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Ducker Promotion Ezine
Publishing Online Since 2005
Editor: Debbie Ducker
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Welcome to the 30th issue of the Ducker Promotion Ezine for 2010.
In this week’s issue read “What are the Differences of MLM, Pyramid Schemes, and Matrix Programs?” plus get some great resources to help you with your MLM programs.
Enjoy and be sure to interact where you can… With your ads, tips, etc. for the next issue. And especially your comments. We would love to hear what you have to say. Ezine owners send in your ezine in the ezine exchange section.
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Disclaimer: Ducker Promotion in no way endorses or validates the authenticity of any of the 3rd party ads in our ezine. We encourage you to check each one out with your own research for those you are interested in.
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What are the Differences of MLM, Pyramid Schemes, and Matrix Programs?
By Debbie Ducker
Have you ever wondered what the differences are in MLM, Pyramid Schemes and Matrix programs?
MLM (Multi Level Marketing) 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?
Well first off make no doubt about it “Pyramid Schemes are illegal in the USA”, and probably abroad. We all know how these schemes work, or at least get the gist 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 defines 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.
However while some MLM programs fall in the illegal category, not all MLM programs are illegal. See the FTC information here
How is a legitimate MLM program 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 costs the distributor nothing, E-books, software, newsletters, etc. are the most common products used in MLM. Many MLM programs also offer tangible products as well. Home products were the first to use MLM as a primary marketing strategy.
With so many MLM programs on the market these days, originators have tried to make their programs more desirable than others. This is where the forced matrix idea came to life. 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. This could mean that you can only have 4 people directly under you and only 4 people under those 4 who you receive commissions from.
There is a hybrid idea that has become common now, where by a person can deliberately place a referral in another line of their choice. A typical 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 MLMer’s have even implemented the option in their 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.
Keep in mind that the number one key to success with any MLM or Matrix forced or otherwise is its product. You will want a product that is needed / wanted by a large consumer base and one that they will find important enough to invest their money in.
Secondly you want to consider who your up line sponsors are as well. Get to know them first either by direct contact or via research on them. You want them to have a successful track record in the business industry and you need to know they are trust worthy and willing to help you succeed. A good up line will too because as stated above it not only helps you but themselves as well.
So there you have it the differences of MLM, Pyramid Schemes, and Matrix Programs. Use this information to help you overcome your fear that all MLM is a rip off, it isn’t and can be quit profitable to you in both immediate income and long term recurring income.
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