Network Marketing:
Real Business or Real Scam?
What it is and what it isn't.

The Sheffield Report

by Michael L. Sheffield
CEO The Sheffield Group

In order to understand what network marketing is you also have to understand what it isn’t.

Network marketing isn’t a pyramid scam. Pyramids are programs similar to chain letters where people just invest money based on the promise that other people will put in money that will filter back to them and somehow, they’ll get rich. A pyramid is strictly a money game and has no basis in real commerce. Normally, there’s no product involved at all, just money changing hands. Modern-day pyramids may have a product, but it’s clearly there just to disguise the money game.

Network marketing is a legitimate business.
It’s based on providing people real, legitimate products they need and want at a fair price. While some people do make a lot of money through network marketing, their financial benefit is always the result of their own dedicated efforts in building an organization that moves real products and services.
A pyramid is illegal and is based on taking advantage of people. For a person to actually make money in a pyramid scheme, someone else has to lose money. But in network marketing, each person can multiply his or her efforts, skill and talents by helping others to be successful. Network marketing has proven itself as part of the new economy and a preferred way to do business here and around the world.

Network Marketing isn’t about taking advantage of your friends and relatives.
Only a few years ago network marketing meant retailing to and sponsoring people from your “warm list” of prospects. Although sharing the products or services and the opportunity with people you know is still the basic foundation of the business, today we see more people using sophisticated marketing techniques such as the Internet, conference calling and other long-distance sponsoring techniques extending one’s network across the country.

Network marketing isn’t a get-rich-quick scam. Of course some people do make large amounts of money very quickly. Many would say they’re lucky. But success in networking isn’t based on luck. Unfortunately, money won’t sprout wings and fly into a new distributor’s bank account no matter what someone has promised them. Success in network marketing is based on following some very basic yet dynamic principles.

Now let’s discuss what network marketing is.

Network Marketing is a serious business for serious people.
It’s a success formula. It’s a proven system where the design, creation and expense the corporate team has gone through becomes a road map for the distributors own success. They just need to follow the simple, proven and duplicable system that a good company provides.

Network marketing is leverage. The reason is that independent distributors can leverage their time and increase the number of hours of work effort on which they can be paid by sponsoring other people and earning a small income on their efforts. J. Paul Getty, who created one of the world’s greatest fortunes, said “I would rather make 1 percent on the efforts of 100 people than 100 percent on my own efforts.” This very basic concept is the cornerstone of network marketing.

For example, most successful people building a network marketing business do so in an organized method. They work a few dedicated hours each week with each hour of effort serving as a building block for their long-term business growth. Then they sponsor other people and teach those people how to sell the company product and sponsor others who duplicate the process.

By helping the people personally sponsored to sponsor others, your distributors duplicate themselves. As this process continues, they create geometric growth that can lead to hundreds or even thousands of people coming into their (and your) business. They leverage their time by helping others to be successful and earn an income from all their combined efforts.

Network marketing is a low overhead, home based business that can actually offer many of the tax advantages associated with owning your own business. And with network marketing your distributors have limited capital requirements, fewer geographical limitations, no or low minimum quotas required and no special education or skills needed.

Network marketing is a people-to-people business that can significantly expand the distributor’s circle of friends. It’s a business that enables them to travel and have fun as well as enjoy the lifestyle that extra income can provide.
Every type of marketing has it critics. Network Marketing is no exception. Educating your downline distributors and customers on the benefits and rewards of being involved in this great industry should be at the top of your list of your regular communication content.



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About the Author:

Michael L. Sheffield is the CEO of The Sheffield Group, a full-service direct sales and multi level marketing (MLM) consulting firm. He is a Co-Founder and Chairman Emeritus of the Multi Level Marketing International Association and in 2001 he was inducted into the MLMIA Hall of Fame. He and the Sheffield team have assisted in hundreds of national and international MLM corporate start-ups as well as offered a full line of services for established direct sales companies including consultation on MLM Website development. As the most noted expert on compensation plans, he has been a guest lecturer on the subject for the DSA, University of Illinois, University of Texas, Berkeley and Harvard Alumni Association. He has helped launch over 200 new products marketed by direct selling companies around the globe. He can be contacted at 480-968-6199, The Sheffield Group, 2239 N. Hayden Road, Suite 103, Scottsdale, AZ. 85257, website address:


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