The Best Way to Answer the Infamous, “Is This A Pyramid Scheme?” Objection

Over the past couple of weeks my business partner and I sent out a series of survey questions where we polled hundreds of network marketers from our email lists, facebook groups and members of our 100 day biz builder challenge. The purpose of the surveys was to determine where you required the most help and guidance in order to have the biggest impact on your results and your profits. 

We determined that most of you desired more training in the area of prospecting and recruiting. Specifically what to say to prospects to peak their interest and get them to join your business. We then sent out another 3 question survey to dig even deeper and find out where exactly the challenges arise in the area of prospecting and recruiting.

We received answers like, “how do I overcome phone fear or fear of rejection?”

And what do I say when the prospect says, “I don’t have the time,” or “I don’t have the money”

And of course the infamous, “is this a pyramid scheme” objection, which I will educate you on and help you answer in this post. I will do this by first letting you know why most networkers get that objection on a “vibrational” level then give you specific examples of exactly what to say and how to answer it.

Click here now to learn about and register for our live interactive prospecting training!

Why do I get the “Is this a pyramid scheme” objection?

Many network marketers get this question all the time but I challenge you to ask any successful network marketer when the last time they received this particular objection. Go ask your companies #1 income earner or anyone you know who is making BIG MONEY in the industry and I guarantee they’ll tell you that they rarely, if ever get this question.

Here’s why…

… First they portray a level of confidence when they are dealing with prospects. They lead the conversation and they don’t for a mili-second give up control of the conversation. If your prospect senses a level of uncertainty and a of lack of confidence they will usually tend to walk all over you and interrupt you with objections like, “what is this all about?” and “is this a pyramid?” Confidence and posture will only come through education, time practice and experience.

Secondly, leaders rarely deal with uneducated prospects. They set up their marketing in such a way that attracts the right people and deters the broke, weak people who are likely to ask questions like, “is this a pyramid?”

If you are speaking with your prospects and you’re thinking, Oh I hope they don’t ask me if this is one of those pyramid things, I can pretty much guarantee that they will ask. However, if you don’t send those signals, you won’t get those questions. 

Does that make sense?

Another reason newbie network marketers get the “is this a pyramid scheme” objection is because they’re not really sure if their business is or isn’t a pyramid scheme. They probably know that their business is perfectly legal and legitimate.However I have heard of networkers quitting because their broke friend Bob told them to “be careful because that those things are illegal,” lol.

Let me finish this part of the content by asking you this, Do you know what a pyramid scheme is?

I don’t believe most network markers really know what the actual definition of a pyramid scheme is. So if you don’t know, your prospect definitely don’t know.

What is a pyramid scheme?

The actual definition of a pyramid scheme is something where money is exchanging hands but no product or service or value is given in return. A pyramid scheme is also knows as a money game or an airplane game. Picture an airplane with 100 passengers. In the airplane is of course also the pilot and the co-piot. Lets say you sell “tickets” onboard your imaginary airplane for $1,000. When your passengers pay their $1,000 for a seat on your airplane all the money goes to the pilot. The “pilot” cashes out and makes $100,000 in one day and then the co-pilot assumes the role of the pilot and the game starts all over again. That is of course until the FTC comes in and shuts it down because people in the back of the airplane complain about getting ripped off.

That is an example of an illegal pyramid scheme. And it is very different than the 114 BILLION dollar completely legitimate network marketing industry that you and I are a part of.

P.S. There are many people, myself included that believe the US government run social security program is the largets pyramid scheme in the history of the world. There are young people like myself who have been paying social security taxes for years under the assumption that when we reach old age we will receive social security benefits in the form of money. However, experts believe that the social security program will have been flat broke for years by the time my generation reaches age 65 and we will never see a dime of that money. Talk about a pyramid scheme, right? 

If you would like to learn more about pyramid schemes and how they differ from the powerhouse legitimate network marketing industry I highly recommend the book by Burke Hedges titles, “Who stole the American dream?”

What to say when your prospects ask, “is this a pyramid scheme?”

Answering this question effectively depends on a few factors.

The first factor is, at which point in the conversation do they ask?

If you introduce yourself on the phone to the prospect and within the first 30 seconds of the conversation they interrupt you with, “Is this a pyramid scheme?” That is them trying to take away your power and control the conversation. You could reply and say, “why do you ask?” or, “why are you looking for one because if you are I can’t help you and we might as well end the conversation right now?” This immediately takes the power back from them and gives you control of the conversation because the person who is asking the questions is the person in control of the conversation. You will often find them saying, “wait a minute.” And then re-ingage you in an actual conversation about your business.

Now if you’ve been talking on the phone to your prospect for a few minutes and you learn about them and what they do for a living, where they live and what their goals are, like you should do in any effective prospecting conversation and then they pop the question, “is this one of those pyramid schemes” the answer is a bit different. In this situation I like to very calmly and collected ask, “what do you think a pyramid scheme is?” (again most have no idea).

I would then follow up by saying something like, “are you even open to looking at something that could change your life and get you out of the (FILL IN THE BLANK PAINFUL SITUATION YOU UNCOVERED BY ASKING EARLIER IN THE CONVERSATION)??? 

