How Network Marketing Differs from a Ponzi Scheme

By: Michael Noto


The phrase Ponzi Scheme gets thrown around a lot when people are putting down the business of Network Marketing. Being a Network Marketer myself I take offense when people characterize my business as a Ponzi Scheme. This is because plain and simple a Ponzi Scheme is illegal while the Network Marketing business I run in completely legit. I do not blame people for thinking these two concepts are one in the same based on the misinformation that is spread on the World Wide Web.

A Ponzi Scheme us a fraudulent investment that pay its investors with money paid by other investors. It is named after a man named Charles Ponzi. These schemes are usually uncovered based upon there abnormally high returns they provide investors. On the other hand a Network Marketing business involves selling and/or marketing real good or services for a competitive price. Ponzi Schemes do not last for a long period of time due to people uncovering the fact that there is no substance to where all of these astronomical profits are coming from. It is quite simple the more investors that become involved increase the chances that authorities could be informed of a Ponzi Schemes fraudulent practices. A Network Marketer never has to worry of such problems because they have their business systems and products that give their business credibility.

People getting involved in any online based business need to be informed and educated on the harm and deception of Ponzi Schemes. These systems can lead to people dumping large amounts of capital in hopes of a large short term return on their money. Which, don’t get me wrong, is very appealing if you do not realize what you are getting yourself into. As a Network Marketing business owner the comparisons to Ponzi Schemes is a Top 5 hurdle I face in selling my product or business opportunity to potential customers and business partners. My hope is by reading this article people can become more informed and seek out a detailed business plan for every business or investment opportunity they wish to become involved with.

A persons due diligence and research is most important when evaluating internet business ventures. The more detailed your research process is the less chance you have at becoming involved in a Ponzi Scheme. There have been many a persons financial situation ruined by the false practices of a Ponzi Scheme, do not let yourself fall victim. There are many more legit Network Marketing biz ops then Ponzi Schemes out there, so go find one today!


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