What Are "Pyramid Schemes"?

Pyramids, MLM, Network Marketing... What is the difference and why would one choose one over the other?

People have given a bad name to Pyramids. In my opinion they have been given new names such as MLM, Network Marketing and even some Direct Sell opportunities, when you really look at it, it's structure will resemble a Pyramid.

Whatever you are involved in currently whether online or off, whether you offer products or a service, there is some type of structure involved either a education followed by certification, license and the customers that you provide your product or service to.

Or some one introduced you and a few others to a product/service that came with the opportunity for you to profit in some way by sharing it with others. Also those that you share this product/service with are given the same opportunity if they also share.

Is this apart of marketing and an incentive for the word of mouth promotion of ones product or service.

As a Stylist/Massage Therapist by trade, one in this profession would give their customers a free or discounted service for referring new customers. As the chain reaction continues of people referring others it becomes a Pyramid with the Stylist at the top reaping the benefits of a money producing client base and customers benefiting from referring others. 

Everyone Wins

So my question is what is the difference in a Pyramid whether online or offline, internet marketing or other, and is it really a bad thing.

Love to here your feedback.

Thanks

Anginetta  

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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Sean North   Business Hi Anginetta, what you describe in your example is not a true pyramid scheme more a offline affiliate - networking scheme, A true pyramid is where those at the top benefit and those at the bottom receive no benefit at all, in your example both business owner and customer referer receive a benefit, business owner increase in business, cutomer a discount on price. Oct 23rd 2010 02:18

Anginetta W.   International Marketing Consultant So true Sean, and the reason i used my offline business as example i to show the power and benefits of referring others. When you join an affiliate or networking program you are at the top of your own organization, and those that you refer grow your organization. and the same for everyone else who join and build. Those that simply join and do nothing will not expand their direct level in their organization. The strategy and techniques are the same just word used to describe them are different. At the top or bottom if you do nothing, you make little or no money. Oct 23rd 2010 03:01

Sean North   Business yes I agree but they have the ability to earn Anginetta, my point is that in a true pyramid you can work yourself into the grave and only the top few will profit, eg guy 1 sells a widget for $5 to guy 2 who sells it to guy 3 for $10 and so on, there come a point shortly after where there is no way you can sell the widget on because it's price is beyond the market so the person at the bottom of the pyramid is never going to be able to make any money and by this time those at the top have raked it in folded and left town Oct 23rd 2010 03:13

Anginetta W.   International Marketing Consultant Thanks for the feedback Jul 2nd 2011 10:25