Hi, I'm Tim Sales. Today we're going to be talking about the phrase, "Network marketing is a scam."

Let's first define the word scam. Scam is a fraudulent scheme. 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.

It's good to get the actual precise definition of it but I want to just push you in on and pay attention to these three phrases I've underlined. Intentional misrepresentation, knowledge of its falsity, resulting in injury or damage, okay? Alright, so I don't know of any industry that doesn't have people in it who create fraudulent activity, okay? They defraud people in healthcare, religion, media, government, military, education, financial, so there's not an industry that I can think of that there have never been found a person who defrauded someone, okay? But that doesn't mean that the entire industry is a fraud because some people in it are defrauding people, okay? That's the first point that I want to make.

The second thing is that I went in and I began to read, and I spent a few days on this, to really study the people who feel as though they've been scammed, like what were they talking about? What was it that was doing it, alright? What was their behavior, if you will? The first one I want to talk about is what's not a scam. Number one is the generalization of, okay? A lot of people not knowing the definition of fraudulent, they will say things, they'll use phrases and just the word scam just as one of those that comes up where they didn't get what they thought they were going to get and some people even just don't like spending any money on anything. They think everything is free. I don't know if they do the same to their boss, in other words work for them for free, but that's just sometimes I've seen that behavior where a person doesn't want to pay for anything.

There's generalization and then number two is prejudice against something, the person calls it a scam, alright? Whether it's a scam or not per definition, they just generalize it, so that's not a scam. Number two is, and I saw this quite a bit, purchase too much inventory, and this is specifically for network marketing, and expenses and lost their money. Now that's not a scam, okay? A person comes into a business, let's say a lawn mowing business and the person buys lawn mowers and the person buys weed eaters and things like that and they go out and they try to run a business, and then they realize that they can't make their money so they quit. Is that a scam? No, the person made a decision to go into a business, alright? In any business you're going to have risks, but not being in business there's risk as well, right? In other words, there's a risk of the upside potential that a person can make if they own their own business.

Okay, so when is network marketing a scam? Number one, if they phrase, "You can earn x money in x time," comes out and it was an intentional one and the person didn't know and it caused damage, okay? That is the case and so people who are in network marketing who are watching this, please do not do that, alright? Just explain the compensation plan, percentages you can earn on x amount of volume moved, alright? Never in a time frame.

Number two, gimmicky products, okay? This particular one is, and it's one of those things where it's to the beholder if you will, to determine whether or not it's gimmicky, but in my opinion, in network marketing you want to find a substantial product. I've seen some where it was like okay, so you're going to get into this club and you're going to pay $200 to join the club 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. When you do the math on it, you'd have to spend $30,000 a year at Target or whatever the company that's associated with it, in order to make back your $200. To me that would fit into that category of gimmicky. Then there's other things where it's just the only thing that they have there is training, maybe wealth training or something like that, where they're charging a fee for it.

Those two are examples and the other one it's a little bit of a reversal and that is is that there's sometimes just mean and angry people, alright? Remember when ... You don't have to be in business long before you will run across this person. I worked at a Chevron station when I was just like 16 years old and this lady pulls up and I ask her, "Can I help you?" This is back in the day when you filled them up with gas and you checked the oil, you washed the windshields, and so I was doing all of that, and all of a sudden this lady kind of like lit off and she began to scream.

I just kind of looked around the hood at her and didn't know what had happened and 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. I walked around and I said, "Ma'am, what's the matter?" She said, "This is a fraud! You're trying to rip me off. You're blah, blah." She just kept on screaming and she was pointing at me and I couldn't even gather what it was. What it was is that the pump had a price and the street had a price and 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 price. She was all upset that there was a different in price and she was calling it a scam and a rip off.

I went inside, I got the gentleman. He was a very old man and just the sweetest man I'd ever met, and he comes out and he's apologizing as he's walking towards ... Like it doesn't matter what you're upset about it, whatever you're upset about, I'm sorry. She just wouldn't back down. She just kept yelling at him that he was trying to rip her off. He was so upset by it, I could tell, he was trembling, and he ended up saying like, "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." She drove off yelling, alright?

It was somewhat petty in my opinion, obviously not in hers, but who ended up scamming who? She ended up getting something for free, alright? And she could tell if she had not been so angry, she could tell that he would have cut the price down or whatever needed to be done to make it right. This person, they typically feel as though that everybody's out to get them, against everybody, like everybody's pointing a gun at them. They're fearful of doing anything with anybody because they think they're going to get ripped off and as soon as they think or see something, then they launch in and say that it's a scam.

I hope that's helpful for you to understand that network marketing itself, alright? There may be some people who do some of these things, it doesn't mean the whole industry is a scam, okay? I hope this has been helpful to you. If you liked this, like it and also give me some comments down below. I love to read them and find out what your thoughts are on this. Thank you.