Network Marketing- The Stigma and the Solution

This is a guest post from Village Hive Member, Andrea Accinelli

Network Marketing

The Stigma and the Solution

“Well, that sounds like a pyramid scheme.”

“You only make money if you’re at the top – no thanks.”

“It’s a scam. Those businesses never work.”

“When are you going to get a real job?”

If you have ever had a home-based business with a Network Marketing company, at some point you have heard people carry on with these myths when you’ve talked about it. NWM continues to have a stigma attached to it, although fortunately that stigma is fading some as more and more people join. When it persists though, it can be one of the most frustrating conversations that a NWM professional has. It’s difficult not to let your defenses rise, and speaking of it can raise your voice to a level of sheer fury if you let it.

To understand the stigma, it is important to understand why it happened in the first place. Although the Network Marketing industry has no formal history, it is believed that the California Vitamin Company (later named Nutralite), which sold food supplements, started it all. The concept of Network selling seems to have emerged accidently when the Distributors discovered that they were generating more sales for the Company by referring their friends and known people to the business opportunity available with Nutralite. At that point, there was no reward system for the distributors for the referrals that they made that resulted in sales for the company. Finally, it occurred to the company and the Distributors that the system of paying a percentage bonus on the sales that were achieved by the Distributor and the network that he sponsored or built was introduced. And thus, Network Marketing was born.

Sounds great, doesn’t it? Well of course it does! What could possibly go wrong with a company rewarding people for generating sales? Enter the bad guys.

Circa 1986, someone sent me a “chain letter” telling me to send $1 to the five people ahead of me on a list that was provided, then add my own name to the bottom of the list, and then I would receive a pile of cash in the mail. Yes, of course I did it! Did I receive riches in the mail later? No. Did I receive anything at all in the mail? Of course not! This is a teenage version of what is commonly known as. “The Pyramid Scheme.”

Pyramid schemes are illegal businesses that have, unfortunately, adopted a similar format to a legitimate network marketing company. People get the two confused all the time. Let’s say that Alice is involved in a pyramid scheme, and Lydia is with a network marketing business. Alice is paid for recruiting more people into the scheme, who are charged a large fee for entry. Alice, and everyone above her in the line, gets a percentage of that entry fee. The more people Alice brings in, the more money she and everyone above her makes. There is no product or service involved, just an exchange of money. Lydia sells jewellery. She sells a necklace for $100, and she gets $30 commission for the sale of the necklace. All she has to do is enter the sale on her company’s website, and the company sends the necklace to her customer. Following that, Kimberley, who recruited Lydia, will also get a percentage of the sale of the necklace, and possibly others above her. Perfectly fine anyway you look at it. However, the similarity between the two transactions are there, and are easily confused. That is where we, as Network Marketing Professionals, have to get into action. We have to educate people, and sometimes it is really hard. So how do we do it? Surely the fact that a company like Avon, for example, has been around for decades and has generated billions of dollars in sales and operated in dozens of countries might be a clue. Facts like that don’t seem to be enough when discussing your business at the table with family members at Thanksgiving and they think you’re part of a scam.

Here are some tips to help deal with some of the negativity:

A quote from Eric Worre, an industry expert and one of its most sought after trainers: “Remember, our goal is education and understanding. It’s not to win an argument. Our job is to help blind people see. When someone brings up a negative question or if they offer you an objection, all they are really doing is helping you to identify one of their blind spots.”   To paraphrase Worre, people who object to network marketing always have a reason, and one of those reasons might be a bad experience that they personally had with another company – yes, this can be true. Perhaps they joined a less than desirable company and had piles of unmovable product stacked in their basement. Get their story from them! Have them talk about it and sympathize. Not every network marketing company is a good one. Just like every corporate company is not good. There is good and bad in everything, and hopefully pointing this out in a non-obnoxious way can help. Keep in mind that while their facts may not be accurate, their feelings are legitimate, so you must respect that.

When someone asks if this is a “pyramid scheme”, that one is easy to deal with. Ask them what they mean by pyramid scheme. Most of the time they don’t even know what it really means. Once you’ve cleared up the meaning, you can explain that pyramid schemes are illegal and are shut down.

Imagine you’re at the dinner table at a family gathering and Uncle Howard says, “Are you STILL doing that? When are you going to get a real job?” My friend and colleague Deb Gagnier responds this way, “What’s a real job? Everyone has a different value. Compared to what – how is direct selling not a real job?” Once you start asking them questions, people will engage in a conversation. Don’t lose your cool and just keep asking questions.

My own piece of advice to leave you with: anyone who is repeatedly giving you a hard time about your job, your income, or your life is not paying your bills. Make your vision and desire for success larger than the effect that the haters’ opinions have on you. Keep in mind that Network Marketing is not for everyone and that not every person is meant for your team or company. The best way to change anyone’s mind about this is your own success. Don’t allow anyone else opinion get in your way of making your dreams come true. And when they do come true, the skeptics’ eyes tend to open.

Network Marketing- The Stigma and the Solution

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