How Do You Distinguish Between A Pyramid Scheme And Multi Level Marketing?
• Understand the definition: A pyramid scheme is a non-sustainable business that involves the exchange of money, usually in the form of a sign-up fee, and usually has no product or service. Know that pyramid schemes are ILLEGAL! The only people that are able to make money on a pyramid scheme are the people at the top of the pyramid. • The above picture proves that pyramid schemes are unsustainable. As stated above, because pyramid schemes offer no product or service, no possible way exists for the people at the bottom of the pyramid to make any money. The only way to make money in a pyramid scheme is to sign-up new members for a fee. However, as the above picture shows, this becomes impossible when the scheme reaches a certain level. The end result is that people can spend upwards of several thousand dollars to enroll in one of these scams and will end up losing everything. • Learn the common elements. As the United State Securities and Exchange Commission states, “[t]he hallmark of th
