I Am Here To Help You Learn Effective Marketing Strategies


Welcome to my blog, where you will find the best marketing information to help you to succeed in your home business.

Hello, my name is Richard Brokenshire and I’m glad you decided to visit my blog. My goal is to provide you with effective information and tools that will help you become a successful internet network marketer.

For many people, sales remain a mystery. Selling is the highest paid profession in the world, but most people never put a few pieces together to make a profit.

Sometimes they read about it for years looking for secrets and ways to breakthrough, but the money is always illusive.

Making a full time income in business is possible and many people are doing it? But how can it happen for you?

I’m absolutely convinced that a lot of people are just giving up too soon. They don’t quite master the skills that are necessary to succeed.

So here comes a really important thing…the warning part of this article:

The Internet is a fantastic tool, but it’s loaded with traps, and many people who will sell you half of the tools that you need to become successful. After all, do they really want you to build a real business? Keep in mind, if you become successful you won’t need them or their products anymore. So I’ll ask you again, do they want you to succeed?

Unfortunately they have a reputation that precedes them. It’s easy to fall for the hype when you are at your wits end and you haven’t made money yet.

On my blog you will find advice and real world action plans to help you move forward as a person and in your business life. You may find the “tough love” approach difficult to face but if you stick with it you will put it all together and finally realize the your dream of a successful business.

My first bit of advice is this:

The three main things you need to concentrate on are as follows:

1. Generate your own quality leads

2. Call your leads the same day as they are generated

3. Have a long term follow-up system in place

4. Have a quality business plan that anyone can duplicate

You can’t control what the industry, your company, your up line or down line does, but you can control the three things above.

So which one do you think network marketers have the most challenge with? You guessed it, #1.  Although, picking up a phone that weighs 100 pounds can be tough! Most people seem to have difficulty in generating leads.

I can tell you from personal experience that your friends and family members are not the kind of leads that your business needs. Your brother-in-law or postman are probably not the best people to try to get involved in your business.

Maybe chasing down your friends worked in the 1960s but this is the 21st century. You need to move your thinking to the computer age! The good prospects are online right now. You just need to find them.

You may read about “attraction marketing.” It’s really nothing but putting a help wanted ad in front of someone who is looking for that kind of “job.” It’s not rocket science. Anyone can do that.


Thank you!

Richard Brokenshire

MonaVie in foreclosure | MonaVie foreclosure


The MonaVie foreclosure


monavie foeclosure


MonaVie was once the darling of the network marketing world. They were founded in 2005. Their best year in business had estimates of their annual revenue to be in the neighborhood of $825,000,000. That’s a really nice neighborhood! Those types of earnings would have put MonaVie in the top 25 revenue generates of all network marketing companies.

Oh how the mighty have fallen! I was unable to find MonaVie in the top 100 MLM companies in terms of annual revenues generated, for 2014. You can see the list of the top 100 here.

MonaVie had taken a loan of $182,000,000, at 12%, from the TSG-MV Financing, in 2010. The note was secured by the assets of MonaVie. Earlier this year Jeunesse Global purchased the note. MonaVie was unable to continue to make payments on the note to Jeunesse.


MonaVie Foreclosure UPDATE: 5/15/15

It is being reported that MonaVie actually defaulted on the original loan. The note was then purchased from TSG-MV Financing, in March 2015, by the parent company of Jeunesse Global, Legacy Alliance Partners.

To me, there is only one reason why you buy a note that is in default. You buy because you know the company will probably default on the new loan. My guess is that MonaVie renegotiated the loan with Legacy Alliance Partners and tried to continue doing business.

The whole deal looks like suspicious. It appears like Legacy Alliance wanted to acquire MonaVie and this was the cheapest and quickest way to do that.


What does the MonaVie foreclosure mean?

all about the monavie foreclosure

MonaVie is in default. Jeunesse is foreclosing on MonaVie. In essence, Jeunesse will acquire the entire MonaVie company.   All of MonaVie’s assets, down to the staplers.

