From: ogden_jon@macmail1.rtsg.mot.com (Jon Ogden)
Subject: Re: Diff between MLM, Netwk Mkting and Pyramid
Organization: Motorola LPA Development
Date: Tue, 26 Jan 1993 15:28:36 GMT

In article <1993Jan26.044751.1718@cbnewsk.cb.att.com> mparks@cbnewsk.cb.att.com
(michelle.lim) writes:
>
>What's the difference between MLMs, Network Marketing
>and Pyramids?  I undrstand Pyramids are illegal - why?
>
>What the the top network sales products out there?
>How much do people selling these products make?
>Just curious - since I've just recently heard 
>these terms.
>
>Michele
>
 Hi Michele,

First we'll start with what a pyramid is:

    A pyramid is any form of business, selling etc. where the main emphasis is
recuiting people and making money from recruiting them.  Some pyramids don't
even have a product.  All they are is that you pay say $5000 to join and then
recruit others who pay $5000 of which you get a percentage.  Most of the money
however goes to the guy at the top of the pyramid.  In a pyramid (even with
products) the guy above you ALWAYS makes more money than you.  In addition a
pyramid can even be a seemingly legitimate product business where you get
bonuses just for recruiting people, not for sales.  It's illegal cause it's
inequitable.

Now both MLM and Network Marketing differ from a pyramid in these ways:  
  
         * There is product flow
         * Bonuses, etc. are based on sales of products, not sponsoring people.
         * Money (Bonuses, etc) flow from the top down not the bottom up.
         * You are NOT required to keep any inventory
         * It is extremely possible AND encouraged to make MORE money than the
person who
            sponsored you.

MLM and Network Marketing are almost identical except for one small point:

         * MLM's main focus consists of setting up a sales force for selling
the product and
            building basically a sales force
         * Networking (different from Network Marketing) is basically setting
up an
             organization of people to buy products wholesale for their
personal use (this is
             considered to be like a wholesale buying club and is illegal in
some states)
          * Network Marketing is somewhat of a hybrid of the two.  It consists
of setting up
             an organization who does a lot of personal use of products and
also some outside 
             sales is involved.  It's main focus is on setting up the
distribution network and then
             those involved can run their own business however they want.

Networking and Network Marketing essentially require one to have a corporate
supplier that has a large product line.

The biggest type of company such as this is the Amway Corporation in Ada, Mi. 
They did 
4 billion in sales last year and have a product line of over 15000 products
from around 700 manufacturers.  They are a debt free company, their owners are
each worth about 3 Billion, the company owns 60% of Peter Island in the
Carribbean, etc. etc.

Other companies are Avon, Shakley, NSA among others....There are at any time
maybe 3000 companies using the "MLM" style of business.  Many are here today
and gone tomorrow.

How much money can one make?  A LOT.....Personally I am involved with
Amway....While I have yet to make the big bucks, I have friends who make more
money in two weeks than I do in a year (no joke)!  We talk in our business plan
about making $100,000 after you reach a certain level....In actuallity that is
the mathematical minimum at that level...That's all we are allowed to tell
(gov. regulations).  In addition Amway's plan is the plan the government uses
as a benchmark to determine wether or not a company is a pyramid.  With such a
diverse product line, I can purchase almost everything I need (clothes, snacks,
soap, vitamins, electronics, etc.) from my own business.  The only thing I need
to go to the store for is perishable foods.

What are chances of success?  Well unless the company you get involved with
fails, it is totally dependent on you.  Anyone can do an MLM/Network Marketing
Business and be successful if they just work at it.  It takes time and it is
NOT a get rich quick scheme.  It takes work, a lot of work, but the payback is
amazing.

Sorry this is so long, but I wanted to try to define things clearly.  If you
have more questions, I'd be happy to continue the discussion off line via
e-mail.

Regards,

Jon Ogden
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Whatever the mind of man can conceive and believe he can acheive.