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All the new and established names are at Milan's international furniture fair.The difference between pyramids and multi-level marketing
There is nothing new about pyramid schemes. They have existed for the last 100 years in the US. Now that our American cousins have become wise to the tricks and traps of these schemes, the conmen have crossed the waters to find new victims. Locals have also jumped into the fray, so we are now faced with numerous pyramid schemes that promise wealth but deliver poverty.
The people who are at the top of the pyramid clearly make money but as the momentum fizzles out or the authorities close in on down, the people at the bottom lose their shirts. Many people get confused between pyramid schemes and multi-level marketing. This is not surprising because they function in much the same way. A pyramid scheme is a money-making system that creates income from getting people involved in the business and not selling a tangible product or service.
Multi-level marketing ventures usually have a legitimate product on offer, unfortunately many pyramid scheme operators have designed so-called “products” to legitimise their business
If people are sold a real product or service with the ability of making money off of reselling it as a benefit, it is a legal MLM programme.
If people are recruited into the business with hopes of making a lot of money off by getting other people involved, while selling a poor product, that is a pyramid scheme or illegal MLM.
Some of the really bad pyramid schemes even go one step further. They don't even have a real product or service at all. Getting people signed up is all they do. Most of them will of course claim that they are not a pyramid scheme but that is not true and easily provable. It's all about the product. Ask yourself if you would buy the product without the lure of the additional remuneration of the scheme. If the answer is no then you may be looking at a pyramid scheme.
Another way of discerning between the two plans is to evaluate the product on offer. If the vendor cannot produce hard evidence that the product or service exists, leave it well alone. They may tell you that the supply and delivery of the product is a secondary issue, and focus your attention on the potential earning you could make. See this as a warning signal that the product is of questionable value. A MLM scheme has a solid and useful underlying product. Examples of legitimate MLM companies are Amway Herbal Life and Sportron.
