7 Myths & Truths About Network Marketing (+ Free Guide)

by | Jan 18, 2018 | Business Development, Personal Development + Life Design | 4 comments

So you’ve heard about Network Marketing (maybe even from me) as being a viable way to create wealth. You’re intrigued, but for some reason Network Marketing makes you feel little uneasy.

In my experience, I’ve found that 7 myths usually create an uneasy haze in people’s mind (I know it did with mine), and can stop you from truly evaluating if it could be fit for you.

 

Myth #1 -> NWM Is A Pyramid Scheme

 
Often the pyramid shape of a NWM organization worries people.  However, if the shape of the organization determined if a company was pyramid scheme or not, all government, churches and most businesses would fit into that category because they all have a pyramid structure.

So it’s not the shape of an organization that determines legality.

What is a pyramid scheme exactly?
 
Webster’s Dictionary:
 
“a form of investment (illegal in the US and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones.”

In other words, pyramid schemes are money games, with no exchange of product or service.

What is network marketing? (aka direct selling, multi-level marketing or MLM).
 
“a marketing strategy in which the sales force is compensated for the sales of products or services they generate, and for the sales of products or services of other salespeople that they recruit.”

The big difference is whether a product or service is being sold or not.  An illegal pyramid scheme provides no products or services and pays according to how many people you recruit and/or the money they are putting into the system (think gifting circles, the airplane game etc).

Legal network marketing programs offer quality products and services that are sold to consumers. Enrolling new members allows for increased income based on the volume of sales in the entire team.
 

Sales of products or services is the important factor in calculating income, not the number of recruits.


 
Other laws legitimate network marketing companies follow include publishing average income statistics, no inventory requirement and refund options.

Additionally, many network marketing companies are publicly traded on the NASDAQ or NYSE.  I find this one of the easiest ways to explain that why network marketing isn’t an illegal pyramid scheme – you simply can’t be listed on the NASDAQ or NYSE if you are an illegal pyramid scheme.
 

Myth #2 -> The Person At The Top Makes All The Money

 
Interestingly, this sentence more accurately describes a job.  A CEO always makes more than all employees – even if it’s sometimes arguable that some employees works harder and longer than the CEO.

In fact, that was one of the main reasons I wanted to start my own business – so that my time, focus and work ethic could go towards creating my own financial success, not someone at the top.

In NWM, you’re rewarded for your efforts – if you work harder than the person/people above you, you’ll make more than them. It also doesn’t matter when you join (ie you don’t have to get in at the beginning).

For example, in my first network marketing company I surpassed my sponsor’s income.  He had joined the company 6 months before me.  In the current company I’ve been with for 15 years, I also surpassed my sponsor’s income – and they had joined 5 years before me.

 

Income is based on your own efforts, time and focus, not on your position or when you joined the company.

{click to tweet it!}
 
 

Myth #3 -> You Have To Be A Sales Person And / Or An Extrovert

 
Nobody likes to buy from a pushy sales person and I would venture to guess that you wouldn’t want to be a pushy sales person.  While there are people like that in ANY industry, that doesn’t have to be how you are.
 

The best and most successful network marketers that I have known are good listeners, solution finders and not at all pushy – you like and trust them and therefore want to buy from them.


 
A good network marketing company’s products tend to be higher quality and unique to what you can find elsewhere (their niche). If you join a company, it should be because you are passionate about the products, use them yourself and believe other people will benefit from them as well. It’s always easier to recommend something you believe in, without feeling like a pushy sales person.

And finally, while there are many extroverts in NWM (and any industry), there are an equal amount of introverts. For example, I’m an introvert. You can be enthusiastic, reserved, an extrovert or introvert – you get to be you. What is most important is a belief in what you are marketing, caring about others and an ability to listen and see if you can provide a solution.

 

Myth #4 -> You Have To Talk To And Alienate All Your Friends And Family

 
While many of my friends and family are on the products, most of them are not in the business. And 98% of my business hasn’t been built from people I know, but from someone that starting taking the products or started the business who then introduced someone else, who then introduced someone else etc.

