pyramid schemeAs certain as we are that the world turns, we also know that as network marketers, we are guaranteed to be asked this one notorious question – “Isn’t that a one of those pyramid schemes?”

For me, it happened yesterday while having a beer with a friend.  It was not the first time it has happened, in fact it was not even the 10th time it has happened, but I thought it would be the perfect time to tackle that issue on my blog with it being so fresh in my head.

How you react to this question will have a big impact on how the conversation goes.  Many times, people react defensively.  This is the WRONG approach.

When my buddy started with the pyramid talk I calmly said:

“Pyramid scheme?  Aren’t those illegal?”  I then proceeded to inform him that the definition of a pyramid scheme is a situation when money is changing hands but no product or service is returned.

At that point I felt like I was doing to much of the talking, so I followed up by asking:

“What has happened in your life or what experiences have you had that make you think all network markting companies are a pyramid scheme?”

I was digging here to see if he was just blowing smoke, which people often times are.  People also enjoy making you dance when they know you are in network marketing.  They probably don’t know much about it, so they bust out the generic pyramid scheme talk and see how you reply.

When you can calmly reply, and explain the difference, then follow up by asking them a question you will remain in control of the conversation.  You are refusing to dance!

Other Points…

The conversation took a few twists and turns.  At one point, he asked:

“If I sign up from you, then start doing good work, do you benefit?”

I said absolutely!  He said, Boom that’s a pyramid!  He thought he won…

I said listen Rob, Legitimate companies will not pay distributors solely for recruitment.  Take the recent Fortune Hi-Tech debacle for example.  They paid out 90% for recruiting, and only 10% on product sales.  That ratio is not healthy, and good, reputable companies will be the exact opposite.

traditional pyramid schemeI said Rob.  What happens if our buddy Josh (owns a fine dining restaurant) appoints a wait staff manager, and that person works directly with the waiters and waitresses and really connects with them, gets them to work hard and they are extremely pleased with the outcome, and then Josh gives the wait staff manager a bonus or a raise?  I asked, is that a pyramid scheme?  The wait staff manager is getting rewarded for other people efforts.

I then took the conversation to the corporate world.  Take a look at the diagram above to visualize what I am referring to.

If the middle managers bust their butts getting the hard working employees below them to do the same, the vice president and president are going to be rewarded for the great leadership skills, while the employees at the bottom that are working every bit as hard do not reap the rewards.  They are working so hard to fulfill someone else’s dreams.  In the meantime, they are living paycheck to paycheck just to make ends meet.

A lot of this goes into mindset.  Some people are employees, and are happy to be an employee.  There is NOTHING wrong with that.  However, some people envision more, and that is okay too.

Just know that if you choose the life of an entrepreneur, and especially network marketing you will be faced with challenges along the way.  The pyramid scheme line of questioning is certainly one of those challenges, but if you stay clam, and speak confidently you will remain in control of the conversation.  If you dance, you have no chance of getting through to that person.

I hope you found this post helpful.  Check back often for more network marketing tips to help build your business.  Please comment below and let me know your thoughts.  Also, feel free to share via social media if you think others would find this helpful!

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Til Next Time!

Josh Parker
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