If you are in network marketing or thinking about getting involved the question I get a lot is, is this a pyramid scheme? I also found out there are some people in the business who do not know the difference.

So let’s go ahead and take a look at this.

Let’s start with the pyramid scheme concept. Pyramid in business means that someone is making money off you. The word scheme refers to getting ripped off, taken advantage of. Based on that definition we are in involved in a pyramid.

Let me explain.

Anytime you buy something someone is making money off you and sometimes the price is not worth the value. Also when you work for someone there is somebody above you making money off the work you do. The only problem with that structure is that as a consumer you are at the bottom. The same goes for being an employee. So based on the pyramid structure you are at the bottom and someone is making money off of what you do.

Now let’s take a look at the pyramid scheme model. Firstly there is no real company involved or even registered. No company exists, this model is not legal. Another aspect is that there is no product or service involved in the sales process. The only way a person makes money is by recruiting someone else. They are probably not listed with the Better Business Bureau. So basically There is no company, no product or service which is illegal. Now this is a pyramid scheme. If someone approaches you with something like this walk the other way.

Now we look at a real business model. This model there is a real company that is registered, has a product or service, people get paid when they make sales and company most likely is registered with the BBB. This is the total opposite of the scheme model.

In summary a pyramid scheme is illegal while network marketing which is a real business is legal. Network marketing is the most lucrative business model in the business world today for the average person to start their own business. Another way of looking at network marketing is a private franchise.

Ron Randall Entrepreneur Visit The #1 online marketing resource for home business owners and get the latest tips, strategies and FREE marketing newsletter to help build your business. http://ronjrandall.com

Ron Randall specializes in is helping people start their own home business and become successful once they get started. Teaching people the true art of marketing offline and online. Most people are not taught the right way to market themselves and their business.