The number of distributors, in MonaVie, was last reported to be nearly 80,000.  What will become of them?  Will they be Jeunesse distributors or will they be looking to go elsewhere?  Only time will time.

It will be interesting to see if Jeunesse incorporates the MonaVie product line into their own and whether or not all of the distributors join Jeunesse. Jeunesse Global is in a similar niche as MonaVie and the product lines seem to go together fairly well.

Jeunesse Global is in the top 100 revenue generating MLM companies. In 2014, they generated a reported $419,000,000.

Currently, the bank that represents the employee stock ownership program was granted a TRO (temporary restraining order). The TRO, will stop the transfer of the assets of MonaVie to Jeunesse Global. This comes as no surprise. This will give the bank time to go over the details of the MonaVie foreclosure. A MonaVie foreclosure could make the employee’s holdings worthless.

the monavie foreclosure is very suspicious

MonaVie Foreclosure UPDATE: 5/15/15

U.S. District Judge Bruce Jenkins is presiding over this case. He did grant the TRO to Bankers Trust Co. of South Dakota. Bankers Trust is the administrator of the employee’s stock ownership program.

The judge was quoted as saying “There’s a lack of clarifying information of MonaVie and this series of transactions, and I personally prefer we deal with matters on as good of an evidentiary basis we possibly can.”

The judge wants to hear all of the evidence about the loans that MonaVie has, in order to make a decision.

There is another hearing set for May 29, 2015.


The MonaVie foreclosure shows all network marketers that even a 10 year old company can go out of business. It would behoove you to keep up with the company news of whatever MLM company you are working with!

I’ll expand this article as new information become available.


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The 4 “A’s” of success



A is for success

A is for success


Achieve or achievement is actually the 4th “A” of our discussion. I put it first because we need to know what our goal is. What is it that we are trying to accomplish? It could be as simple as meeting 2 new people per day or as big as recruiting 2 people per month. You just need to have the end in mind, when you get started.



The first “A” is for action. It is the most important thing we can do toward our success. We must take action. Not just action, but consistent action. If we fail to take action, we are doomed. Taking action is the most important thing, but it is also the most difficult. Most people are not lazy. They’d like to think that they are, but they aren’t. They suffer from inertia. Isaac Newton discovered the Law of Inertia. This Law says that an object, or in this case, a person, at rest tends to stay at rest, unless it is acted on by an outside force.

take action now!

Laziness is not the problem. It’s inertia. We just get comfortable with “being at rest.”

Most network marketers are waiting for success to knock on their doors. The only thing that knocks on doors is opportunity. We have to decide if we really want that opportunity or whether we want to remain at rest.

The opportunity is the outside force that is acting on us. Are we going to take action?

Talking to people is the most important action you can take in your business. Make a goal to talk to about your business or product people, every day. Start with talking to 1 person each day and when you start to feel comfortable with that, move up to 2 people per day.

May I make a suggestion, toward that goal?

You need to develop a “first line,” an ice breaker, if you will. I would suggest something like this.

I’ve always been impressed with your people skills. Have you ever thought about owning your own business?”

If they say yes, you then ask,

If I sent you a 4 minute video on how to get started, would you watch it?”

If they say yes, you just follow up and answer their questions.



The second “A” is for assess. You should be asking yourself these questions as you move forward and take action.

Are you getting the results that you thought you would? Could you be getting better results if you change what you are doing? If you decide that you are not getting the results that you want, then it is time for the 3rd “A.”



adjust as needed

Don’t be afraid to tweak what you are doing. If you are not getting good results, then trying changing part of what you are saying or doing. If need be, start fresh. Consistent action is key, but taking productive and consistent action is what will help you be successful.

