Ah yes, the age old “is it a pyramid scam?” question.  Is MLM or Network marketing just a pyramid scam or is it a viable business model?  In this article we will explore the pros and cons of network marketing / MLM in an attempt to shed some light on and answer this and other question.

There are many delusions about network marketing floating about in both the real world and here in cyberspace.  To answer our question we must first examine and seek to understand exactly what network marketing is. 

Throughout history the sales and marketing of goods and services has traditionally been performed in a fashion whereby the sales person receives direct commissions on their sales only.  Of course the office manager or sales manager frequently gets an override on the sales of everyone in the office or under their direct supervision.  On top of that any regional or district managers usually get compensated or rewarded based on sales volume as well.  All network marketing is; is a means to pay direct sales people a commission for getting other direct sales people involved and trained to sell a product and service.  Overrides or production bonuses in MLM are tied to the sales force that an individual participant is responsible for creating, both directly and indirectly, to a specified number of levels within the sales force structure.  It is not inherently good or bad.  It’s done all the time in cyberspace and it’s done both on and offline by many of the largest companies in the world.  So in and of itself the means by which a company pays its sales force is neither good nor bad.  This applies to network marketing / MLM compensation plans as well.