Pyramid or Ponzi…

Restored from the Empower Network archive (2011–2017), lightly edited to meet our current advertising standards. Views are the original author’s.

Misused Terminology…

When you mention to someone that you are involved in an online business, home business or any form of online network business the most common, misused and misunderstood comments are:

“It sounds like a pyramid scheme”

or

“You need to be careful it’s not a ponzi scam…they’re illegal you know…”

You try not to roll your eyes and sigh as you tend to hear it time and time again and it doesn’t seem worth arguing the point and attempting to explain the difference. After-all, they obviously “know” more than you although they have NEVER been involved in any form of online business themselves.

Knowledge and education are priceless commodities to possess and in this case it is no different. Let us educate you a little to expand your knowledge on these subjects.

A Couple of Definitions…

What is a Pyramid Scheme?

True to its name as Pyramid Scheme is structure just like a pyramid. Participants attempt to make money solely by recruiting new people into the program with the promise of sky-high returns in a short period of time for doing nothing other than handing over their money and getting others to do the same.

The main key elements here is that with any Pyramid Scheme there are NO products sold; NO investment has been made; and NO service has been provided.

The instigators of the pyramid scheme often go to great lengths to make the program look like a legitimate multilevel marketing program. But despite their claims to have legitimate products or services to sell, they simply use money coming in from new recruits to pay off early stage investors. Eventually the pyramid will collapse because at some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors, and many people lose their money. The chart below shows how pyramid schemes can become impossible to sustain:

Pyramid schemes are illegal and tend to be very risky ‘get-rich-quick’ schemes that can cost a lot of people a lot of money.

What is a Pyramid?

A Pyramid is a business structure, also known as a hierarchical structure, has many levels within the organization. Many offline businesses or companies have a pyramid structure with executives, directors and employees.

 A traditional hierarchical structure clearly defines each employee’s role within the organization and defines the nature of their relationship with other employees.

Hierarchical organizations are often tall with narrow spans of control that gets wider the further down the structure you go.

These are legitimate traditional businesses.

 What is a Ponzi Scheme?

Named after Charles Ponzi, a Boston clerk who originally instigated this scam in 1919.

Like a Pyramid Scheme the idea is to get people to invest their money in the “deal of a lifetime” to make a huge return in a short period of time and little risk. Unlike a Pyramid Scheme, all of the money goes to the guy at the top. Like a Pyramid Scheme, there is no “investment”.

Money from “new” investors goes to the “older” investors to pay their returns and on it goes until it too collapses when there are no “new” investors.

What is MLM?

Short for Multilevel Marketing (MLM). This is how most home business opportunities operate. Some common known MLM businesses are Amway, Tupperware, Undercover or Avon (to name a few).

It is based on selling a product for a percentage of profit to a customer. You are encouraged to recruit other people who will replicate the procedure to create a team that will generate monthly residual income.

The beauty of MLM opportunities is that you can chose whether to just sell the product to consumers or to recruit others to join you in the same business opportunity.

Every MLM has its own draw-card and will attract people based on what they are looking for and the percentage of commission given.

Most MLM businesses are a form of Direct Selling and/or Internet Selling. Nowadays if you’re not on the internet with online sales available you just not in the know.

What is Empower Network?

Empower Network is a unique online business opportunity whereby not only are the products offered by Empower Network second to none but as an Affiliate of Empower Network you receive 100% of all product sales.

If you have never succeeded at network marketing before, if you are sick of being burnt by every online business opportunity you throw money at – this is for you.

Empower Network was created by a couple of guys who where sick of getting burnt, sick of doing all the work, making all the sales and getting miserable commissions for their efforts.

Every Empower Network product is worth far more than the cost attached to them, in fact they are more than just products – they are an investment into your future, an education in network marketing that we have never seen anywhere else.

The best part is that all sales you make as an Affiliate of Empower Network are 100% COMMISIONABLE!

Summary…

We hope that you have gathered a little more information into the world of network marketing, home businesses, affiliate marketing and the like.

Next time someone tells you about their amazing new online business, don’t assume they have been ripped off and have been scammed by joining a pyramid scheme or a ponzi scam. Listen to what they are offering as it just might be what you have been looking for and may be the key to unlocking your future!