Pyramid Scheme Mlm

Is real estate essentially MLM?
MLM has the following properties
1. Multiple levels of experience, expertise, and management, like any business.
2. Always promises good pay, even to beginners
3. Selling something overpriced
4. Commissions are split, and the people on top make more doing less
5. Takes time to build your network/customer base
Is that an accurate description of MLM/pyramid scheme, and does real estate differ much from this business model?
Actually, I disagree that you even have a particularly good description of an MLM or direct marketing company. Your number 3 statement is outright false, in many cases. The direct marketers can often market their product below what traditional distributors can. Do all? Nope. But you really have to go see what some are doing and it’s shaking up traditional marketers. And why would you even assume that real estate is overpriced?
The whole argument against MLM is very suspicously like those touted against franchises back in the late 50’s and mid-60’s (I know, I was there). As for “pyramid scheme”, that simply is an illegal method of getting money from one group to pay to another and you soon run out of it. No Legitimate Mlm is a pyramid. They all offer a product or service for which there is a charge, as in any business. Are all of equal worth? Not by a long shot. Some direct marketing companies basically aren’t worth the price of start up. Others are a vehicle that can take those who want to drive them correctly to anywhere they want to go, and to do it in an ethical and unique manner.
There has also been as much change in how MLM’s are put together over the years as there has been in any other business model, with some being hybrids of the others.
BTW - Your statement #2 is also somewhat false, though admittedly, it’s been known to happen (of course, I was also promised agreat benefits and salary package at a traditional employer before and that never materialized either) Most ethical Mlm Companies and their agents will let new folks know that while there is a large potential for profit, it ain’t going to happen by itself.
What happens to most, including those in any human endeavor, like real estate, traditional business, etc, is that most simply do not make it. Right now, thousands are shaking out of the real estate industry.
You ask specifically about real estate. In someways it does fit the direct marketing model, in fact there are some well known companies were teams are built and there are many similarities to MLM’s.
The company I’m with (not in real estate) tells everyone flat out that part of our hybrid model was derived from the real estate broker/agent model itself.
That’s something to celebrate, not deny.
As for the commissions being split, that is fairly common across the industry (real estate & MLM’s as well). In traditional companies, the employee’s work often generates an amount of income to the company and he/she’s paid a salary funded perhaps in part by that income. The rest of it goes to pay the manager, the district manager, and provide a profit for the company. It’s just more transparent where the money goes in a direct marketing company.
You’re right on with number 5. As with any company, it takes time to build your business. I’ve watched it with my family in traditional businesses; I’ve seen it in direct marketing companies; and I’ve seen it in franchises. I’ve also seen lots of people give up in all of them; and many make it very well off.
One major difference that you will find in most real estate models from most direct marketing models is that quite often in the traditional real estate industry, there is no incentive for the broker (upline if you will) to train the agent (downline for want of a better term) to become a broker. Doing that, simply means that you train your competition since she’ll go across the street and open another office.
Most direct marketing company’s uplines (they all have different titles and terms) on the other hand, WANT to duplicate themselves as rapidly as possible and WANT to have their downlines become “them”; there is a financial incentive to get them to where the upline is — not all companies, but most work that way.
Enough. I’m done.
Is this a pyramid scheme? (mlm) any comp. (monavie)(mary kay)??
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