Pyramid Schemes and MLM Why They're Not The Same?
Hi fellow marketers:
As for some time now people are beginning to see Multi Level Marketing Opportunities as "Pyramid Schemes," so let me clear this out.
A pyramid scheme is a illegal business involving just the recruiting of new prospects in order to make the pyramid work for the ones on top, However a Multi Level Marketing involves real products. With this products the associates can really sell and gain sales commissions plus other bonuses. Many pyramid schemes utilize the sales of wimpy products, or products that have no real value on the market to prevent authorities to stop or shut down the business if found to be illegal. Of course a Multi Level Marketing Business need people to get in and promote the products and sales, that is the heart of Multi Level Marketing, and that is why having a MLM Business have low starting costs, because this way the company won't have to spend thousands or even millions in advertising.
Hopefully I've answered some questions about the differences between Pyramid Schemes, and MLM.
To Success!!!
Thank You
Luis Figueroa
Numis Network ICR# 10987
Real Products, Real Assets.
www.numisnetwork.com
As for some time now people are beginning to see Multi Level Marketing Opportunities as "Pyramid Schemes," so let me clear this out.
A pyramid scheme is a illegal business involving just the recruiting of new prospects in order to make the pyramid work for the ones on top, However a Multi Level Marketing involves real products. With this products the associates can really sell and gain sales commissions plus other bonuses. Many pyramid schemes utilize the sales of wimpy products, or products that have no real value on the market to prevent authorities to stop or shut down the business if found to be illegal. Of course a Multi Level Marketing Business need people to get in and promote the products and sales, that is the heart of Multi Level Marketing, and that is why having a MLM Business have low starting costs, because this way the company won't have to spend thousands or even millions in advertising.
Hopefully I've answered some questions about the differences between Pyramid Schemes, and MLM.
To Success!!!
Thank You
Luis Figueroa
Numis Network ICR# 10987
Real Products, Real Assets.
www.numisnetwork.com
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Comments (15)
Cheryl Baumgartner12
Medical Billing/Coding/Insurance
The quickest and most simple way to tell MLM from Pyramid scheme is where do you make your money? If you are being told that you are making your money off of recruiting and not off of products run. I'm not talking about the overrides you get off your downline because those overrides are generated by product sales.
If a product is not being sold but money is being paid-it's a pyramid scheme every time
Laura Newton9
The Water Filter Lady
Great article Luis. I would recommend reporting the spammers who didnt even read the post, and then deleting their rediculous comments that have nothing to do with your post.
Luis Figueroa9
Independent Entrepreneur
Thank You to all the serious fellow marketers posting real comments, like Andy, Dawn, Juliana, Beth, and Jahnvi. I see there is always a funny person that doesn't take thing seriously.... But - well what can we expect.
murali kodali8
Internet Surfer
pyramid schemes is it eygpt schemes
Juliana Lawing6
Event planner
Oh! thank you for your explanation, there are so many scamming out there we need to know the different inorder to make the right decision.
Joselito Palor4
Plant Combination Man
I'm not involved in any of the two.
Andy Anderson10
Owner Yuma Bloggers
BTW best of luck on the promotion just dropped in to share and grow.
Andy Anderson10
Owner Yuma Bloggers
By the FTC and Unitied Nations convention on Internet fraud definitions a over 90% of all MLM businesses are in fact pyramid schemes and not operated legally. The grounds are the following for being able to tell if your MLM is a scam instead of a legal program.
1. The product is of real or perceived value equal to or greater than the sale price. In short a $1.99 energy drink marked up to $7.99 to cover the pay plan is illegal.
2. Purchase of product must be optional and not mandatory if th
Jahnvi Savnani9
CEO
Useful Information Share By You.
It is useful To All Person.
Fabian Escobar5
diseñador web
were gonna try it later, thanks,success
Dawn C.6
Work at Home Mom
Hi Luis, this is a nice blog post! Pyramid schemes a few years ago didn't even have a product but now they have to be slick or they can get in a lot of trouble. There has been a lot of confusion tho I noticed between the two.
Beth Schmillen10
very good explanation of the difference between Pyramid Schemes and MLM!
MLM is a viable way to earn!
Raul V7
Global Independent Business Owner
Well , were gonna try it later, thanks
Luis Figueroa9
Independent Entrepreneur
That is correct vijiboopathy, if the product is not usable or doesn't have real value, it's a scam.
Vijaya Lakshmi8
Writer, Health Consultant
Thanks Luis. So pyramid scheme is like one kind of scamming in online market?