Let's Talk of Pyramids Again

I mentioned in one of my recent posts that I've been lurking some of the MLM boards, reading various posts. One thing I have noticed is that people have a hard time figuring out what is a pyramid and what isn't.

Now I've seen some true pyramids lately, and they are kind of scary. The most common kind is the internet version of the chain letter; here's how it works:

You stumble across a website that in essence says, "send $25 to me and my immediate two uplines and I'll give you a website like this. Then you will get in the search engines and people will send you, me and my upline $25 each. Before long you will get hundreds of dollars per day from people below you sending money."

That, my friends, is a pyramid. No goods or services (unless you count a replicated website) are being exchanged. There is no supervision to make sure the money gets to the right people, and you don't have to do anything -- just let the money roll in.

Legitimate networking opportunities have a good or service, usually a consumable, and usually more than one good or service is available. Yes, you make money by other folks joining under you, but you can also make money selling the product itself.

Now I've also seen some business opportunities of late that have offered a service, but the only way to get the service is to join. Is this a pyramid? Maybe, maybe not. If the services are worth more than the price to join, I'd say it was a good deal. For example, I see companies (non-networking but with an affiliate program) offering web conferencing for between $19.99 and $44.99 a month, with a monthly subscription. If you were an affiliate, you'd earn the $10-25 each month the person who joined because of you renews. Not to mention if one of them signed up as an affiliate too, you'd make money on their sale of subscriptions.

That's not considered a pyramid. Granted, an affiliate program can only have 2 levels deep or it becomes network marketing. But would you deny that it's a legitimate service?

So think of it this way -- if the product or service was being sold as an affiliate instead of networking, would it be a good value -- or at the very least in line with the current market?

Now I will probably get some people upset with this post, but that's OK. In the end, it comes down to your judgement and your research as to if the networking opportunity is sound...or if it's something you should run away from fast!