Introduction
The pyramid structure is commonly associated with the term ‘scam business’. It invites low levels of credibility and labels your network marketing business structure as questionable and untrustworthy.
Ironically, many profitable and sustainable businesses utilise the pyramid structure and have been successfully running it for years. This indicated a simple fact that we should worry less about the pyramid business model and more about how it is created or sustained. A pyramid business model is common and frequently used by businesses of different sizes and teams within them. The problem is not with the pyramid structure as such, but the way this business model makes money. Let’s read more to understand how to spot trouble and when to accept the legitimacy of a business. This article will make it easy for you to understand the key differences between a legit MLM business and a fraud money-making pyramid scheme.
Issues with “Perception”
The network marketing industry is indeed a highly perceptually challenged industry. In India, there is a lack of awareness because of misinformation spread by the media leading to general wariness about the network marketing industry.
If you type in the keyword “Network marketing” in the search panel of Google, it will return more than a billion search results.
Each of these pages in the result page has a new perspective on this much misunderstood, much debated, much-maligned network marketing industry.
Moreover, while consuming information about this industry from any article on the internet, a person would never perceive information exactly as the author intended the reader to perceive it.
More than 50% of these search results talk about scams. It narrates stories and examples of how the network marketing industry has caused the downfall of various economies and how the “Victims” of these companies have lost millions. These articles also provoke readers to reject products or people from the direct selling or network marketing industry. Since network marketing is purely based on “Word-of-mouth marketing”, it makes trust and understanding by people much harder. It also means that if 5 million people promote this business, they would explain this to other people in 5 million different ways. It may lead to misrepresentation and misconception if the person who is marketing doesn’t do it the right way.
MLM scheme vs Fake pyramid scheme: 7 major differences
Let’s check 7 major differences between a legitimate MLM direct selling company and a fake pyramid scheme business.
1. Get-rich-quick business
| Legit MLM direct selling business | Fake pyramid scheme business |
| 1. Direct selling may be profitable, but you need to work hard to get that profit. 2. It will always help you understand that you can get the desired output only when you put in the required time and effort. | Before joining, a company or business that promises easy money should be studied thoroughly. |
2. Product quality
| Legit MLM direct selling business | Fake pyramid scheme business |
| 1. Deliver quality product quality. 2. Spend millions on research and development to create exclusive, innovative, high-quality products tailored to meet people’s needs. | 1. Offers showcase products mostly of extremely low quality for your initial investment. 2. Have just namesake products to have the pyramid scheme working in the background. |
3. Commissions through recruitment
| Legit MLM direct selling business | Fake pyramid scheme business |
| Here, network marketers don’t earn commission by recruiting more people but by making sales. | There is no profit for you unless you have successfully recruited others into the company. |
4. Restrictions on the compensation plan
| Legit MLM direct selling business | Fake pyramid scheme business |
| 1. Have fair compensation plans to create equal income opportunities for all. 2. Sometimes a recent recruit makes more money than a seller on a higher level. It is all based on the number of sales a direct seller makes. | 1. Here, those who came in first make most of the money. 2. New members hopelessly fall behind because they were recruited when the money pool had been depleted already. |
5. Training system
| Legit MLM direct selling business | Fake pyramid scheme business |
| 1. Have a solid training system and emphasis on training their network marketers. 2. Have qualified trainers who help their members understand the business and products. | 1. Do not emphasise on training. 2. Even if they do, they only train sellers to recruit more people because that is the only way the upper level of the pyramid will be profitable. |
6. Provision of relevant business tools for direct sellers to grow their business
| Legit MLM direct selling business | Fake pyramid scheme business |
| 1. Helps you to keep track of purchases, commission earnings and the status of product deliveries. 2. Offers proper customer support. 3. Regularly release product information and promotional offers. 4. Engage sellers on social media to help understand the products and business. | They do not offer enough material or appropriate business tools for their members by any means. |
7. Policies, procedures and ethical marketing codes
| Legit MLM direct selling business | Fake pyramid scheme business |
| 1. Any legitimate company’s business policies and procedures are clearly stated in black and white, binding every network marketer to strict regulations. 2. They strive for strong long-term growth and stability through ethical marketing. | 1. No strict and fair rules are made and abided by. 2. It takes away the company’s credibility and is extremely risky for any seller or customer to be involved in. |
Conclusion
QNET is a legitimate MLM scheme and NOT a fake pyramid scheme, as it showcases all the characteristics of a legitimate business.
Moreover, QNET has tie-ups with some of the most credible associations in the world, such as with SHARP Business Systems, something that only a legitimate and trustworthy direct selling company can manage to have.
As they say, Knowledge is power. So, the next time someone gives you one reason why they think your network marketing business is a scam, you can give them seven reasons why it isn’t.
FAQs
Check out these FAQs (Frequently Asked Questions) about QNET and its direct selling business model.
Business model-related FAQs
Product-related FAQs
Learn more about QNET India products and the business opportunity it offers.
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