Monday, February 15, 2010

Wait a second…is this one of those Pyramid Schemes?” By Mike Abraham

We’re all familiar with our business and how it has changed the way we work and live. But to most, this concept may still be foreign. We can likely each recall a conversation came up when we were asked, “Wait a second. Is this one of those Pyramid Schemes?”

If you have a prospect who asks this, here’s a simple way to describe why MLM makes sense and how it’s actually very similar to the way most businesses run. This method is best-practiced in person because it does involve some drawing.

Ask your prospect to think about any typical business that has a salesperson and a sales manager. Draw a circle with a sales manager and then another below it with the salesperson. Say, “Why is the manager valuable to the salespeople?” They might say, “Because s/he has experience in selling that product.” Yes, exactly!

Keep them involved in the discussion by asking, “Does the sales manager usually make a little more money than the salespeople?” Most people will say yes. Then ask, “So do you think this drawing represents a pyramid scheme?” Usually, the prospect will start to “get your drift” right about now. Now, start to talk about hypothetical growth. “What happens if the salespeople are doing so well, they need a second sales manager? Where will s/he come from?” Hopefully, they’ll understand that the organization can either hire someone or promote someone from within the company…most likely a salesperson.

Here is an example of a common corporate structure
This idea makes sense because an existing sales rep is already knowledgeable about the product and how to sell it. If there were to hire from outside, they may not be familiar with how the company operates. Now draw a second manager with a sales rep below him or her. “This is the way companies grow their sales force. Right?”

Once they agree with your assessment, label your drawing as Multi-Width Marketing. Width in this case means to grow laterally.

Now, draw another drawing a little differently. “Let’s take this picture and draw it a little differently. Instead of hiring a new manager from Monster(dot)com, we’re going to promote someone who already knows the product. Since it will be one of the existing sales reps, I’m going to keep the drawing the same by drawing a new sales rep under them, like this.” Now write Multi-level Marketing at the top. Multi is more than one. Level is to grow vertically. Marketing means that everyone is doing the marketing.

This simple drawing exercise should help you outline the basics to your prospects as the come to understand that your business is quite similar in structure to the models they’re already familiar and comfortable with. Here is the USANA Networking business structure
Just remember that every company has a business structure.


  1. Thank you Mike, for the visual! This is such a simple concept to understand.

  2. Fabulous visual--thanks Mike!

  3. This wull be a great tool to use! Thanks