I know that network marketing as a pyramid scheme is when I joined, I was dead broke in personal foreclosure, had no advantages and I worked my way up from scratch to become the number one income earner of a company and saw a lot of people do similar kind of things but, stick around because this is a real thing that you need to know how to answer and how to evaluate.
So, first I’m going to give you some examples of actual pyramid schemes because I found that most people that say that word don’t- they don’t actually know what it means and so I want to share what it actually means and give you some examples.
Next, I want to help you on how to handle this if you are a network marketer and you keep hearing this objection and lastly, I’m going to share with you the one question that you need to ask before you join anything to make sure that it’s not a pyramid scheme.
Now, maybe you’re searching this because you’re a network marketer and you keep having people say this to you or accuse you of it being a pyramid, by the end of this video you’re going to know how to handle it and you’re going to feel a lot better and so make sure you stay till the end because I’m going to share with you really how to obliterate this objection but also how to understand if something is schemey or not.
So first, what is a pyramid scheme and I’m going to give you some examples?
So a pyramid scheme is it’s really pretty straightforward although most people, they don’t actually know this. They just throw it out there and because so few people understand the actual meaning that they can’t even rebuttal it, right?
And so a pyramid scheme means that the money that is coming in from new people to that concept are paying existing people that were in that concept. So if you look at one of the you know famous pyramid schemers, Bernie Madoff.
So Bernie Madoff had a multi-billion dollar investment fund and when you would invest in that, so let’s say you pay a hundred thousand dollars and you’re given certain expectations of oh, in five years or ten years, you should be able to reap these rewards.
So if you gave them a hundred thousand dollars, they would actually take some of that and payout existing investors. Now they’re doing whatever they’re doing with the money, right?
They’re pocketing it or putting it in other places but there is no- nothing being delivered. The only thing that’s being delivered is that you’re being told that your money is invested in a certain thing when it’s actually not, it’s being paid to the other investor.
Another example is our government, that’s another pyramid scheme. So when you hear politicians say we gotta raise the debt ceiling. So what they’re saying is federal reserve, please print more money so we can pay for more things that we want but we don’t have the money for so please print more money which we will owe you for and then we’re going to use that to pay for the stuff that we want.
So this is like the reckless teenager that doesn’t know how to balance her checkbook or anything like that and at some point, the system breaks and some of the ways that it breaks is people lose confidence in the dollar or they you start seeing inflation where you know all the prices start increasing.
You know like as of the recording of this video like gas prices are up and car rentals are up and supplies, in general, are up, they’re increasing so now the power of your dollar gets less, right, that’s inflation. One neat example that that I heard around this was if you look at gold.
The purchasing power of gold. So back in the late 1800s, early 1900’s, they had $20 gold pieces and they were synonymous. It was an ounce of gold, it was $20 and that ounce of gold was worth $20 and twenty dollars back then would actually buy you a a suit, you would have dinner and you’d have a little bit leftover, right?
Pretty cool, pretty cool deal, 20 bucks, right? Well nowadays fast forward, 20 bucks won’t get you anything but that ounce of gold at least right now is worth around $1,700, you get pretty decent suit and a nice dinner for that couldn’t you?
So, gold has actually maintained its buying power whereas the dollar through inflation has lost it. Those are a couple examples of if you’re taking in new money to pay off existing debt or you’re taking in new money to buy new things with no consideration of how money is actually going to be generated, then it’s probably a pyramid scheme.
Now, make sure you stay till the end because I’m going to give you the one question, the one question that will really serve you to make sure that you’re not a part of one.
So, next, how do you handle this if you’re a network marketer and you keep hearing the you know this is a pyramid scheme? So, there’s a couple ways, there’s a couple ways. The way that I suggest against is don’t try to explain. Don’t try to explain even what I just explained, that’s too much of you on the defense. Now I’m explaining it because this is a YouTube video and you you want to know but most people that accuse it of being a pyramid, they don’t want to know.
They’re just wanting to shoot you down, they’re just wanting to be negative, they don’t actually want to know the history of the gold coin, right? They don’t want to hear that stuff. I’m sharing it here because this is a YouTube and and this is you know educational, most people aren’t looking for an education.
They’re looking to shoot you down and just throw out a word that they don’t even understand. And so when they say a pyramid scheme, believe me, 99 times out of 100 they don’t know what that means and so you could play dumb, right? You could say oh, pyramids like I guess I don’t know what you’re- I don’t know what you mean. What’s a pyramid scheme?
