Differences between network marketing companies and pyramid schemes

qnet, direct selling, network marketing

One of the biggest misconceptions about network marketing is that it’s the same as a pyramid scheme. No, it is not.

Network marketing (NM), also known as multi-level marketing (MLM), is the promotion method used by direct selling companies, such as Amway, Avon and QNET. These are legitimate businesses, bringing real opportunity to millions of distributors and real benefits to customers through quality products and services. Unfortunately pyramid schemes in the past have tarnished the reputation of network marketing.

The main difference is that pyramid schemes focus on rewarding members for the recruitment of other members, whereas legitimate network marketing companies reward members for genuine product sales.

Products are sold directly to customers without a traditional brick-and-mortar store. Hong Kong-based QNET successfully employs a unique business model that combines NM and e-commerce, so all products and services are conveniently sold online. An important part of any legitimate MLM business – or any other business, if you think about it! – is product sales. Unlike pyramid schemes, QNET rewards its Independent Representatives (IRs) for selling well. If an IR doesn’t want to be the sole salesperson, he or she can bring on other members to grow the customer base, much like any business. Many IRs are customers themselves using QNET products, which are all of good quality. If you were earning a commission from selling high-quality products, wouldn’t you want to buy them for your own use, too?

A reputable network marketing company has an attractive compensation plan.

The myth that only those at the “top of the pyramid” can earn money is archaic and ridiculous. There are many NM opportunities available today, and to survive in this competitive environment, companies must offer attractive compensation plans. It’s the same with non-MLM companies; if you want to attract talent, you must offer a good remuneration package.

In a non-MLM job, you probably get paid a basic salary and if you’re lucky, benefits. When you compare the difference in income potential, is it any surprise that some network marketers can be so successful?

Real network marketing businesses invest time and money in their members.

Companies that genuinely care about their members and want them to succeed are the ones that provide business tools and training to help them grow their business. Does your company give you the support you need? Is there regular training and not just one-off workshops?


3 Comments Add yours

  1. Mike Drigger says:

    Network Marketing, Referral Marketing, Multi Level Marketing, MLM… the names may differ but they all refer to the same system that is one of the fastest growing methods of moving products or services in the world today.

  2. Maya Asarpota says:

    Its a good read with clear differentiation – wish e’one would understand.

  3. samslife573 says:

    This blog is amazing even though I have just begun 2 months back and only my 3 family members have started I have earned from mine and their initial investment close to 2 lakh rupees so yes the money is real and in order to earn huge you must keep working even if you get to 20 people in 3 years in 6-7 years you’ll be financially free because in that time your network would increase and you’ll have a much better life but when I say 6-7 years I mean 2500 days and 24 hours into 2500 days is 60,000 hours so it’s a lot of time but compare that to 40 years in jobs you’ll realise that it’s actually a great business but too many dumb people out there to post negative stuff . Thanks to those who support and love it

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