Track your results with everything that you try. Soon you will find out what you are most comfortable with and what is working the best for you. You should be assessing your results every week, until you find what is working best for you.




celebrate all of your successes


You started out with the goal in mind. You took action, you assessed your results and you adjusted what you were doing. If you give it enough time, you can accomplish anything. Now that you have achieved your goal, congratulations! You should celebrate your victory. No matter how large or small the goal was, you need to be rewarded. This will reinforce the process. You will be more likely to continue this course of action, if you see that you will be rewarded for it!


These steps will work for any goal that you have in mind. What are you going to accomplish, this week?


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Are there too many USANA reviews?


My review of USANA Health Sciences

usana review
I chose to review USANA because it is one of the biggest and fastest growing network marketing companies, in the world. Does this mean it is a good company to join or not?
If you are thinking about joining USANA, you should read as many USANA reviews as you can find. Be sure that the reviews you read are not written by current members of the USANA opportunity. They are just there to try to recruit you into the business and may not give you an unbiased review.
My review of USANA will be an independent review. I am not, nor have I ever been a distributor of USANA products or the business opportunity.
Whether you are thinking of joining USANA or any other network marketing company, I would urge you to do your own due diligence. I strive to provide you with useful information that should give you a good start into examining this company. Remember, this is only a start!
People frequently lose money while trying to build any network marketing business.


USANA reviews – the company and its history
USANA Health Sciences, Inc. was founded in, West Valley City, Utah, in 1992 by Myron Wentz, Ph.D. Dr. Wentz is a microbiologist and immunologist.
USANA is doing business in the United States as well as 16 other countries. These include Canada, Australia, New Zealand, United Kingdom, Netherlands, Japan, Hong Kong, Taiwan, South Korea, Singapore, Mexico, Malaysia, Philippines, France, Colombia and Thailand. They told me that they are about to open a new market in Indonesia.
Their product line is in the following niches. Nutritional supplements, weight management, personal energy and personal care products.


 usana review

USANA Health Sciences is well into their 23rd year of business. This is a good sign as they have made in through the first 5 years. Most network marketing companies that fail, will fail in their first 5 years of business.
USANA’s annual revenues are approaching $800,000,000. They are listed in the top 20 network marketing companies in terms of earnings.
You can find a list of the corporate officer below.
Dr. Myron Wentz is Chairman of the Board
David Wentz/Chief Executive Officer
Kevin Guest/President of USANA World-Wide
Deborah Woo/President of Asia and Greater China
Paul A. Jones/Chief Financial Officer
Douglas Braun/Chief Marketing Officer
Jim Brown/Chief Operating Officer


USANA reviews – their financials

USANA is a publicly traded company. It’s stock can now be found on the NYSE (New York Stock Exchange). Today, their stock is trading at $117.00 (5/5/15).
Here is a link to Bloomberg’s page about USANA. USANA Financial Statement. You can see that they have enjoyed very steady growth over the past 4 years. Going from revenues of $581,000,000 to $790,000,000 in that time period.
In my opinion, this looks like a very stable company, financially speaking. If their financials are important to you, I’d suggest that you talk to a professional!


USANA reviews – their Better Business Bureau rating
I checked their BBB listing and they have a rating of A+, as of 5/5/2015. I like to see a company that has at least an A rating. This company meets that and more. Keep in mind that the Better Business Bureau just tracks customer complaints and how well the company resolves them.
The complaints can be anything from delivery issues to the quality of products and many other things.
If you would like to see the USANA BBB rating, you can find it here,
USANA’s BBB rating


USANA reviews – their products

Their products are in the nutritionals, personal care and weight management niches. Prices for their products range anywhere from $5.00 for a pair of body polishing gloves to nearly $500.00 for the Deluxe 4-Pack with Serum Intensive.
I usually advise a prospective distributor to buy a sample product from the company to check out the quality and to make sure they can actually like the products. If you don’t like the products, it will be difficult for you to sell them. Unfortunately, you can’t buy a product directly from the company. You would need to find a local distributor. You could attend a home party to see the products they sell and not even need to buy a sample. You may need to get on their mailing list, but that’s a small price to pay.


