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Network Marketing's Big Bad DEFAULT Mechanism

May 14, 2008
Why do businesses which operate solely on the idea of rewarding those who share product information with friends and loved ones have such a bad wrap, when anyone in marketing agrees that word-of-mouth advertising is the most powerful advertising out there?

Well, interestingly there are some who have been in the industry for a good twenty years or so, including myself, who have seen a trend that just may be the cause, or at least a good share of it, to this bad reputation.

We'll call it DEFAULT

We've all experienced it. You get a program and fine tune it to your needs. What a joy it is. The sun is shining, the birds are singing. The blossoms are filling the air with fragrance. Then one day something happens and returns all your settings to DEFAULT. And there is no way to retrieve your former settings except by starting at the beginning again. Dark clouds gather. Hours are lost, appointments missed, decisions delayed, emotions run high, and many other things go wrong. All because of DEFAULT.

Almost every business around runs on a pyramid plan, not only network marketing businesses. Let me explain. There at the top of the company is the big CEO or president who's the leader of the whole show. This person has a few people he/she trusts who help run everything. These folks are the managers, right under the CEO and report to him/her. The Managers in turn have others who report to them, and so on down the levels with more and more people on each level down. Of course, the wages are according to your level. You wouldn't imagine the janitor being paid more than the president, or the manager being paid more than the president, right? That's the basics of the business model.

So then a network marketing business starts up and changes how things workso it's advertised.

"Just stick with us, and we'll show you the best business in the world. In our business, you don't have to stay on those bottom levels and get paid less that the president. You can enjoy living like a CEO, have vacation whenever you like, travel the world in style, and even have oodles of time to spend with your family" and on and on and on they tell you. They draw circles all over a piece of paper and who you how it's possible.

All goes well... for awhile. Then one dark, dreary day you realize your American Dream, with all the fine-tuned settings you have struggled so hard to make, has gone into DEFAULT. And you find yourself again on the bottom of the pyramid, just like in conventional businesses.

An interesting thing about nearly every network marketing plan out there is that it's created with a DEFUALT button-something that makes it revert back to a normal pyramid business plan similar to Wal-mart with the top making big bucks and the bottom people basically overworking trying to make ends meet. This DEFAULT system is done by a variety of methods. I'll only list four here. Although you may hear them called different names, I think you'll recognize what I'm talking about.

1. Jump-start: knowing that many will never get beyond their initial "buy-in", they push you to "tell everyone" you can about the opportunity. This gives the company free advertising and some quick profits from the "introduction package" you just bought.

2. Breakage: when you have to give up your "points" or "bonuses" because you didn't meet some monthly goal. The company keeps the money.

3. Break Away: When you're promoted to a higher level, you have to leave behind some of your earning potential that you worked hard for. The company will keep that money for their own pockets.

4. Exhaustion: The company wears you out quick by requiring monthly quotas of new people enrolled knowing full well that you will eventually get tired and give up. Because the average recruit will only be able to enroll 2-3 people, the new enrollment requirement is kept high. When you leave because you're too tired, the company gets to keep all those new people and the money they're bringing in.

These are some of the mechanisms built into most of the MLM programs out there. Their intent is to cause your business to DEFAULT to the conventional business pyramid.

But the good news is that not all MLM opportunities do this! Look for those who specialize in helping the "little guy", who don't use the mechanisms mentioned above.
About the Author
R.E. Bloom has studied network marketing companies for more than 20 years. He recommends checking out BioGenX as an industry first alternative to the bad rap of MLM's. Visit BioGenX today! http://www.biogenxreview.com
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