With all the skittle going around these days about what is legal and what's not... when I saw this article written by Bob Andonila a fellow Shaklee Distributor, I just had to share it with you... This month I thought we could address the age-old question, that still seems
to come up from time to time when sharing this business with others, and
that question is: "Is this a Pyramid?"
If I were holding up a picture like the one on the left, I would understand
why someone might ask this question. However, when we show a person a true
Network Marketing business model, it is really silly for a person to ever ask
this question, especially after they truly understand how this business
works.
This Business is Really All About Leverage.
Let's say that I am an insurance broker and I hire an agent to sell for me.
He goes out and sells a lot of policies during the month and he earns a
commission on each one. As his broker, I also earn a percentage on the total
profit from his sales. Why? Well, I hired him, I trained him, I did some of the
advertising, I had the motivation to get my brokerage license in the first
place and I took some risk to do so. Plus, I helped create this product volume,
in an indirect way, which my agent sold in the first place. My agent does not
work for me as an employee. He just works with me and we both benefit when
he does well.
No one ever seems to have a problem with how this kind of business model
works over the many years that people have sold insurance. In fact, I don't
think they were ever asked if their business was a Pyramid. So this is a form of
leverage for the broker. However, in this form of leverage, it lacks a lot
when compared to the leverage found in the Network Marketing industry.
Here is why:
As a broker, I can hire many agents and increase my earnings by doing so.
However, these agents cannot hire other agents and so they are limited on how
much they can earn. Because of this, some of them may end up doing what I did
and become a broker as well. If I taught them well, this could be bad for me
for two reasons.
1) I lose him or her as an income source and so I now have a drop in my
income level.
2) He or she is now my competitor whom I trained, and they also know all of
my secrets!
But it gets even worse than this!
He or she now hires other agents as brokers and teaches them what I taught
him or her. Thus, I indirectly taught my competition how to compete against
me. What if some of their agents want do the same and become brokers who then
turn around and hire even more agents? Now I have indirectly developed a
chain of competition. This does not only happen in the insurance business, it
happens in every industry and in every conventional business.
The only industry that this does not affect is the Network Marketing
industry model.
Here is why:
In Network Marketing, I want my distributors to become business owners just
like I did right from the beginning. I want to work hard to train them to
reach their core desires for building their income ASAP! It may be so they could
spend more time with their family, travel more, pay off all their debts, or
whatever their reason might be for joining me. The point is I want to help
them get to where I am so that they can do the same for their distributors. In
the process of doing this, we both earn on the same product volume as we did
in the model above. However, it continues to get even better from this point
forward!
The big difference here is that they don't break away from me and become my
competitor down the road, such as in the model above as a broker. Instead,
they become part of my sales organization of which I am paid a percentage on,
based on the product volume their company consumes each month. This is paid to me by the Shaklee home office, not out of my downline's profit.
This is the advertising budget that other conventional companies pay for
commercials and big movie stars to say how great their products are when they
may not even use them. Do you know how much money it cost to run a 1-minute advertisement on TV? In Network Marketing, this advertising budget is shared
with those who use the products and want to take advantage of this offer by
spreading the news of these great products and lifestyle opportunities with
others.
In this case, my distributor is now a company owner just like me and can
sponsor and train others to become company owners like I did for them. When
they do, they earn a percentage on each one, and so do I! They can earn more
money than I do, but I still have an invested interest in their future success!
So I continue to have an ongoing incentive to always help them do better as
well as for their distributors. When I help them grow bigger, I grow bigger
as well.
This is why you hear of some Networkers earning over $100,000 per month,
every month! It's all about leverage! But even those of us earning thousands per
month, it's still a great way to earn a living. After all, we get to help
other people earn their living and as we do, we also can have a life because it
only takes part time effort to do so!
Would you like to earn a great living without having to go out to work
everyday? Would you like to be home with your children instead of having a daycare raise them? This is why network marketing is growing so fast; people want more out of life, such as time/freedom, instead of a 40-50 hour work week for the rest of their lives.
This is where some people ask the question, "Isn't that one of those
pyramids?"
The reason they first ask this is because of the large amount of income
potential one can earn in this industry. They feel there must be a catch in order
for the average person to be able to earn this much money. However, the
main reason is because they think or believe that the people at the top make all
the money and the people down below do all the work. This is simply a misperception of the facts.
Many get this misunderstanding from the old illegal chain letters you may
have received in the mail. This is where you place your name on list that was
sent to you and then you send money to the person on the top of the list. You
then mail out a bunch of them so that your name reaches the top and you make
money. Except you never do, and that is why it is very illegal to do so in
the first place.