USANA products


I did find a lot of their products for sale on Amazon. You can find them here. USANA on Amazon.com.
The feedback about the products on Amazon is near glowing. Most products are getting between 4 and 5 stars. It is in your best interest to try some of the products before you join.
In 2013, 91% of product sales was purchased by associates. This is copied directly from the annual report.

Because we utilize a direct selling model for the distribution of our products the success and growth of our business is primarily based on our ability to attract new and retain existing Associates to sell and consume our products. Notably, sales to Associates account for the majority of our product sales and represented 91% of product sales during 2013.”

The annual report is 105 pages long. If you’d like to read it, you can find it here. USANA Annual Report.
I talked to USANA’s customer service department about this statistic. The statement, “the success and
growth of our business is primarily based on our ability to attract new and retain existing Associates to sell and consume our products,” is pretty damning. I’m not sure how this isn’t considered a pyramid. I suppose the word “SELL,” in there, is their saving grace.
Customer service told me that the other 9% of the products are purchased by Preferred Customers.
Becoming a Preferred Customer gives you access to the products at the wholesale price. There is a sign up process to become a Preferred Customer, but there is no fee involved.
I did ask how many people, who aren’t Associates of USANA, purchase the products. They told me that their computer system was down and couldn’t give me that information. I’ll call back tomorrow and see if I can get that information. I was just told that there are 376,000 Associates and Preferred Customers, in the business. I also learned that there are 430,000 total customers. The Associates and the Preferred Customers are part of that number. If you subtract the numbers you find that there are just 54,000 retail customers who are not part of the USANA business. This means that there is about 1 customer for every 7 Associates.
That statistic raises a big red flag for me! How much demand is there for the company’s products?


USANA review – if you join


USANA products


I have to be honest here, I’ve gone over the details of signing up to join the company and I’ve talked to the company’s customer service representatives and I’m finding it all very complex. I had to ask the rep if she found it to be very complex and she agreed that there is a lot to know and a lot to the whole thing.
Here goes nothing …
It costs $29.95, plus shipping, to buy the BDS (Business Development System). You get some paperwork when you join and they ship hard copies of these to you. This is a one time fee. This gives you the right to operate a USANA business, sell their products and recruit people into your business.
I may have this part wrong, but this is my understanding.
An Associate can open a Business Center, if and when they buy or sell 200 points of products. The point value varies with each product. I have no way of telling how many dollars need to be spent to achieve the number of points desired. You can have 3 Business Centers, if you want them. This gives you the top spot in the binary plan and the first 2 spots below that. This gives you the potential to earn 3 times the income. Or so I was told. To have the 3 Business Centers you will need to sell 400 points of products, in the first 6 Fridays of your business. If you don’t sell that many products in your first 6 Fridays, you just can’t have the 3 Business Centers. To make sure that you get the 3 Business Centers, the company suggests that you buy 400 points of product when you join.
The 6 Fridays could be 6 weeks, but not necessarily. If you join on a Thursday, the next day, Friday would be the end of your first “week.” Then you would have the next 5 Fridays, which would be 5 week, to achieve your sales goals. I told you it was complicated!


6 Fridays?
On the USANA website it says that having autoshipping on products is not necessary. However, if you want to be commission eligible, you need to buy 100 points worth of products, every month, yourself. If you have 3 Business Centers you need to buy 200 points of products, every month. Having the products autoshipped does give you a further 10% discount on the products. I suppose that you wouldn’t need to have autoship in place, if you are willing to order the products every month and forego your autoship discount. Technically, they’d be right about not requiring you to have autoship in place.
That should give you some idea of what it takes to join USANA. I would suggest that sit down with a distributor who has a really good understanding of all of this. This is very complex!


