What is the Difference Between Network Marketing and Pyramid Selling?

Let me start out saying, network marketing and pyramids are not the same thing, but most people confuse the two. The reason people confuse them is that most network marketers promote to find others who promote the products, and get people into network marketing. Now, in order to start a business, no matter traditional or network marketing, there is a cost to do so. It is like if you want to start a McDonald's, then you have to be authorized and you must buy your products from the company. Network Marketing is a legitimate business model where you are compensated based on your results. Many people feel that the person on top can sit on their hands while you do all the work. I can assure you, if you want to make money in any business, it will take work, but network marketing allows you to combine helping others which will help you.Now in a pyramid, there is no product, you pay a lot of money to get involved with the hope of when others pay the high fee, you will get your money back. This is totally illegal. Now, let me say that I am sorry, but there are a lot of people that are out to make a quick buck, and they want to be financially fit, and they will do anything to do so.One way you can distinguish between the two, ask yourself, what is the product people are buying that is creating an income? When you look at a pyramid, there is no goods or services. In network marketing, you can have customers of that product, and they do not have to participate in the business. The only participation in a pyramid is the ability to make money. When I got into my businesses and now that I teach people about how to build network marketing companies, I tell them to ask the person, what is the customer to distributor ratio? If they say that there are no customers, get out the fireworks, because you want to be warning the world about this scam. Now, in a pyramid, once your recruiting stops, so does your incomes. Again, no one is paying for a product, so you do not make money on an on going basis.Now, I can say that the majority of Americans can not distinguish between pyramids, and they run from real businesses. The reason I can make this statement is, that most people will tell you network marketing companies are pyramids and will not start them, but everyone participates in the largest pyramid in the world which is government supported which is Social Security. You pay in through out your career in hopes that when you want to retire, others will be contributing so that you can retire. The government is at the top of the pyramid, and takes their money out, and I believe is one reason Social Security is not working.