This is also a good way to answer the “pyramid objection” AFTER your prospects have watched the presentation. If your prospect has watched a presentation detailing your network marketing business opportunity and they start the follow up conversation with, Uneducated prospect: “is this one of those pyramid things” you could simply say, You “well what do you mean? Could you do me a favor and explain to me what you think a pyramid scheme is.” uneducated prospect, “well its one of those things where you get your mother and your brother and they go out and get people to sign up and you all make money” You “thats exactly what it is, its actually not a pyramid scheme, those are illegal, but it is a way to get paid off of the efforts of other people the way rich people do. Have you ever considdered getting paid off of the efforts of other people rather than slaving away to get by on just your own effort?” 

You see how the answer to their question is always followed up with a question from you? That is what we call a U-turn and its very powerful!

Those were just 3 examples of different points in the prospecting conversation where you could potentially get the, “pyramid objection,” and how to effectively answer it in each instance.

What to say when your friends and family ask if you are in one of those pyramid thingies?

What if its someone close to you asks you the question, is this one of those pyramid schemes? 

Now when we are prospecting our warm market (friends and family) it can sting a bit more when they say things like this. And again the best answer really depends when in the process they ask the question just like I explained above. I personally have friends who throw around terms like pyramid or say things like, “how’s the pyramid thing going?”  to which I now have the luxury of replying, “great I made $700 yesterday and I only worked 3 hours. How’s your 9-5 slave labor desk job going?”  That usually shuts them up pretty quickly : ) 

I realize that you may not be able to say things like that just yet….

But no worries though.. I have a solution for that one too!

is this a pyramid schemeIf your friends or family members come at you with the pyramid objection and they are really trying to understand what you do, I would recommend they read books like, “Who Stole The American Dream” which sheds light on the network marketing industry and pokes back at the corporate and traditional business model and how its outdated and produces angry dissatisfied people who are reaching retirement broke and frustrated. Also books like, “The business of the 21st century” by best selling financial education author, Robert Kiyosaki, where Robert champions network marketing as the perfect business model for the 21st century and a solution to the unique financial challenges we are facing in it.

Unfortunately, we all have people close to us in our families or our circle of friends who don’t want to understand what it is we do in network marketing. They would much rather keep their pre-conceived notions of it, because it allows them to stay safe in their own little worlds. They may even bash us for taking the path less traveled and taking a risk. If this is the case, always remember that it says more about them and their insecurities about not going after a better than mediocre life, than it ever does about you!

Stick to your commitment to a better life for you and your family and they will eventually come around… Or die, which ever comes first, lol.

If you found the answers to this objection helpful to you check THIS EXCLUSIVE TRAINING my business partner and I put together all about prospecting, recruiting and objection handling in your business. We will cover how to answer other common objections like, “how much money have you made” and “I don’t have the money, time, etc.Click here now to register for our live interactive prospecting training!

If you took some value from these insights please share this content with your social media audiences via the “share links” above and leave me a comment below.

Adam Chandler


adam chandler cancun




  • BG Jenkins

    Reply Reply March 30, 2012

    Words of wisdom and strategies used here to move past the skeptics. Thanks for giving them to us to use.

  • Carmen

    Reply Reply April 1, 2012

    This is great advice. I’m glad that you wront this article.

  • Mike Penny

    Reply Reply April 2, 2012

    Hi Adam,
    Thanks for the tips! Posture and leadership here is Awesome!


  • Val Heisey

    Reply Reply April 2, 2012

    Thanks Adam for these great comebacks. I think the most difficult one is when those closest to you don’t believe in the model. They say they will believe when they start to see results, but until then, they are skeptical and unsupportive.

  • Jamella Biegel

    Reply Reply April 2, 2012

    Hi Adam,

    What a great post on informing people what a pyramid scheme is and how to respond to people who truly don’t know what a pyramid scheme is. Knowledge is power!

  • Luke Chandler

    Reply Reply April 2, 2012

    I actually had one of my best friends comment on a blog post I shared on my facebook page. I wish I would have seen this blog post so I could have responded in a positive way. I just called him a DICK and deleted the comment. LOL

  • Nancy

    Reply Reply April 2, 2012

    What a great post. I love this objective, and love your post. Great reminders! I will be back to read this again.

  • Henderson Blackett

    Reply Reply April 6, 2012

    I just love this, it reminded me of Ray Higdon’s speal on the same subject. Both are on the mark, this information I will try to memorize daily. Thanks again!

  • Corrie Nairn

    Reply Reply April 10, 2012

    Thanks Adam, you put it so well, I can’t wait for the next time I am told “It’s a pyramid scheme”. ~ Brilliant!!

  • Patrick McConnell

    Reply Reply April 18, 2012

    Yup I think most of the other commentators have summed it up. I’ve found most people couldn’t identify an illegal pyramid scheme if they saw one and don’t stop to realize that all organizational structures are in effect ‘pyramids’

  • Etieno Etuk

    Reply Reply April 25, 2012

    Great post, Adam. I’ve learned a ton from the way you handled/answered the different objections one might get in the course of prospecting. You always bring a ton of value and that’s why I enjoy reading your posts. I like how you point out that pyramid schemes are illegal. Most people don’t understand this fact.

    Thanks for sharing.

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