USANA reviews – the compensation plan
USANA’s compensation plan is run as a binary plan. This means that you can’t “build wide” as some network marketers tell you to do. You get 2 legs under you and that’s it. The rest of your business structure would be built in depth. The structure under you does get wider and it goes deeper, but you only ever have 2 people directly under you.
The company does have a Compensation Plan document. You can find it here. USANA Comp Plan. This document is 10 pages long. To me, it’s not any easier to understand.
The company also has a video that describes their comp plan.


USANA reviews – their income disclosure statement


This is the closest thing I could get to an Income Disclosure Statement. I called the company to see if they had anything else that went into more depth. They actually told me that they don’t release that information. The picture, below, is from USANA, so they do release that information. If their numbers are to believed, then 10% of of all distributors are making between $5,000 and $15,000 per year.


The numbers also show that 12% of all distributors are making at least $5,000 per year.


usana comp plan


I’ve been reading Income Disclosure Statements for years and I have never seen any company claim that 12% of distributors are making money, let alone making over $5,000 per year.


USANA reviews – the distributor agreement


The Associate Agreement is on the second page of the company’s application. The terms and policies part is just 1 page long. USANA is like many other companies in that they protect their name, logo and other trademarked and copyrighted materials.


There is a clause that says, “no Associate will earn money solely by sponsoring.” This seems to go against what they said in their Annual Report, above.

The first thing that I see in the Associate Agreement is that there is an annual renewal fee. None of the customer service reps mentioned this. The fee is $20.00.
As an Associate of USANA you are permitted to be a distributor of other network marketing companies. You are not allowed to sell the other company’s products to current USANA customers or Associates, if the products are similar or competitive.
There doesn’t seem to be anything spelled out in the agreement that limits the kinds of marketing or advertising that you can do in the promotion of your business or USANA’s products. However, when I spoke to the Reps, they told me that Associates are not allowed to sell the products on Ebay or Amazon. I had to laugh at that comment as there are lots of USANA’s products for sale on those sites. There is even someone claiming to be USANA, selling on Amazon. The Rep did tell me that they are very strict about the marketing and advertising that can be done. All ads and promotional material must be approved by their compliance department.
I’ve been in network marketing companies that limit how and where you can promote your business. The compliance department can be strict, but they are usually fair. Some people in the compliance department might even help you design something that will meet their requirements.
The Agreement looks fairly typical. I would have liked to see more time spent on compliance issues that might arise.


terms and policies


My suggestion would be to talk to the compliance department, before you join and run your ideas by them to see if they meet their requirements. Maybe they can help you, if they don’t.


USANA reviews – is this the right company for you?
Obviously, I can’t answer that question for you. You’ll need to weigh the pros and cons about the company to determine if this is the right business for you. I would suggest that you find people who are currently working in the business and also find people who have left the business. Find out what each of these types of people say about the personal experiences in the business. Would they recommend that you join USANA Health Sciences or not?
I don’t like the fact that a distributor is required to buy a lot of products each month in order to be commission eligible. I don’t like the fact that the compensation plan is so hard to understand. Even the joining process is difficult to understand. My thoughts on all of this is that you absolutely have to be able to understand these aspects of the business before you join any company. For me, I wouldn’t join any company until I was positive that I understood all of this.
As always, if you are thinking about joining this company, do your own due diligence.
The person who sponsors you is just as critical to your success as the information that is contained in this USANA review.
In the end, you must be willing to sell the products and recruit people into the business. It helps, a lot, if you are enthusiastic about, both, the company and their products!


usana scam
Being that USANA is in the wellness industry, there may be some that might think that they are a scam. Let me assure that USANA is a good and strong company. They are in no way a scam!
I am wishing you the best of luck in your network marketing journey!


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How to choose the right sponsor, for you

You want to join a network marketing company, great!  How do go about choosing the right sponsor?  Yes, you can choose who you work with!


Eenie, meenie minee moe …


At the end of all of my MLM company reviews I put a short paragraph that says that the person that you choose to be your sponsor is probably as important as the company that you choose and it may even be more important than the company you choose.

