Network marketing ,direct selling and pyramid schemes these all are very confusing terms. People often think all three are same but they are wrong with their opinion. All three are not same. Let us start with direct selling. In direct selling manufacturer sell their product not to middle man but consumers. While in pyramid scheme those who are on the top of pyramid they get most of the benefit.no matter what their subordinates are getting. Now here comes third concept which named as network marketing it is not direct selling because you need not to sell any product to consumer. It is not pyramid scheme because subordinates can get greater amount of income to what their seniors getting. How it is possible well it depends on the plan of particular company. The slide difference in plan can make it either network marketing concept or pyramid one.
For the sake of better understanding let's take an example. In pyramid scheme every member has to sponsor it's programe two to three members. Every member has to pay a membership fee . It is recurring in nature . Now every one has to pay same amount. And some fixed percentage has to go to their sponcers. So the person who is on the top eating some percentage from every member's membership fee. Will be getting highest income.
Now ,let's talk about network marketing company . All truely network marketing based conectarte are based on some products those are consumable. Like daily needs products. Consumable products are the soul of network marketing. If the product on which your company's plan stands are not consumable products . Either you are in direct selling or you are in pyramid scheme. Why product should be consumable ? Why so. If product is not consumable in a fixed amount of time. Then there is no need to buy it after every fixed amount of time. No need means no selling after a point. No selling means no recurring income. No income means no recurring payments to its promoters. No recurring payment means no motivation to expand further. Means sutterdown company close. Or it has to apply membership fee to pay it's promoters every month .The moment it applies membership fee it will fall in pyramid scheme.
So to be careful first step to check before joining a so called network marketing company is to check whether it's products are consumable or not.
Rest is in later post till then keep reading good stuff. See you soon.
For the sake of better understanding let's take an example. In pyramid scheme every member has to sponsor it's programe two to three members. Every member has to pay a membership fee . It is recurring in nature . Now every one has to pay same amount. And some fixed percentage has to go to their sponcers. So the person who is on the top eating some percentage from every member's membership fee. Will be getting highest income.
Now ,let's talk about network marketing company . All truely network marketing based conectarte are based on some products those are consumable. Like daily needs products. Consumable products are the soul of network marketing. If the product on which your company's plan stands are not consumable products . Either you are in direct selling or you are in pyramid scheme. Why product should be consumable ? Why so. If product is not consumable in a fixed amount of time. Then there is no need to buy it after every fixed amount of time. No need means no selling after a point. No selling means no recurring income. No income means no recurring payments to its promoters. No recurring payment means no motivation to expand further. Means sutterdown company close. Or it has to apply membership fee to pay it's promoters every month .The moment it applies membership fee it will fall in pyramid scheme.
So to be careful first step to check before joining a so called network marketing company is to check whether it's products are consumable or not.
Rest is in later post till then keep reading good stuff. See you soon.
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