How to Overcome the Biggest Misconceptions

by Michelle on August 2, 2012

  • “Is this a pyramid?”
  • “Is this a pyramid scheme?”
  • “Is this one of those things?”

The biggest misconceptions around network marketing are that there is some sort of “scheme” involved or that it is shaped like a pyramid.  When people ask these questions, I have come to find that more than 9 times out of 10, they are not clear on what they are asking.  The question behind the question is typically, “Is this network marketing/direct sales/multi-level marketing (MLM)?”, which are words they are less familiar with.  So instead, they use “pyramid” or “scheme” to describe what they are trying to ask.  Ironically, both are inaccurate. 

Where do the misconceptions come from? 

One of my business partners recently stated it eloquently: “It’s not atypical that we hear things, file them away into our brains, and then we repeat them as if we know what we are talking about.  Because someone once said it, and it must have been a credible source because I associate a powerful emotion with it, and based on my impaired understanding and memory, it must be true.  This is not ironic, it is simply human nature.  We are all guilty of doing this with something at some point in our life.  But that doesn’t make it true.”

It is easy to mistake the pyramid, and here is why. 

In some companies, independent consultants have taken their guests to presentations where circles were drawn to show how money is made in this business.  Not all companies share it this way, but it has been done.  In all companies, though, it is fair to say the initial showing of how money is made looks like a pyramid.  There are two things to consider here: pyramids are not bad and the drawing (at least in network marketing) can be deceptive.

What most people don’t realize: corporations are pyramids. 

The reason we do not typically associate a corporation with a pyramid is simple.  When you interview in the corporate world, you are not asking the CEO how the money is made or where your salary comes from.  But truly, in a corporation, there is one person at the top with layers of management below, the final layer often being hourly waged employees.  The way a true pyramid works is that there is no way for anyone who is a layer below another to make more money than those higher up in the pyramid.

The shapes of network marketing. 

In network marketing, since there is a financial investment, the person considering is absolutely going to ask “how” money is made – they want their investment back.  The pyramids drawn are absolutely possible scenarios, but in direct sales, the pyramid shape is the “perfect world” – it is the goal and the plan laid out to follow.  But on the journey of building a business with network marketing, the “shape” of your business will likely change throughout its lifespan.  The best part – even if initially drawn like a pyramid, it is absolutely possible to make more money than the person at the top.  You can also hold a higher title than those who had a hand in bringing you into the company.

As for the “scheme”, this misconception has a background too. 

While they are few, some MLM companies have misrepresented themselves by claiming to provide a product or service but failing to do so.  In these companies, money was made solely by recruiting people into the business and typically there was no way to make more money than the person at the top.  The direct sales industry has been around for over 100 years, and the majority of companies have a legit background, but the bad guys and the “Ponzi scheme” are fresh in our minds.

Other companies have individuals who have presented the opportunity as “get rich quick”, which is a misrepresentation as well.  This should be a reflection of the individual, not of the company.  And keep in mind, some companies may offer incentives of “right now money”, but long-term stability is what you will want to look for to create a solid business & residual income.

The stigma.

Unfortunately, the stigmas have carried over to the entire industry and they are simply not true; you cannot lump every company in an industry into the stigma.  The best way to ensure that the company you are considering is solid is to do some research.  Check out the Direct Selling Association (DSA) database to make sure the company is a member.  The DSA is the governing body of our industry to ensure each member is abiding by the highest level of business ethics and conduct to its consumers.

What network marketing really is: hard work, commitment, diligence, and teamwork. 

If you have ever described yourself with those sorts of words, you can be successful in network marketing.  In fact, you can be so successful that you “promote” faster than the person who invited you into the business and make more money than the leaders who have partnered before you.  Yes, it is hard work, but it is hard work on a part-time & flexible basis which pays off in ways one typically cannot imagine.

The misconceptions are unfair, but when you understand where they come from, you can overcome them.  In fact, you can play a part in turning around those misconceptions, which is exciting within itself.  Keep in mind, when someone asks you these questions, most of us were not raised or educated to understand the concepts around network marketing.  And what we don’t understand, we tend to shun, fear, or exclaim solely what we think we know based on our own personal set of circumstances.

Know who is asking the question and why.

It is your job to figure out who is on the other end of the conversation.  There is no need to be on the defense.  Remember, some will close their minds because they have more of a desire to be right than to be enlightened; their emotional attachment to their belief is strong and it will take their own will to change it.  If you find this person, politely excuse yourself from the debate they will never allow you the opportunity to “win” and move on.  I agree wholeheartedly with this: “you don’t have to attend every argument you are invited to.”

If you are sharing with someone who is willing to be educated, then you have the opportunity to be a part in overcoming the industry stigma and revolutionizing the industry!  There are so many benefits, of which you already know, so your time is best spent on those who want to understand, who want to hear about what this business model can do for them and the people they know.

The greatest obstacle to discovering the shape of the earth, the continents and the ocean was not ignorance but the illusion of knowledge.”  ~Daniel J. Boorstin

  • http://supportyourspouse.com/ Kevin Sanderson

    Great post.  The whole idea of a pyramid scheme is misunderstood, and it is understandable how people get that perception.  The business is different than “mainstream” businesses because it is structured differently.  You cannot blame people for a lack of understanding.  I was there once…

    It is up to the professionals in network marketing to set the record straight by educating those outside of the business and working their businesses with integrity.

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