When I first tell people I am involved with a network marketing or multi level marketing company, one of the most common questions I get asked is ‘is it a pyramid scheme?’ I then ask what do you think a pyramid scheme is, and the questioner is usually left stumped as they don’t actually know. It is just a phrase commonly associated with this sort of business, and they vaguely think of it as something that is illegal and not very positive.
What is a Pyramid Scheme?
Well, in order to understand and answer the question, first you need to understand what a pyramid scheme is.
According to The Free Dictionary the definition of a Pyramid Scheme is “A fraudulent moneymaking scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them. Eventually the number of new recruits fails to sustain the payment structure, and the scheme collapses with most people losing the money they paid in.”
Schemes like this are illegal, and the only person that can ever make any money from them are the people at the top. They are unsustainable and doomed to failure.
How does Forever Living differ from a Pyramid Scheme?
There are many reasons why Forever Living is not a pyramid scheme , the more obvious ones being
- When you sign up as a forever business owner you do not pay any money to the person who recruited you. You enter your own contract with Forever Living directly either by purchasing some products or buying a business owner box.
- The business owner box or evaluation pack you can buy when you first join is a box of products and literature which you can use to get your business started. The value of the items in the box is actually far higher than the price you pay for them. There are no ‘fees’ to pay in order to join.
- Everyone buys products from Forever Living to re sell at exactly the same price. If you have bought the evaluation pack then this is at a 30% discount.
- Forever Living has been trading since 1978. The company is cash rich and debt free and operates legally in over 155 countries worldwide.
- You are paid a commission by the company based on the activity of the forever business owners you introduce. The more people you introduce, the more you get paid. However you can make money purely by selling products if that is what you wish to do. There is no obligation to recruit your own team.
- It is possible to earn more money that the person who recruited you. If you work hard and build up your own team then you will be the one to reap the benefits of your own hard work.
- If you decide that Forever Living is not for you, there are terms and conditions which permit you to return and be refunded for products which you have not sold, within reasonable time constraints. There is also a 14 day cancellation guarantee which allows you to get your money back if you change your mind.
- If you treat Forever Living like a serious business then you will be paid in kind. If you treat it like a hobby then you won’t and may even spend more than you earn.
The reason Forever Living is confused with a pyramid scheme is there are similarities in the shape of the structure of the teams. However if you have a traditional job think of the hierarchy there with a company director, managers, supervisors and staff. Isn’t that a pyramid too? Don’t confuse the structure of the company with the illegal pyramid schemes. it is just an unfortunate shapely coincidence.
Just for fun…..
I also love this cartoon on YouTube about network marketing – it has a creepy Steven Hawking type voice over, but I love the sentiment behind it.