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Thursday, December 21, 2006
MLM, Pyramid Schemes, and Matrices
MLM, Pyramid Schemes, and Matrices
By Anna-Marie Stewart
Have you ever wondered what the difference is? MLM operators claim they're not operating a pyramid scheme. Matrix and "forced matrix" operators claim that what they have is better than MLM. So what are the differences?
Pyramid Schemes:
Pyramid Schemes are illegal in the USA, and probably abroad. We all know how these schemes work, or at least get the jist of the idea. A person (the originator) starts by sending a message to several people. Usually people he/she knows. The message in some round about way, will tell everyone to send him $5 or so...and then send the message to someone else. All the while adding names to the list, and each new recipient must send money to the first person, second person...etc
There are a million variations of the Pyramid Scheme, but the main attribute that define a pyramid scheme ( also known as chain letter) is that there is no product, it's just people sending money. The term "Pyramid Scheme" is derived from the fact that it starts with one and the size of those involved increases as you move towards the bottom. On paper, it looks like the shape of a triangle, or pyramid.
Multi Level Marketing:
How is MLM different from a pyramid scheme? After all, on paper any MLM looks like a pyramid in reality right? The differences are very simple. In MLM there is a product being sold. Income is generated from "commissions". It's actually a pyramid scheme, except that the participants get something back...regardless of whether the people they refer actually pay for something...
In MLM, the participant always gains from their investment. The catch is in the value of the product that the participant receives. This is the reason that MLM is so big on the internet. Because, information can have a monetary value, and it cost the distributor nothing. So ebooks, software, newsletters...etc... these are the most common products used in MLM. MLMers have added tangible products as well, and home products were the first to use MLM as a primary marketing strategy.
The Forced Matrix:
With so many MLM programs on the market these days, originators have tried to make their programs more desirable than others. Hence the forced matrix idea. In a regular MLM program, your monetary gains are based entirely on how good you are at marketing the program. However, most people aren't very good. So it would benefit the less talented if they had help from the talented. Basically, if the number of people who can join under you is limited in any way...then it's a forced matrix. The
idea being, anyone else you refer extra..will go under someone else. The best implementations put the extra person under one of the people YOU have under YOU. Hence it helps the person under you, which helps you too.
The term is tossed around a bit, and sometimes not used at all. However, that is what defines a forced matrix. Sometimes numbers are used to describe a forced matrix more thoroughly....like "4 X 4 forced matrix" for instance. Which might mean that you can only have 4 people directly under you and only 4 people under those 4 who you recieve commissions from.
There is a hibryd idea that has become common now, where by a person can deliberately place a referral in another line of their choice. A sort of traffic control attribute that helps originators get their referrals interested. This has been an attempt to make regular MLM more appealing, and it has worked. In fact, forced matrix MLMers have even implemented the option in their own programs.
The benefits of either are about equal. With a forced matrix, you stand to earn an income faster, but increases in income are slower because your referrals get forced further down the line from you. With regular MLM you have a stronger base, and sustaining it is generally easier...but first profits can be slow. If you want a little income faster, go with a forced matrix. If you want BIG profits and are willing to work a long time for it, go with regular MLM programs.
===============Resource Box===========
What? You’re Not Making Money Yet? Find out
how REAL PEOPLE are making REAL MONEY Right
Now by grabbing your copy of Real Life Marketer
Interviews Vol. II http://xrl.us/rimj
======================================
This article is available for reprint in your opt-in ezine,
web site or ebook. You MUST agree not to make any changes
to the article and the RESOURCE BOX MUST be included.
(c) Anna-Marie Stewart All Rights Reserved
Anna
http://annamarketing.com
Did you find this helpful? please leave a comment.
Thanks
p.s. Have you visited my Real Life Marketers Get-Together forum and posted your free ad yet?
marketing tips marketing online business information online marketing internet marketing
By Anna-Marie Stewart
Have you ever wondered what the difference is? MLM operators claim they're not operating a pyramid scheme. Matrix and "forced matrix" operators claim that what they have is better than MLM. So what are the differences?
Pyramid Schemes:
Pyramid Schemes are illegal in the USA, and probably abroad. We all know how these schemes work, or at least get the jist of the idea. A person (the originator) starts by sending a message to several people. Usually people he/she knows. The message in some round about way, will tell everyone to send him $5 or so...and then send the message to someone else. All the while adding names to the list, and each new recipient must send money to the first person, second person...etc
There are a million variations of the Pyramid Scheme, but the main attribute that define a pyramid scheme ( also known as chain letter) is that there is no product, it's just people sending money. The term "Pyramid Scheme" is derived from the fact that it starts with one and the size of those involved increases as you move towards the bottom. On paper, it looks like the shape of a triangle, or pyramid.
