Have you ever been asked 'Is this not just another pyramid scheme?'

Often you will find that they themselves do not know what it means. In his booklet “MLM Simple Success Guide” by Dr Dean Black states: ‘Above a certain size any organisation that distributes products and services ends up shaped like a pyramid. Delegation creates a pyramid. Our government is also a pyramid, so our schools and churches. All successful businesses, because they distribute products and services, end up shaped like a pyramid. There is nothing inherently wrong with a pyramid structure. It’s a question of value. If value, (in the form of excellent goods and services) flows down a pyramid, power (in the form of Rands) will in response, flow up. If the business does not provide real value (or no value at all as in the case of chain letters,) then power (money) will stop flowing and the structure will collapse. Such an enterprise, whether network or conventional, is called a scam. Network Marketing is the fastest and most cost effective way of getting a product in front of the customer and hence it becomes a very viable system of distribution and sales where independent contractors earn commissions on sales of products from a manufacturer or marketer to the end consumer. If you want to use the words ‘pyramid selling’, a normal corporate company (Figure 1) is more of a pyramid than any network marketing company. Figure 2 shows that network marketing is the direct inverse of a corporate company as it is open at the top, not closed. Everyone in the network builds down to a certain level (in Sportron’s Plan it is 8 levels deep) and every member has the same opportunity to build their 8 levels. Network Marketing 1. Low Risk 2. Valid Products/ Services 3. Income is generated by the sale of Products 4. Independent distributors can earn more than their sponsors 5. Companies always guarantee to re-purchase their products within a reasonable time period. 6. Lawfully and generally safe 7. No requirement to purchase large stock up-front. Pyramid Scheme 1. Large introductory fees and investments 2. Products are irrelevant 3. Income is generates by enrolling people 4. People at the top of the pyramid always earn more 5. If products are at all involved. The distributors are stranded with them 6. Unlawful and very risky 7. Often required to purchase large stocks. This is known as front-end loading.