Forgot your password?

5 Misconceptions About Network Marketing

By Edited Jun 3, 2016 1 10

There are a lot of misconceptions about network marketing out there. Network Marketing is not seen as a respectable way to earn a living by many and most might think they know enough about it to pass judgment. But do they really?  Here are five of the most common misconceptions about network marketing with information to dispel them all.

Pyramid Scheme: The #1 Misconception About Network Marketing

Misconceptions About Network Marketing

1) It’s a pyramid scheme. This is probably the most common misconception about network marketing that possibly stems from the way distributors explain their compensation plans. To explain the company’s profitable payouts, the distributor will place a circle at the top, then will draw lines (or legs) to more circles underneath the first and so forth until the diagram drawn looks like a pyramid. In actuality, network marketing is more like a spider web where everyone connected with one another and the top people are only as strong as the people below them.

A pyramid scheme is the promise of money or services among people involved without an exchange of product or services to the public.  In other words, if you were to put in money and not get any specific good, product or service, then this would be a pyramid scheme. You have just been scammed out of your money and it all went to those people at the top that started it all. 

In a legal network marketing company, there is always a product or service sold to the public. In network marketing, you are purchasing a product or service in exchange for your money. You receive a product in exchange for your money.

2) Money is what it’s all about. Many people approached by network marketers get turned off because they feel that the person is just trying to get a sale. Truthfully, network marketing is a sales job and the distributor is trying to grow their business by selling their product or service. But don’t all other companies do the same? Think about it. How many commercials do you see during the Christmas season or during the Super Bowl?

This misconception about network marketing is that people believe it’s all about the money just like these big time companies selling their products to you. Yes, network marketers want to sell their product and they want to have a certain lifestyle for themselves; but at the same time they want to offer you a chance to also become an entrepreneur, live the life you have only dreamed about and give you an opportunity to earn passive income by working with you to build your own interested customers and distributors. Do those big product companies offer you these same opportunities? Why not trust your friend, and not a big company that doesn't even know your name or history as a person.

3) Nobody gets rich. People do not think it is possible to earn a living from network marketing. This misconception about not making any money comes from those who didn’t try, don’t know how to network or those that give up too soon, too early. Most people will not even last a few months because they realize they must work at it to earn a profit. They don't make any money and this is the truth for them, but it doesn't have to be your truth.

There is no income limit with network marketing like with most jobs that have a salary cap. There are many network marketers making lots of money. If you continually seek the proper training and are continually proactive in engaging others in your business, then you will succeed.  

Get Rich Quick Scam: The #2 Misconception About Network Marketing

4) It’s a get-rich-quick scam. Right up there with the pyramid scheme thing is the misconception about network marketing as a get-rich-quick scam. The usual depiction of network marketing is the promise of earning tens of thousands of dollars a month or more and living in a lavishly decorated mansion while your expensive sports car is in the garage and you are sailing on your yacht.

Some companies do show this lifestyle to entice people to their business and there are some who have even obtained it, but most network marketers can tell you that they did not get rich overnight. They had to put in long hours with lots of rejections before they found something that clicked and catapulted them to earning a good income. Those distributors who do earn large profits quickly have usually about 10 years of network marketing experience and have lots of connections with people who get in business with them, which in turn increases product volume and profit at a faster rate than inexperienced network marketers.

Most network marketers will have to put in extra time and endure lots of naysayers before they see a profit. The important thing to note is that profit will come if you are determined to make it work for you.

5) The products or services offered are substandard. Due to the misconceptions already noted, many believe that the products and/or services offered by these networking marketing companies are of low quality. This belief comes from those buying goods by large companies where commercials and product placement and endorsements prevail. They aren’t used to everyday people promoting or marketing products.

Network marketing products and services are usually of very high quality because they are under so much scrutiny. Since they can’t compete with larger companies, their products must stand out above the rest. Many of these products have undergone more testing and research than most other products made available to the public. Some are even priced lower than what you would pay retail.

These are some misconceptions about network marketing that have tarnished the network marketing image. Though there have been (and may continue to be) companies and people who really represent scams or false advertising, network marketing is a distinguishing career if done right.


Network marketing isn't for everyone and that's okay. For those select few that do want to make it work, do all you can to learn about this business because it's not for the weak-minded or weak-hearted. There will be more setbacks than push-forwards in the beginning, but when you begin to take off and start reaping the benefits, you will have learned that the journey was well worth the wait and the misconceptions about network marketing were false.



Mar 12, 2011 10:08pm
Absolutely excellent article! MLM's can offer people who are self-motived an excellent opportunity if they believe in the product or service they are selling!
Mar 14, 2011 2:39am
Thanks, westernmom!
Mar 17, 2011 2:11pm
Really nice article. People fear things they do not understand which lead to misconceptions. Network Marketing is real viable way for people to attain financial independence for a modest startup cost.
Mar 18, 2011 12:54am
Thanks, giveopp! You could have probably put me in the naysayer category for network marketing when I didn't know anything about it. Now that I have joined an MLM company, I have learned that so many of my fears and negative commenting was because I didn't know much about the industry. Though not perfect, it's still a great vehicle to earn residual income.
Mar 17, 2011 2:11pm
Really nice article. People fear things they do not understand which lead to misconceptions. Network Marketing is real viable way for people to attain financial independence for a modest startup cost.
Apr 5, 2011 6:42pm
Great information about multi-level marketing. After all, many respectable companies, such as Mary Kay Cosmetics, operate this way.
Apr 7, 2011 11:03am
Deborah-Diane, there are many companies that we might not associates with network marketing but they are. I do think MLMs are a great way to build residual income, but it does take hard work that many people do not want to put in.
Apr 11, 2011 8:36am
I have done the MLM thing and the product was good with both of the companies I worked with. I find the disappointment lies with the fact that both of these companies have gone to the wall. So much for setting yourself up for residual income.

The other problem I found was that there are a lot of misconceptions and you are always struggling hard to teach people that you not aligned with the devil.
You do have to be the sort of person that will talk to anyone and you do have to find other like minded people.

Maybe it will change now that people are short of money but I found that most people are lazy and would rather watch TV than do something that would earn money. Or most people are scared of talking to other people and getting the rejections.

When you sit down and think about MLM without any pre conceptions it really does make a lot of sense. Real world working of the system of selling is no where near as good as the promise MLM presents.
Apr 11, 2011 6:12pm
Great points, Spondicious! You're right, an MLM is a lot of work upfront--kind of like writing for InfoBarrel, don't you think?! ;-) In theory, I think the MLM compensation plan is wonderful, but many people are jaded or just don't know how great it could work for them.
Aug 16, 2012 4:30pm
You are right on with this article. There are too many misconceptions when it comes to Network Marketing. Because of these misconceptions, people who would probably be really great in this industry shy away from it which is sad.
Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Business & Money