Network Marketing [All the Truth]
Published: 18 November 2020 by Andrew
The detractors of Network Marketing believe it is a scam, while the participants in these systems, at first glorify them as if they were the solution to make a living.
The truth, as often happens, lies in the middle and we will try to show it to you impartially, so that you can evaluate whether these direct sales systems are right for you or not.
To show you real numbers, we will make a comparison between the earnings from Network Marketing and those from Online Trading with the same investment.
We will also show you how the best trading platforms like eToro and ForexTB work with their characteristics and the percentages of users who actually earn from trading, even if they have no experience.
Network Marketing meaning
The meaning of the word Network Marketing was born in US after the war, when sales were developed based on a network of direct knowledge.
The actual activity, that is, the sale of a product or service took place with the last line of the Network, which dealt with the promotion and sale, becoming a sort of “representative”.
Over the years, Network Marketing has spread and has taken on several “meanings” some of which have unfortunately degenerated into pyramid schemes and other illegal systems that no longer have the purpose of selling but the recruitment of other members in the network.
New members of a pyramid scheme are usually forced to buy an expensive “starter kit” which is the real purpose of the network. The goal is already achieved and the business becomes illegal and looks like the online scams we all know, such as Profit Maximizer and Crypto Cash.
Network Marketing is often “told” as a free, profitable and meritocratic sales system but often hides many pitfalls, which we will analyze in this guide.
Online Network Marketing
Online Network Marketing takes advantage of new technologies but the aim is the same, to create a network to which to propose and sell products and services.
In a classic Network Marketing, the parent company recognizes commissions for the sale of its products or services. These commissions are divided at the various levels of the network, starting from the actual seller and then going back to his area manager, gradually going up the hierarchical chain.
Obviously there are many companies that have understood the strength of a network even online and try to entice new followers to take advantage of the web to make money, without leaving home.
Online Network Marketing is much less tiring than the classic one, practiced by Kobold, Avon, Amway or Herbalife sellers. There is no need to ring bells or organize meetings, everything is done online (or almost).
Unfortunately, the advantages are not the same as selling in person, everything becomes more difficult online and the myth of easy earning, of living on income once you have created your network, is becoming more and more an illusion.
Of course there are those who make money from direct sales, but the necessary network, developed on social media, YouTube or other platforms, must be extensive and very dedicated to the product / service to offer a constant income over time.
Network Marketing and Online Trading
In this paragraph we want to make a similarity between Network Marketing and Online Trading, they are animated by the same desire for profit and both hide pitfalls, but with substantial differences.
In Network Marketing, those who statistically manage to keep themselves from their network are less than 1% of those who work in the system. Most earn little or nothing for a considerable effort, which for various reasons does not produce the desired results.
In online trading, the average of traders who obtain constant profits is much higher and ranges from 20% to 25% depending on the platforms.
Since now both Network Marketing and trading take place online, we can compare them, in fact they are financial investments that are intended to make a profit.
To do Network Marketing you invest time and money in tools and methods to promote products / services and you risk going at a loss.
Even in trading you invest time and money and you risk suffering losses.
Network Marketing is not all the same, there are illegal pyramid schemes and outright scams.
The scams in online trading are equally widespread unfortunately, not all online brokers are reliable, but there are methods to avoid them, here’s what to pay attention to:
- Online trading brokers must have their registered office in the European Union
- The address and contact details of the office must be clearly visible on the Broker’s site
- The Broker must be in possession of at least one license, provided by CONSOB or CySEC
In Network Marketing, on the other hand, scams are much more difficult to unmask, because companies try to operate on the edge of legality making it difficult to prove fraud.
How Trading Online works
Online trading allows you to invest in financial markets directly online, without leaving home or office.
To negotiate, an intermediary is required which is called a Broker and offers the possibility of buying and selling securities such as stocks, indices, commodities, cryptocurrencies, currencies, etc.
The goal is to speculate on price changes. In practice we must try to:
- Buy and then resell at a higher price.
- Sell and then buy back at a lower price (short selling).
Technically, these operations take place on the platforms of the so-called CFD Brokers, which allow you to trade without paying commissions.
If you want to learn more, we recommend that you download this free Trading Course, in pdf format.
Do you earn more with online trading or with network marketing?
Have you ever heard of Warren Buffett? He is one of the richest men in the world and is also a famous trader. Do you know any salesperson or network marketing manager who has made similar earnings?
Obviously not everyone who trades online gets rich but as we have already said:
- About 1% of those who do Network Marketing really earn
- Over 20% of those who trade online make steady profits
Entry costs are similar, to start trading online you need € 200/250 and the starter kits of the various Network Marketing have comparable costs, often higher.
So with the same investment: You prefer a system where you can hardly raise a salary (if you fall within that famous 1%); or a method that offers you the possibility of practically unlimited earnings (with much higher average success rates)?
Among other things, if you find that trading is not for you, you can stop at any time and get your unused deposit back. In Network Marketing, the starter kit is unlikely to be refunded.