If you’ve been approached by a friend or a relative about joining their network marketing company and it’s the right company for you, it may be difficult to tell them that you want to find a different sponsor. Other than that situation, I recommend that you take as much time as you need to find the right sponsor, for you!

You may run into distributors that will be taking their businesses seriously and they will sit you down and ask you a series of questions that are designed to make sure that you qualify to be on their team. That doesn’t mean that you can’t be interviewing them to make sure that they are the right sponsor for you, too.


What information do you need in order to make the best decision possible?


decisions, decisions, decisions


You need to find out as much about your potential sponsor as you can. You are about to invest your time and money into a business. You need to feel like you are going to get what you need from this person to be successful. If you walk away from your meeting and don’t feel like you are going to get the guidance, training and help that you want, find someone else.


These are some of the questions that you should be asking.


How will you help me to be a success in network marketing?

Do you offer any training? Will you walk me through the process of selling the products and recruiting people? Do you have a system that I can use to help with these activities? What skills are needed in order to be successful? What other assistance and training can you offer me? If you are not able to help me, will there be someone in your upline that can provide me with the necessary help?


How long have you been in the business?


The answer to this question should have some meaning, but it is by no means the most important piece of information that you need. Your prospective sponsor may have little or no experience, but they may have an upline that will be there to help you. Or they may have a lot of time in the business, but they may never have done anything. This is a typical and expected question. It’s a good one to get the ball rolling.


How many products do you sell in a typical month?


monthly sales?


You are looking for a dollar amount. This will give you an idea of how well the products sell. A follow up question would be ask, to whom do they sell their products? Are they selling them to family and friends? Are they selling the products to people that they didn’t know before they became customers? Ideally, you’d like the products to be easily sold to friends and family members.


Do they have testimonials from their customers?


You need to know that the products are easy to sell, but also that the people who are using them are liking them and that they are reordering them. Ask to speak to their customers before you sign up for anything. Trust, but verify!


What percentage of their monthly sales are sold to their downline distributors?


This question will tell you if this is a sustainable business. If most of the product are sold to distributors, then you have to wonder if the business will be there for the long haul.


How many people have you recruited?


This is getting to the heart of the matter. There will be several follow up questions, but this is where you get started. I’m not saying that you need to be sponsored by the #1 money earner in the company. In fact, I’d rather not be sponsored by that person. They are probably way too busy to be of much help.


this is the heart of the matter


You should be looking for someone who has recruited a fair amount of people. You’re looking for more than that, though. You need to know that not only do they recruit people, but that they are there to teach those recruits how to be successful in their businesses.

The first follow up question will be, how many distributors in their downline, have recruited people? If you are able to talk to those people, that’s a bonus. Ask follow up questions like, what kind of training is available? What kind of advertising and marketing materials are available? What other kind of help is available from the prospective sponsor and from their upline?

The answers to these questions are extremely important. If they refuse to answer them, it’s time to continue looking.


How much money did they spend on their business last year?


There are expenses involved in running any business. In network marketing, you are probably buying the company’s products. You may be required to purchase a certain amount every month in order to “qualify.” There are also many other expenses in network marketing, like training. One can buy books and CDs. You can buy courses that are designed to teach you how to be successful in the business.

There may be recurring monthly fees for company websites. There could be other company related fees as well.

They may have purchased products as samples, to pass out to prospective customers. They may have gone to the company’s annual conference. The cost of the airfare, the hotel and food can really add up, fast.

It can be very expensive to run a network marketing company!


Did they have a net profit from running their business last year?


were they profitable least year?


It is possible to run a network marketing business and get paid for selling products and recruiting people and still lose money every year. Actually, this happens most of the time, to most distributors. If they were able to turn a profit for the year, you probably want to learn how they did that!


How much time do they spend on their business?


Even if a distributor was able to make money in a calendar year, you still need to know how much time they were spending working the business. Many people will tell their prospects that they can make thousands of dollars every month and only work 7-10 hours per week. Now, this may or may not be true. If your prospective sponsor claims that they have done this, ask for proof. Again, if it’s true, you will want to hold onto that sponsor!

