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Topics > Marketing Tools > ID: 1998

MLM/NCM VS. PYRAMID

Posted Date: Jan 16th, 2009 12:13 | Hits: 453

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  • boomerbud
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     The recessionary times we find ourselves now involved in has brought an onslaught of new online companies. We have to emphasis once again a question that has entered quite a few minds over the years mlm/ ncm or pyramid? The key difference between a mlm/ ncm program and an illegal pyramid is that multi-level or national coop marketing actually move a valuable product or service, and all payouts are made for sales of the product or service, not on recruitment. By contrast, an illegal pyramid usually offers no product that has any value, and it operates on the principle of making payments for recruiting others. So generally, only money moves through the network created by a pyramid, and no one gets any valuable product in return for the money that is paid.
Other major differences are that in mlm/ncm there are consumers who want to purchase a product or service, and consumers do not have to become distributors to make a purchase. Also , distributors do not have to buy the product to market it, although most do. By contrast, in the pyramid, everyone has to join the network to participate.
The differences are also obvious in the results of participation. In a legitimate mlm/ncm program, everyone benefits, because consumers get valuable products and services, while those selling them reap rewards for their marketing efforts- and these rewards can be great indeed, because of the team building multiplication effect. The pyramid is a get rich quick scheme in which only a few people benefit, because they got involved first. They acquire the money which flows up the pyramid. But when the inevitable saturation occurs, the people at the bottom run out of new prospects and lose money.
This information has been available since the late 1940's when the first mlm companies came into being, Nutrilite Systems and Stanley Home Products. For a time there was some question about the legality of mlm sales plans, and Amyway ended up battling the U.S. government for a decade. But in a 1979 decision, Amyway's multi- level plan got a clean bill of health. Since then, the floodgates have opened, and thousands of new mlm companies have emerged. More are coming online everyday and some are questionable, so this comparison might be helpful to those trying to make the right business decision.

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Member's comment

pplcheryl63  Jan 16th, 2009
I suggest that everyone do their due diligence on any company they are thinking of joining. Find out the negatives but also the positives. I've seen many reputable companies blasted on rip-off report including my own. But normally with a reputable company the rip-off report is generated through on of two things.

Sour grapes by someone who failed at it or consumers who bought from a "bad" associate/agent. On the other hand I've seen gullible people give a scam glowing endorsements.

Put together the complete picture first.


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