Networking

By Francisco J. Colayco, Ph.D

Networking is a marketing system. It is not by itself a business. As a marketing or sales system, networking has proved to be quite effective for selling certain types of products and services. In these established companies, the networkers who make good money are those who work hard and are able to organize their own effective sales groups who then produce sustained high level of sales. Their success is the product of serious planning and hard work. The network does not produce the wealth. It is the networkers themselves who achieve it. So unless, you are prepared to work hard, organize and do serious field work, networking is not for you.

There are many leading examples of this. Most of these businesses who employ legitimate networking systems are members of the Direct Selling Association of the Philippines (DSAP).

However, because it has been successful in a number of companies, networking has also been abused and twisted to the detriment of those who join with the mistaken notion that networking is a sure way to make money.

The most common type (and there are many types) of networking structure that has been abused is the “multilevel” type where networkers earn income from the production of those whom they recruit and who fall under their specific structure, usually called their business center. These are called their downlines and each downline is given his own business center. This type and its other variations are not necessarily scams. As a system, it is a legitimate tool. However, when it is used to to generate business through people recruitment without offering any real product or service to the members and their customers, it is pyramiding and is a scam.

Clues For Spotting Networking Scams.

You must check if the company is duly registered and licensed with the Securities and Exchange Commission (SEC) and the Department of Trade and Industry (DTI) in the marketing of its products. Find out what is being sold, what it the selling price to the end user and how much is the cost to the networker. Find out if there is a joining fee and what it is you get in return for paying this joining fee. If you are getting good value for the money you pay to be able join the network, then possibly, the business is legitimate. But if you have to pay a joining fee without getting anything in return, be careful. The network is possibly a scam.

You have to clearly understand how you make your money as a networker. The legitimate way is for you to earn based on actual selling of the products either directly by you or indirectly through your “downlines”. This means that the market price of the product allows for good commissions to be paid out. If however, you make your money through of recruiting of new agents and from the fees these new agents pay, walk away! That system is a scam!