Is Network Marketing a Pyramid Scheme?

Is Network Marketing a Pyramid SchemeIs Network Marketing a pyramid scheme? This is and has been one of the most interesting questions that comes up when referencing our profession. For me it’s black and white. So let’s dance a bit shall we? Let’s start with some basic definitions…
A pyramid scheme is a form of investment (illegal in the US and elsewhere) in which each paying participant recruits additional participants, with “returns” being given to earlier participants using money “invested” by later ones.
So, is Network Marketing a pyramid scheme? The answer is most certainly no. A pyramid scheme is an illegal form of investment.

So, is Network Marketing a pyramid scheme? No!

Is network marketing a pyramid. Now that’s entirely different question. A pyramid is a shape. A solid structure; a monumental structure with a square or triangular base and sloping sides that meet in a point at the top, especially one built of stone as a royal tomb in ancient Egypt.
Now we know what a pyramid is. And we know what a pyramid scheme is.

Here’s a simple pyramid. Is Network Marketing a pyramid scheme? No!


What is Network Marketing?

Network Marketing is a type of business opportunity that is very popular with people looking for part-time, flexible businesses. Some of the best-known companies in America, including Avon, Mary Kay Cosmetics and Tupperware, fall under the network marketing umbrella.
Do people still ask, “is network marketing a pyramid scheme?” Frankly, in my experience I don’t get that question anymore. It’s a question many new people will get because they are unfamiliar with this business model. Network marketing is attracting, and has been for quite some time now, a very savvy and well educated clientele.
is network marketing a pyramid schemeIn fact, most people who look at the organizational structure of corporate America, they find it is quite like a pyramid. One CEO on top that makes boatloads of money, a bunch of VP’s that make a lot of money but not quite as much as the CEO, lots and lots of managers that make decent money, and the rest of the employees that are paid just enough so they won’t quit.
Ahh, the age old “is network marketing a pyramid scheme objection?” I think that is becoming a little more old school. People who ask that question are naive. Not naive in a not smart way, naive in a not yet knowing the truth of our profession. The truth is, network marketing is a business like any other business. There are successful ones and unsuccessful ones. There are people who treat it professionally and people who dabble. Gandhi said “let’s be the change we want to see in the world” I say, “let’s be the change we want to see in the world”
Network marketing can be a very expensive hobby, or a very lucrative business. We focus on people first, product second, then profit. People, product, profit, that’s it. Period.
Next time you hear is network marketing a pyramid scheme? Show ’em this post.
If you find this valuable, I would greatly appreciate you comment and sharing.
To your success
PS – If you have not yet entered your email on the right, go ahead and do so and Ill send you the 7 Tips to Prospecting and Recruiting that will help you grow your business.




  • Robb Corbett April 22, 2015 at 5:44 pm

    Great post Drew, very informative for those looking at our great industry!

  • Ron McLean April 22, 2015 at 8:45 pm

    Dude, the pyramids are in Egypt – I like your graphic Drew!

  • Jenni Ryan April 24, 2015 at 2:31 am

    I don’t get that question anymore either . I think it has to do with your mindset and who your prospects are. I like your brick demonstration haha.

  • Rachel Magenheimer April 24, 2015 at 4:26 pm

    Thankfully I haven’t ran into this yet. Personally, I never heard of pyramid schemes until I got into network marketing. Hopefully the misinformation is fading as people become more educated about the network marketing profession.

    • Drew April 27, 2015 at 1:02 pm

      You’re right….the pyramid objection is becoming a little old school. We are attracting a high end intellectual consumer… thanks for pointing this out