Multi Level Marketing:
How is MLM different from a pyramid scheme? After all, on paper any MLM looks like a pyramid in reality right? The differences are very simple. In MLM there is a product being sold. Income is generated from "commissions". It's actually a pyramid scheme, except that the participants get something back...regardless of whether the people they refer actually pay for something...
In MLM, the participant always gains from their investment. The catch is in the value of the product that the participant receives. This is the reason that MLM is so big on the internet. Because, information can have a monetary value, and it cost the distributor nothing. So ebooks, software, newsletters...etc... these are the most common products used in MLM. MLMers have added tangible products as well, and home products were the first to use MLM as a primary marketing strategy.
The Forced Matrix:
With so many MLM programs on the market these days, originators have tried to make their programs more desirable than others. Hence the forced matrix idea. In a regular MLM program, your monetary gains are based entirely on how good you are at marketing the program. However, most people aren't very good. So it would benefit the less talented if they had help from the talented. Basically, if the number of people who can join under you is limited in any way...then it's a forced matrix. The
idea being, anyone else you refer extra..will go under someone else. The best implementations put the extra person under one of the people YOU have under YOU. Hence it helps the person under you, which helps you too.
The term is tossed around a bit, and sometimes not used at all. However, that is what defines a forced matrix. Sometimes numbers are used to describe a forced matrix more thoroughly....like "4 X 4 forced matrix" for instance. Which might mean that you can only have 4 people directly under you and only 4 people under those 4 who you recieve commissions from.
There is a hibryd idea that has become common now, where by a person can deliberately place a referral in another line of their choice. A sort of traffic control attribute that helps originators get their referrals interested. This has been an attempt to make regular MLM more appealing, and it has worked. In fact, forced matrix MLMers have even implemented the option in their own programs.
The benefits of either are about equal. With a forced matrix, you stand to earn an income faster, but increases in income are slower because your referrals get forced further down the line from you. With regular MLM you have a stronger base, and sustaining it is generally easier...but first profits can be slow. If you want a little income faster, go with a forced matrix. If you want BIG profits and are willing to work a long time for it, go with regular MLM programs.
===============Resource Box===========
What? You’re Not Making Money Yet? Find out
how REAL PEOPLE are making REAL MONEY Right
Now by grabbing your copy of Real Life Marketer
Interviews Vol. II http://xrl.us/rimj
======================================
This article is available for reprint in your opt-in ezine,
web site or ebook. You MUST agree not to make any changes
to the article and the RESOURCE BOX MUST be included.
(c) Anna-Marie Stewart All Rights Reserved
Anna
http://annamarketing.com
Did you find this helpful? please leave a comment.
Thanks
p.s. Have you visited my Real Life Marketers Get-Together forum and posted your free ad yet?
marketing tips marketing online business information online marketing internet marketing
Comments:
Search engine optimisation
Thank you for the fantastic article. The place else could anyone get that kind of info in such a perfect means of writing? I have a presentation next week, and I am at the search for such information.
Post a Comment
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# posted by 
: 12:41 PM
: 12:41 PM
Hi,
Nice article about MLM marketing.Sure, through this method and tips anyone can improve the business.This is not a get rich quick scheme, but it is a great program which was started by a man who has built successful network marketing businesses before.I wanted to share more information about this topic about mlm marketing
which is also has a video explanation there, that you'll find very helpful.
Nice article about MLM marketing.Sure, through this method and tips anyone can improve the business.This is not a get rich quick scheme, but it is a great program which was started by a man who has built successful network marketing businesses before.I wanted to share more information about this topic about mlm marketing
which is also has a video explanation there, that you'll find very helpful.
# posted by : 5:12 PM
: 5:12 PM
its a nice blog....
u've got posts on very interesting subjects ..
keep up the gud work..
http://registryplayer.blogspot.com
u've got posts on very interesting subjects ..
keep up the gud work..
http://registryplayer.blogspot.com
Who knows where to download XRumer 5.0 Palladium?
Help, please. All recommend this program to effectively advertise on the Internet, this is the best program!
Help, please. All recommend this program to effectively advertise on the Internet, this is the best program!
# posted by : 11:32 PM
: 11:32 PM
Interesting… I might try some of this on my blog, too. It’s quite interesting how you sometimes stop being innovative and just go for an accepted solution without actually trying to improve it… you make a couple of good points.
online marketing
online marketing
It takes only common sense to hire a company that itself has a high ranking on the search pages. A company that can attain a top ranking beating its competitors is sure to do a great job for its clients. To find an online marketing company, you can also Google with such industry terms as search marketing, on page optimization, pay per click advertisement or website optimization.
Search engine optimisation
Thank you for the fantastic article. The place else could anyone get that kind of info in such a perfect means of writing? I have a presentation next week, and I am at the search for such information.
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