Network Marketing, first known as multi-level marketing, is a subject people either hate or love with a passion. The haters see multi-level marketing as a pyramid or ponzi scheme designed to beguile and plunder hapless people with its hyped promises of riches. People who love multi-level marketing view it as a real and tangible way to create a financial and personal lifestyle once beyond their reach.
The legality of multi-level marketing was decided in 1979 in the landmark case FTC vs. Amway. In a nutshell the Federal Trade Commission in 1975 charged that Amway imposed restrictive product pricing and marketing methods that made it unlikely for a distributor to create a viable business. In essence, a pyramid scheme. The court ruled in 1979 that the Amway opportunity was a legitimate form of business but did have to amend their pricing and marketing processes.
So, what is network marketing really? Is it a business of hype or a business of promise?
Multi-level marketing is the promotion of a company’s products and services through a lineal generation of personal customers. A distributor is someone who promotes the company and builds a personal network of customers. The company compensates a distributor based on total sales and leadership development of their customer network.
I believe the major objection to network marketing is the fact that most people do not make any money. Most who object to multi-level marketing see this statistic as proof the industry is a failure and the public should be shielded from ever pursuing the opportunity. Without doubt people do fail but it is not exclusive to network marketing.
One of the biggest challenges for the industry is to dispel the perception that network marketing is a quick and easy business to build. In reality it’s as challenging as any brick and mortar business. As the industry matures, many companies are fostering more professionalism within their distributorships and counseling their distributors away from too much irrational exuberance. Because of this professionalism, more career professionals are viewing network marketing as a viable career change opportunity.
The greatest benefit network marketing offers is the promise. Like the wagon trainers of the old west, there is the promise you can create something or reach somewhere. Some will not try, some will quit early, some will perish along the way, and some will reach their destination. Without the promise, there’s not much will or dedication to try.
Regardless of your opinion, network marketing has been accepted worldwide and will continue to flourish where people desire the opportunity to create the financial and personal lifestyle of their dreams.