What are the differences between a legitimate multi-level marketing company and a pyramid scheme?
A legitimate multi-level marketing company emphasizes reliable products or services. A pyramid scheme uses products or services to disguise its quest for collecting money from the investors on the bottom levels to pay other investors further up the pyramid. In a typical pyramid scheme, new investors must pay a fee for the right to sell the products or services as well as for the right to recruit others into the pyramid for rewards unrelated to products sales or services. Very often the products or services the victim must buy are unsalable, and the pyramid’s promoters refuse to repurchase them. On the other hand, legitimate multi-level marketings companies will buy back unsold merchandise, although often at a discount from the origianl price. Success in multi-level marketing is based on two factors: product and service quality, and the hard work involved in being able to sell the products or services. Recruitment of new investors is secondary.
A legitimate multi-level marketing company emphasizes reliable products or services. A pyramid scheme uses products or services to disguise its quest for collecting money from the investors on the bottom levels to pay other investors further up the pyramid. In a typical pyramid scheme, new investors must pay a fee for the right to sell the products or services as well as for the right to recruit others into the pyramid for rewards unrelated to products sales or services. Very often the products or services the victim must buy are unsalable, and the pyramids promoters refuse to repurchase them. On the other hand, legitimate multi-level marketings companies will buy back unsold merchandise, although often at a discount from the origianl price. Success in multi-level marketing is based on two factors: product and service quality, and the hard work involved in being able to sell the products or services. Recruitment of new investors is secondary. • Question: While browsing around the World
