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It's Not a Pyramid, It's a Matrix! |
By Ken Duggan
 MLM compensation plans are too often identified as "pyramid schemes" and, of course, this is not the case. The only real "pyramid schemes", as we know too well, are "Ponzi" schemes from Charles Ponzi who pleaded guilty on November 1, 1920 of mail fraud but who's criminal behavior involved buying postal reply coupons at a discount and selling them in the U.S. at face value.
It was a kind of "arbitrage" that should seem familiar in today's more sophisticated economy. He promised his investors fabulous returns and paid them interest from the payments of later investors, hence the term "Pyramid".
Currently, Bernie Madoff, Robert Alan Stanford and Scott Rothstein all stole hundreds of billions of dollars in the last few years in similar illegal securities and investment frauds that depended on scamming more investors to keep the scheme, and their exorbitant lifestyle, going.
The MLM compensation plans of any legitimate company are structured so that sales leaders will invest the time necessary for the organization to grow new business leaders. They are no different in principle than most corporate sales compensation plans
all across the world. Are your local real estate broker, Larry Ellison of Oracle Corp. or Lou Gerstener of IBM and their respective sales management paid in a pyramid scheme? No, of course not, except that any corporate structure has fewer people at the top of the organization and many more lower down within it.
So, what is the source of this question that we all inevitably get and how should we address it? Remember your purpose here, to find both product users and business builders. They self identify with the questions they ask and by their response to your answer.
Genuine concern about the pay structure in your MLM company should be taken as a good thing, resistance to its legitimacy is not. The sooner you can disqualify someone from your opportunity, the sooner you can move on to someone who is interested in an honest discussion of their level of interest in improving their lives with your leadership and MLM company.
A better an more accurate description of most MLM compensation plans is that they are a matrix. Imagine that the downline you are building has several leaders at the same level of development. Each of these leaders is in the organization of their up line leader who has an identical structure next to them and above them.
There is no hierarchy of reporting in a matrix, that is, each spot in an MLM sales organization is a separate company. Your personal compensation is not tied to where your up line leader is within the overall company structure, it is tied to your personal efforts in product that passes through your organization and your leader development skills. And, it is the same for all who are actively building businesses, or should be. Any additional compensation such as bonuses for growth or sales leader development are icing on the cake!
So, the next time you get the "pyramid scheme" question, tell them it's a matrix and watch their smirk disappear! The smart ones will ask what you mean and may become a new sales leader!
You will live a more fulfilling, secure and happier life with your own successful MLM business, but are you confused about how to evaluate the right one for you? I will help! Go to www.biz-ctee.com now!
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