Why Network Marketing is Not a Pyramid
First of all, people at the top do not necessarily make all the money, nor
do they always make more than the people they train in their downline. In the
Shaklee compensation plan, Dr. Shaklee designed it so that the ones who do
the work, are the ones who earn the money.
A person could be a Shaklee Director without any recap, (other companies
that they are paid on), but yet runs high product volume, and that Director
could earn more than a Master with 50 companies on their recap! It is a very fair
pay out plan, and that one point, out of many, sets Shaklee apart from many
other Network Marketing companies in the industry.
The geometric shape also cannot be a problem for anyone because it is found
in almost any structure such as your family tree or even the shape of our
government. It is the strongest structure known to man. Every organization is
structured this way so the shape isn't the problem. It's the misperception
that some people have about Network Marketing--that the people at the top earn all the money, which causes them to raise this question.
So, let's look at a company organizational structure that we find in all big
businesses today.
At the top you have the CEO, Chief Executive Officer. Does he earn more
money than the President earns? What about the President, does he earn more than the Vice-President? Do you think any of the Vice-Presidents earn more than
the President or CEO? No, not ever. What do you think would happen if they
did?
This whole process is called delegation. Each level of this structure
downward earns less than the one above it. The staff and employees at the bottom earn the least but yet do most all of the physical work.
The CEO of any corporation earns off the productivity of everyone in his or her corporation whether that CEO hires them personally or whether someone else in the company hires them. The CEO, and only the CEO earns on multiple levels of that company. The chance of a staff member or an employee at the bottom level becoming the CEO is next to nothing.
Do you think any CEO of any company gets asked the question, "Is this a
Pyramid?"
In Network Marketing, everyone starts out as the CEO of his or her own
company. As they build their business, their income increases based on their
effort and time invested. Unlike the corporation model above, everyone gets
compensated for the efforts on the entire organization, not just the CEO.
Here is why leverage is so exciting in Network Marketing when it is built
the right way.
What is the maximum amount of hours per day that you could work..24 hours,
right? If you pulled an all-nighter, you could put in 24 hours. If you never
had to sleep and could do this every day for a whole year, you would have put
in a total of 8,760 hours for the year. So that is the maximum number of
hours per year you could invest, if you did not die before the end of the year
due to lack of sleep.
Now let's say you have a small Network Marketing organization of only 100
distributors and each one works an average of only 10 hours for the entire
week. That is 52,000 hours that you are paid on but yet, you are only working 10 hours per week yourself, like everyone else in your network! For you to put
this same effort into a job, you would have to work 24 hours a day over the
next 5 years without sleep!
Network Marketing is simply the best-leveraged plan out of all other income
earning models. You, as an individual in Network Marketing, are given the
same opportunity to earn on multiple levels, such as brokers do on their agents
or as a CEO of a corporation earns on all levels of his or her company.
However, when you sponsor a distributor in Network Marketing, their success
becomes your success forever because it is intertwined with yours. You both
have an incentive to put in the same effort together as a team. You can't be
fired and everyone has the same exact equal opportunely to earn as much income as he or she desires.
Thus, it is far better to be sponsored into a Network Marketing "Pyramid'
than into any Corporation Pyramid. There is a lot more money being made
available to a lot more people than ever before and it has become a true
profession.
But if everyone gets in, won't the market get saturated?
This is another question that comes up next, so let's deal with it right
now. A lot of people are exposed to many things in their life over time, but that
does not mean they participate in many of them. About the time that everyone
in the entire world has been exposed to a concept, there is always a new
assemblage of people who forgot they heard it. Some may have just moved here, just graduated from school, just lost their job or changed their minds and are
now ready for a change in their life.
Look at how long TV or radio has been around and yet they are still selling
them and people are still getting jobs in that profession. What about the
insurance industry? It has been around for a long time and yet people still find
jobs in this field and they still find people to sell to.
Many people are exposed to Network Marketing many times during their life
before they ever join the industry. Some who do join, are only interested in
using the products at discount prices as a member and may never sponsor anyone else. After all, Network Marketing companies offer some of the very best
quality products on the market. They have to do this or else nobody would
recommend them.
The point is that Network Marketing has been around for over 50 years but
yet less than 1% of the world understands it and so the world is still very
wide open.
Our owner, Roger Barnett, has committed Shaklee to expand into 50 countries
over the next 10 years. We do over $700 million in sales now and we are only
in just 5 countries today. Do you see why now may be the right time for you
to consider entering this industry?
At the very least, check it out and ask the person who introduced you to
this great industry all of your questions. It is a business model that is giving
birth to many successful entrepreneurs today, and can offer you a chance of
a lifetime to not only earn an income that most people dream about, but also
the freedom to enjoy it!
Take a look!
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