Read also: Famous Traders
Best online trading platforms
Online trading platforms are not all the same, the brokers who offer these platforms can also charge commissions or can make complicated software available.
Among other things, scams must be avoided, which, as we have mentioned, are also numerous online.
For these reasons we have selected the best trading platforms on the market. The most suitable brokers for those who want to start this career in the investment world, safely and without paying commissions:
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 250€
Min. Deposit: 100€
72.30% of retail CFD accounts lose money
Min. Deposit: 250€
Among these platforms, to start we recommend eToro and ForexTB, here is a brief description of these online brokers:
eToro is a truly unique Broker, the most widespread in the world and one of the most reliable, thanks to the CONSOB license it is provided with.
The trading platform made available by this Broker is really intuitive and also allows newbies to trade with ease.
To learn and earn at the same time, eToro offers a service that allows you to copy the operations of the best traders in the world (on eToro) automatically.
Thanks to this feature, called Copy Trading, anyone can earn (if they copy the right traders) and at the same time learn the best investment strategies.
To find out how much you can earn with Copy Trading, here is a screenshot of the returns of some traders on eToro:
Click here and choose which trader to copy
To get started, you can also log into the Demo account, which allows you to practice without running any risk.Sign up for free on eToro by clicking here
ForexTB is another excellent choice to start trading online even without any experience.
The platform is very simple to use but for any need, with this Broker you will have the phone assistance of an expert, always at your disposal.
To learn more, you can download a totally free Trading Course, which allows you to know the rules behind online trading.Download the Trading Course for free by clicking here
This course is free but there are very similar guides that cost thousands of euros and this, in addition to costing nothing, is considered the best on the market.You can sign up for free on ForexTB by clicking here
Network Marketing Europe
The homeland of Network Marketing is the United States, where this sales method actually went out of fashion several years ago, but in Europe we are usually lagging behind the evolution of these sales systems.
Some companies that operate in Europe on a stable basis have real offices in our territory and this is a sign of reliability.
Here are some of the main companies based in Europe:
- EVERGREEN LIFE PRODUCTS
- FOREVER LIVING PRODUCTS
If you are interested in Network Marketing and want to know which companies are truly reliable and law-abiding, we recommend that you check reviews on the Web before making any investment.
Network Marketing earnings
We have already mentioned the gains that can derive from Network Marketing but in this paragraph we want to go into specifics.
Joining the network usually involves the purchase of a Starter Kit, which can cost a few hundred euros, depending on the company.
Initially the earnings will come with the sales to your friends and acquaintances but the greatest income comes from the creation of your network, trying to join new “representatives” under you.
If the fee for joining new sellers exceeds that given by the sale of products / services, the Network Marketnig becomes an illegal pyramid scheme.
In statistical terms, as we have already said, only 1% of participants in a Network Marketing obtain constant earnings. With online trading this percentage reaches 20% with the same investment, there is no need to add more.
Network Marketing opinions
There are companies that use Network Marketing as a business model to sell “normal” quality products passed off as products of the highest quality, so as to justify the high price.
Network Marketing has a very high cost for the company and therefore prices are usually higher than a product of the same level sold in large retailers.
The negative opinions on Network Marketing unfortunately overwhelm the positive ones, both from the point of view of consumers, who do not like to pay more for products that are worth less; both by members of the network who do not earn enough for a considerable entrepreneurial effort.
Regardless of the legality or otherwise of some Network Marketing systems, remember that the company must pay a commission to you, one to the person who introduced you, and so on up the chain.
For this reason, in the end, consumers, convinced that they are saving, realize that they are spending more and leave negative opinions.
If we add to this the fact that only 1% of the members of the Network obtain constant earnings, some of the “representatives” who are part of the remaining 99% will be unhappy.
Unfortunately, almost all opinions on Network Marketing are true, and of these the majority are negative.
Network Marketing is a very widespread form of direct sales, which unfortunately often operates illegally and borders on scams.
There are absolutely legal direct selling systems but it is very difficult to obtain constant returns from this type of business.
In this guide, we compared Network Marketing with online trading because with the same initial investment, with the former only 1% of participants obtain constant returns, while with the latter the percentage exceeds 20%.
With online trading you can also simulate your activity on a Demo account, which you cannot do with Network Marketing. Thanks to the Demo accounts made available by online trading brokers, you can evaluate the platform and services without running any risk.
If the “virtual” earnings are satisfactory, you can switch to real investments by making the minimum deposit required by the Broker.
Here are the official links for free access to the Demo accounts of the best online brokers:
- Access the eToro Demo account for free by clicking here
- Register on ForexTB and try the Demo account by clicking here
It is a direct sales system that underlies the creation of a network of “representatives”.
Only 1% of participants in a Network Marketing realize constant noteworthy earnings.
No, but it must respect some rules, for example the goal must not be recruiting but selling.
In online trading platforms such as eToro over 20% of participants make steady earnings.