More importantly, there are so many ways to build a NWM business, if you treat it like a real business. For example, if you loved ice-cream and opened up an ice cream store, would you only approach your friends and family to become customers?
 

Or, would you talk to people in addition to your friends and family, try advertising, networking, strategic partnerships, online marketing – and many other smart and fun ways to build your business?


 
In my first NWM business, we had just moved to Australia and I didn’t know anyone except for my husband and in-laws. So I ran an advertorial. 6 people I had never met previously joined from that ad, and from those 6 people – I built my entire Australian organization.

For my second NWM company, we were living back in the US and so I initially started building with with friends and family, and then doing what I loved (teaching dance). Then in 2011, took it online.  

I personally recommend a combination of friends, family, building your business around what you love and online strategies – but there are many other modern ways to build a hugely successful NWM business.
 

Myth #5 -> The Market Will Become Saturated

 
Saturation is impossible because the world’s population is always growing, with new people being born every day. As of January 2018, there were 7.6 billion people on the planet, with another 1 billion people being estimated by 2030. We won’t be running out of people anytime soon.

Another great way to look at the myth of saturation: Do you know anyone that doesn’t have some kind of digital device? Almost everyone already owns a computer, laptop, smart phone or iPad, but that doesn’t stop Apple from making more – because there are always new and existing customers to sell to.

When you have a great product (and a company that keeps innovating) that makes a difference in people’s lives, you will always have new and repeat customers.
 

Myth #6 -> You End Up Selling A Product That Is Over-Priced And That No One Wants

 
Just like in any industry, some companies do sell over-priced products that there isn’t a market for.

However, a good NWM company will be marketing products that are high quality, priced at what people will pay for their value, and are products that people need and want (if that isn’t the case, don’t join that company!)

One of the best features of NWM is the residual income – which comes from customers and associates re-buying products. Customers will only re-buy products if they love them and notice a difference using them – hence why I believe consumable, high quality and unique products to be one of the most important things to consider when evaluating a network marketing company.
 

Myth #7 -> NWM Doesn’t Work

 
In 2016 alone the direct selling industry grossed $183 Billion worldwide. It’s one of the fastest growing segments in the Global Economy and ranks higher in global sales then the music, movie and gaming industry, the NFL and organic products.

NWM has also produced hundreds of thousands of millionaires and many more 6 and 7 figure incomes – rivaling other industries for the amount of millionaires produced.

It’s true however that not everyone succeeds at network marketing – but that’s true of any industry. Many business owners, bloggers, Amazon sellers, yoga teachers don’t do as well as they would like, fail or quit, but you don’t hear people saying that business ownership, blogging, Amazon or yoga doesn’t work.

There are also different kinds of success. Some NWM’ers want to earn a huge income – so they put extra and consistent work, time and focus into their business.

 

Some want to make enough income to stay at home with their kids, have extra money for travel, add an additional income stream to their wellness center, or pay off debt.


 
Success should always be measured by what your personal goals are and what is most important to you…not necessarily if you became a millionaire through NWM (unless that is your desired goal and you’re committed to doing the work it takes).

 

Bonus Myth #8 -> NWM Is A Get Rich Quick Scheme

 
Exactly the opposite. Done correctly, NWM is a get-financially-free-over-time with work, focused effort, consistency and personal growth. But that goes for building any business, or anything worthwhile.

When I was faced with the idea of climbing the corporate ladder over the next 40 years to make another business owner or company wealthy – the idea of putting my own work ethic into building my own business made much more sense. If you’re going to work hard – wouldn’t it be better to put it towards creating your own time, financial and creative freedom?

Choosing to do NWM was one of the best decisions I have ever made all those years ago, however I almost didn’t even LOOK at the business model because I had so many “myths” and assumptions floating around in my head. I hope this has helped dispel some of those same myths so you can evaluate if NWM is fit for your own personal goals and where you want to head.
 

Over to You

 
What do you think about the above NWM Myths?  Do you have any others that have been wondering about? What would be your personal reasons and goals for doing NWM?
 
Share below – the best insights happen in the comments when we share our ideas and strategies. I personally read every single comment and and always respond – I love to hear.
 
Lots of love,
 

Carmen xo

 
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