Is this a SCAM?

“This is a pyramid scheme.” “It’s a scam.” “Isn’t this pyramid selling?”

We’ve all heard objections to network marketing by such statements from one or more of our prospects.

This type of money pyramid objection usually occurs from ignorance. The prospect doesn’t understand how our business model works and is repeating rumor and innuendo from things they’ve heard from family and friends and even strangers or read over the internet.

The third cousin of the prospect knew someone who knew someone in network marketing and told them that network marketing is a marketing scheme out to steal their money and leave them buck-naked and hairless on the side of the road. “Because my third cousin said it, according to the prospect, “it must be a money pyramid scam.”

Pyramid sales are schemes that recruit members by promising them money for enrolling others in the scheme WITHOUT supplying any return on the investment or selling any products or services. These are illegal.

Network marketing certainly does not fall in the category of a pyramid money making scheme, because it does move products and services in order to make money. The person at the bottom will make more money if he moves more products and services than the person at the top.

The Money Pyramid Comeback

Pyramid sales are schemes that recruit members by promising them money for enrolling others in the scheme WITHOUT supplying any return on the investment or selling any products or services. These are illegal.

Network marketing certainly does not fall in the category of a pyramid money making scheme, because it does move products and services in order to make money. The person at the bottom will make more money if he moves more products and services than the person at the top.

When someone uses the money pyramid playing card on me, what I say depends on what they say. Taking a chapter from David M. Ward’s playbook on overcoming objections to network marketing, if they say, “This sounds like a pyramid,” I might say, “You mean like in Egypt?” and see if I can get a laugh out of them. If they ask, “Is this a money pyramid?” I might say, “Of course not, pyramids are illegal. Why, is that what you were looking for?”

I might also say:

“You mean like the company you work for is a money pyramid. Your boss earns more than you do, right, and their boss earns more than he or she does? The difference in our company is you can earn more than your sponsor or anyone in your upline.”

If they get really hostile and try to show me that they’re clever, I might give them a hard time about their money pyramid comments:

“Uh oh, you caught us. Our company has been around for seven years. We have sales in the $100-million-dollar range. We have distributors who are attorneys and CPAs and business owners, we are a member in good standing with the Better Business Bureau. We’ve organized charities all over the world. I can’t figure out how you saw through everything. Yep, it’s a money making scheme front and center. Totally a scam. Totally illegal. You caught us. Tell me, how did you figure it out?”

They usually realize how ridiculous they sound about it being a pyramid marketing scheme and back off.

If they are pleasant about it and ask out of ignorance, I’ll explain how our business model works. I’ll point out that our compensation plan is similar to what is done in the real estate and insurance industry.

If they work for an hourly wage or a monthly salary, I’ll point out that their company pays them so much an hour and earns a profit off of every hour they work, and that this is the way it works in business. However, in our business, they can be the one who earns a profit off of other people’s efforts.

A money pyramid won’t let the person on the bottom climb to the top, but with network marketing it turns the pyramid upside down. In network marketing you can sign up right at the beginning, pay a little money to get in, and actually end up making more money than the person above them.

Meet the money pyramid objection sometimes with humor, sometimes with sarcasm and sometimes with seriousness, but nevertheless, meet it head on, don’t let it lie, and most importantly don’t argue with the prospect about it.