Network Marketing - Legitimate Business or Outright Scam (Part 1 of 3)

Wanna know the fastest way to anyone avoiding you like the plague? Introduce yourself with this line " Hey I'm Ken. You look like an ambitious fella...do you have about half an hour for me to show you how you can make big bucks and own your own yacht? I've got...."Sorry, I didn't finish the sentence; chances are you're not going to get very far before your audience gets that STRONG whiff of fishiness.

Despite all the stigma attached to network marketing, the honest truth is that people in general don't have much working knowledge about network marketing. Everyone probably knows someone who has been involved or is still innvolved in the industry, but the question is, how much about the industry do you know? What then, is the final verdict on this unpopular industry? Over the next 3 posts, I hope to lay enough facts down on the table so you as a reader can make an informed judgement or decision when it comes to Network Marketing

1. Network Marketing comes in many shapes and sizes
You might not be familiar with the term Network Marketing, but i'm sure you've probably heard of following terms, direct selling, multi-level-markting, Amway selling...these are all referring to the same industry style, namely, create a giant organization of people that act as your downline, and have them purchase from you or sell to others to earn commissions from the total sales.

Think network marketing primarily encompasses ntritionals and household items? Think again! Network Marketing practically covers every industry available, from airline ticket bookings, to utilities, to pet-care products and even down to legal services!

2. Network Marketing will become a trillion dollar industry very soon (if not already)
Like the automotive , IT, and health industry, total Network Marketing related revenues in will possibly reach the trillion dollar industry by the end of the decade. For every 20 companies that go bust in this industry each year ( and there are many!), 1 will stand the test of time and continue to grow into a highly profitable entity that lasts longer than 15 years. Nett total growth is certainly being achieved, but whether it is proportional to our population growth is something yet to be determined.

3. Network Marketing is a legitimate business model, highly regulated by the FTC
Contrary to the beliefs of many, network marketing cannot be classified as a scam the same way Ponzi Schemes or pyramid schemes are. On the contrary, it is a highly regulated entity that is monitored closely by the Federal Trade Commission. Sure profits of the organization rely heavily on efforts by overzealous distributors and driven sales representatives, but all these need to be done within legal boundaries clearly lined out by Federal Governance.

In my next post we will explore the major problems surrounding this business model as well as factors that weigh heavily against network marketing as a sustainable model. Stay tuned! Same place, same time :)