Today we're going to be talking about the phrase, "Network marketing is a scam."

First, let’s define the word scam. A scam is a fraudulent scheme. 

And now let's define fraudulent. The term fraudulent is generally defined in the law as: an intentional misrepresentation of a fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. 

Definition Scam

Every Industry Has Fraud 

I don't know of any industry that doesn't have people in it who create fraudulent activity. There are people who defraud others in healthcare, religion, media, government, military, education, and financial spheres. There is no industry that I can think of in which there has never been found a person who defrauded somewhat. But that doesn't mean that the entire industry is a fraud because some people in it are defrauding people. That's the first point that I want to make. 

Another thing I’ve seen quite a bit in network marketing, is a person will purchase too much inventory, and lose their money, and then say it’s a scam. A person comes into a business, let's say a lawn mowing business and the person buys lawn mowers and weed eaters and they go out and try to run a business and then they realize that they can't make their money, and so they quit. Is that a scam? No, it’s a person who made a decision to go into a business. 

In any business, you're going to have risks, but there’s also a risk to not being in business, right? In other words, there's a risk of the upside potential that a person can make if he owns his own business. 

"In any business, you're going to have risks, but there’s also a risk to not being in business"

Tim Sales

So when is network marketing a scam? Here’s three examples. 

Misleading Income Promises

Number one: if the phrase, “You can earn “X” money in “X” time,” comes out and it was said intentionally and the person who said it didn't know all the facts, and it caused damage. That would be a scam. So, people who are in network marketing who are reading this, please do not do that. Just explain the compensation plan percentages that can be earned on “X” amount of volume moved. Never in a timeframe. 

Gimmicky Products 

Number two: gimmicky products. A gimmicky product would be something like joining a club for $200, and then you get to buy from regular retail stores at a discount and it's going to cost you $200 a year to renew. And when you do the math on it, you find you'd have to spend $30,000 a year at the company that's associated with it in order to make back your $200. Another example that would fit into that category of a gimmicky product is where the only thing they have is wealth training, or something like that, and they're charging a fee for it.

People Who Aren’t Logical or Reasonable 

Number three:The third example is a little bit of a reversal, and it’s that sometimes there are just some mean and angry people in the world. 

I remember when I worked at a Chevron station when I was just 16 years old, and this lady pulled up and I asked her, “Can I help you?” And this was back in the day when you filled them up with gas, checked the oil, and washed the windshields. I was doing all of that and all of a sudden this lady lit off and she began to scream and I just looked around the hood at her and didn't know what had happened. She kept pointing up at the sign by the street and yelling something. And it was with such anger that I couldn't understand her, so I walked around and I said, “Ma'am, what's the matter?”

And she said, “This is a fraud. You're trying to rip me off!” And she just kept on screaming and pointing at me and I couldn't even gather what she was talking about. Finally, I realized that the pump had a price and the street had a different price. The gentleman who owned the gas station had had a late night fill, where they filled the big tanks underneath the store and he hadn't gone up on a ladder and changed the street sign price. So the lady was all upset that there was a difference in price and she was calling us a scam and a rip-off.

So I went inside and got the gentleman. He was a very old man and just the sweetest man I'd ever met. He came out apologizing and saying, “It doesn't matter what you're upset about, whatever you're upset about, I'm sorry.” And she just wouldn't back down. She just kept yelling at him that he was trying to rip her off. I could tell he was so upset by it he was trembling, and he ended up saying, “You don't have to pay me for the gas. I'm sorry that you're upset. Just go ahead and I'll pay for the gas.” And so she drove off yelling. 

Who ended up scamming who? She ended up getting something for free. 

This type of person typically just feels as though everybody's out to get them. They're fearful of doing anything with anybody because they think they're going to get ripped off, and just as soon as they think they see something, they launch in and say that it's a scam.

I hope this was helpful for you to understand that network marketing is itself. There may be some people who do some of the above things. It doesn't mean the whole industry is a scam. 

If you liked this, give me some comments down below. I love to read them and find out what your thoughts are on this topic.