“Oh, this is one of those pyramid schemes…right?”

If you are like me, you absolutely CRINGE when those words come out of the mouth of someone you are talking to about the business opportunity. And as a new consultant, just talking to friends about what I was doing was a stretch - much less when one of my closest friends said to me, “You DO know what you are doing is illegal, right?”







I will never forget it. Here I was all excited about my new party plan business - I had a wonderful product and business that I wanted to share with the people in my life who I most cared about and this was the comment from one of my best friends. I can remember feeling shocked, embarrassed, confused AND tongue tied. I stuttered something incoherent like, “Gee, I don't think this company is doing anything illegal - but I guess I don't know. I sure wouldn't have joined if I thought I was doing something wrong…”



Do you know how to respond when someone assumes that your direct sales/party plan business is a “Pyramid Scheme”? Do you know the difference between a legitimate MLM company and a Pyramid Scheme?



Well, it is actually pretty straight forward.



In a pyramid scheme - there is no product involved. Recruiters earn money just for signing other people up. If there is product involved, it changes hands only within the organization - between consultants and consultants are encouraged to order large volumes of inventory - much more than they can ever sell.



In MLM - no money is made just for signing someone up. That person actually has to sell product in order for the recruiter or upline manager to begin earning income.
This is the short version - but in general all you need to know in order to answer someone who questions the legitimacy of your company.





If you would like more detailed information on Pyramids - I encourage you to cut and paste the link below:
http://www.ftc.gov/speeches/other/dvimf16.shtm