Network Marketing or Pyramid Scheme - BizBasket's view

Network Marketing of Pyramid Scheme - A differentiation

Network Marketing is sometimes referred to as a direct selling or multi-level marketing (MLM) company. In the past some MLM companies have tarnished their reputations by very shady business practices. People are confused between Network Marketing and Pyramid scheme. The Bizbasket Team thought of putting some light on this crucial subject.

A genuine network marketing company will have

1. A good product or service at a reasonable price
2. The ability for you to make a profit on the sale of the product or service
3. A dynamic company support system with well developed marketing materials
4. Good training for you to learn about the product/service

Well, pyramid schemes sometime look like network marketing, but here is the difference. There is no product or service, or if there is it is priced too high to be reasonable. You make money by signing people up and not by selling a product, and you cannot earn more than the person that recruited you.

In a network marketing company you are rewarded for you efforts. It is entirely possible for you to earn more than the person that recruited you. Yes, it's true they may get a small commission on your sales, but you get a whole lot more. If you sell more than they do you can end up making a lot more than your upline. This is never true in a pyramid scheme.

In India pyramid schemes are banned by a law named as "THE PRIZE CHITS AND MONEY CIRCULATION SCHEMES (BANNING) ACT, 1978". In our coming articles we will be educating our viewers about the key sections of this law and its interpretation in various cases related to Network Marketing/Direct Selling/Multi Level Marketing which came for the trial in different Indian Courts of Law.