Tag Archives: pyramid scheme

MLM: Pyramid scheme, or free business coaching with performance-based compensation?

In the course of either promoting my business or describing to others what I do as a professional networker, I find that many individuals have little understanding about how the industry of network marketing, or multi-level marketing (MLM), actually works.

For those who have some exposure to the industry either directly or indirectly, perception tends to fall on one of two opposite ends of the spectrum: they either know someone who is making more money than seems rationally feasible/legal, or they know someone who has racked up a garage full of product and never made a dime from their business. In reality, there are people in each category, as well as a significant, nondescript middle-class segment which comprises the “full-time” established networkers that earn, on average, nearly twice the national median annual household income (at least for those affiliated with my corporate partner).

If only I had been properly approached with the concept of network marketing while I was an undergraduate student, I may have reconsidered my choice of profession at an earlier age. After all, the average full-time compensation of network marketers cited above is far greater than that of electrical engineers, even while EEs command among the highest salaries of new graduates with either Bachelor’s or Master’s degrees. Of course, compensation is not the sole determining factor in selecting a career, but it was a significant consideration for a pragmatic student such as myself (and a widely touted selling point for the curriculum by faculty in the EE department).
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