If you have read any company’s income disclosure statement, they may have included how many hours a typical person at each level works per week. Not all of them are willing to give out that kind of information, but some do. What you will find is that the top earners, the people at the highest levels of the compensation plan, are working at least 40 hour per week.

That doesn’t mean that you can’t start out working 7-10 hours per week and build up from there. I do not think that it is realistic to think that you can make thousands of dollars per month working so few hours.

It’s okay to talk to as many prospective sponsors as you want! Don’t be shy and don’t be afraid to do this.

If you just graduated from law school, you’d want to talk to many prospective law firms to find the one you felt most comfortable with. You would look for the firm where you fit in the best. You’d pick the firm that would be the best one to advance your career. This is no different!


choose wisely


You need to find the sponsor who you think will give you the best opportunity to find success, in this business.

You need to find a sponsor who will be there to train you on what to do and how to do it! Until you find that person, keep looking. This decision is quite possibly more important than the actual company you are working for!


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You might be in a pyramid scheme if …

 pyramid scheme?

 Is this a pyramid scheme?


Have you ever prospected someone and the first question that they ask is, “Is this a pyramid scheme?” If you haven’t been asked that question, then you haven’t been in the business very long or you haven’t prospected anyone yet.

Have you ever wondered why so many people will ask you if your business is a pyramid scheme? Let’s see how the Securities Exchange Commission (the SEC) defines a pyramid scheme. You can visit the SEC’s website and read their guidelines here.

What is a pyramid scheme?


Products or services

A network marketing should have an underlying product or service that it sells to people who are not distributors in the company. You should do your very best to find out what percentage of the company’s sales are to actual customers. If the company is surviving on sales to its distributors, then you and they may be in trouble.

The goal of any company, whether it is a network marketing company or not, should be to sell its products or services to people who are not in the business.


Quick return of a distributor’s investment


quick profits?


If a company makes promises of distributors getting their money back, quickly, then there could be problems. The company may be using funds collected from new distributors to pay the established distributors. This is what happens in a Ponzi scheme. New money should be generated from the sales of the products and services to people who aren’t in the business.


Easy money and passive income

If you are told that you will compensated for doing very little work or recruiting others, you could be involved in a pyramid scheme. The company could ask you to do things like making monthly payments or investments, recruiting others, and placing ads. All of these kinds of activities could be done in order to fill open spots below you. That would be a pyramid scheme.

In this case, I believe that passive income is being used for money earned without doing any work.  Which is different than residual income which is money that is paid for work done previously.


A distributor is required to pay to join

Beware of any company that requires you to pay a fee to join their program. That’s right! Even if it is a small monthly fee or a one time fee.


Understanding the compensation program

The compensation plan should be easy to understand. If it is so complex that you do not understand it, then you could be involved in a pyramid scheme. Also, if the pay plan is based on recruiting new people into the business instead of the sales of the products or services offered, then you should be leery. The compensation plan should be easily understood. If you can’t understand it then it could be easy for the company to cheat the distributors out of commissions that they earn.


Recruiting vs sales


recruiting or sales?


If the company’s emphasis is on recruiting new people instead of selling the products and services then you are likely involved in a pyramid scheme. You should be able to make decent money from selling the products or services. If the company’s focus is on recruiting new people into the company, you could be looking at a pyramid scheme.

This is what the SEC advises people to look for when there are considering joining a network marketing company and this is how they define a pyramid scheme.

When I read those guidelines, my first thought was, most network marketing companies do most of those things. It’s no wonder that every time the SEC or FTC gets a bug up their hat they go after a network marketing company as being a disguised pyramid scheme. It’s also no wonder that most network marketing companies have high priced lawyers on their staff.


under investigation


How does your current MLM stack up against these federal guidelines?

All network marketing companies are innocent of being a pyramid scheme until proven guilty!


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