And they’ll say something usually they’ll say something like well you know it’s like we’re and you know it’s not legit, right? Like they don’t they don’t know the actual answer and so nine times out of ten they’re going to give you something along those lines and you say well all I know is that they pay me, I like the product and the service, I like the people, I’m going to continue doing it. If you want to learn more, great. If not, don’t worry about it.
Don’t try to convince them. Don’t try to turn them around, don’t give them illustrations, don’t give them history lessons. They don’t want to be educated usually.
Now if they ask you then fine, but most of them aren’t going to ask you that, okay? There’s that way and then there’s the you know another way that you can handle it is just to kind of laugh it off. So if someone says this one of them pyramid schemes, you could make a joke of it and say yeah, you got to get in fast because you know we got to make money in the next six months before it shuts down. No, I’m just kidding.
So it kind of depends on your personality. If you have that personality to pull that off, that’s a funny one too. I’ve done that before. It’s not my go-to but I’ve done it before and the main thing here is you not being negatively affected or getting defensive over this question because it really doesn’t apply to most network marketing companies. Now, are there some bad ones out there? For sure. Are there some bad politicians out there, right?
Are there some bad lawyers out there? Are there some bad teachers out there? Are there some bad police officers out there? Yeah, there’s there’s you know bad examples in all of those situations but that doesn’t make all of them bad and that’s what most people do is they collectively look at network marketing as all of them are bad and that absolutely isn’t true.
I have you know I experience an amazing amount of abundance and wealth through network marketing from being dead broke and so don’t get flustered, don’t get defensive, don’t try to explain. Use those strategies to help you. So before I get to my last point which is going to be extremely helpful for you, who needs to hear this?
Who do you know? Do you have family members that need to hear this? Do you have you know people that struggle with this objection in your team that need to hear this? Feel free to share it with them and while you’re at it you may also want to subscribe because we cover so many other topics here on this channel. So lastly what is this question? What is this one thing that will help you to understand whether you’re in one of these things?
It’s real simple, okay? Whatever your product or service is not opportunity, not opportunity. Whatever the product or the service is, would people pay for that if they were part of the opportunity or not?
Bow when it comes to investments like the Bernie Madoff example, right? Well, they’re only in it for the opportunity or the opportunity of increasing their money so that’s a tough one but in network marketing, you have a product or a service.
Now maybe it’s a service of credit repair or financial services or education, you know there’s a lot of different services but there’s also a lot of different products in network marketing.
Would someone pay for that product or service whether there was a making money opportunity to it or not? Because if they would, if you see people getting results and and benefits from the product or the service, then that’s much more likely to be a legitimate business than something that you can’t answer that question to.
Now you may think that oh, well it’s overpriced, it’s overpriced. Well, overpriced doesn’t make something a pyramid scheme and if people are paying for it, whether they’re part of the opportunity or not, then you could say it’s properly priced and be careful with the price thing because what you think is expensive to someone else may not be expensive at all.
So when I’ve done different seminars and different even online events, sometimes I’ll ask the question of hey, what’s the average price of a good car and just let the comments roll? I’ve had people say thousand dollars, I don’t know what they’re buying, right? I don’t know what kind of car that is but I’ve had people say twelve thousand, ten thousand, fifteen thousand. I’ve had people say a hundred and twenty thousand.
I’ve had people say ninety thousand, eighty thousand, seventy thousand so okay, well what’s the answer? That depends on the person. If something was helping you to lose weight and feel great and have more confidence, how much would you pay for that? Would you pay hundreds of dollars a month for it? A lot of people would, absolutely. And so just because if something is overpriced or you feel that it’s overpriced, that doesn’t make it a pyramid.
Now if people are mismanaging that company and they’re unethical in how they run the company, then they can make it a pyramid. They can make it a problem but one of the basic questions is would someone pay for this service or buy this product whether they have the potential to make money or not.
So now that you’ve gotten help and some history and education around the whole you know pyramid scheme objection, I want you to start prospecting bigger numbers and we have something that will absolutely help you.
So we have a free resource called our five-day prospecting power up, I’ll put the link in the description. Click that link, get registered for this free resource and it’s going to help you locate more people to talk to on social media and tell you exactly what to say, how to follow up with them and I think it’ll really help you.
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