OK, I’ll say this again: MLM IS NOT A PYRAMIDE SCHEME! Period!
Do I have proofs? Yes, I do, and now I’ll share them with you.
When I decided to step into the exciting world of network marketing, I was lost in the sea of many different companies and different strategies. After a few weeks of research, I’ve found the company that is very interesting. Searching the web for info about that company, I’ve found that their marketing is based as MLM (Multi-Level Marketing).
And yes, when I searched Wikipedia for MLM, my first association was that this is a pyramid scheme. Because, I admit, it looks like one. But, after further searching, learning, talking, I realized that these two things are different. I’ll try to explain both MLM and Pyramid scheme, and I hope that you’ll see the difference.
Here we go.
Pyramid scheme. Wikipedia.org says: A pyramid scheme is a non-sustainable business model that involves promising participants payment primarily for enrolling other people into the scheme, rather than from any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud.
And this is clear. In pyramid schemes someone, usually some financial institution, offers you a PROMISE that you’ll get big amounts of money, and all you have to do is to pay $xxx and bring some people to do the same, and you’ll make a profit. You don’t get a product, you don’t get their business plan, you get only a PROMISE! And of course, only few people will profit from that, while others will lose everything.
From obvious reasons, pyramid schemes are illegal in most countries.
MLM. Wikipedia.org says: Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a downline of distributors and a hierarchy of multiple levels of compensation. Other terms for MLM include network marketing, direct selling, and referral marketing.
So, MLM is a legit marketing strategy. What separates MLM from other marketing strategies is that MLM pays in several levels, usually from 2-5 levels.
When you join to some company that has MLM type of marketing, you actually buy a product of that company. It can be cosmetics, web domain, wellness program, ebook….and buying that product you get an opportunity to earn money referring others to buy it, and you can be paid in more levels.
I hope that you can see the difference between MLM and Pyramid schemes.
In Pyramid schemes you get only a promise that you’ll get great money. In MLM you buy a product that you’ll use, but also you get an opportunity to earn money by referring others to buy that product.
And how to know that some offer is MLM or Pyramid schemes? Well, make a research, ask, talk, explore…spend some time to find people who are already in that company and talk to them.
Most important, don’t create some bad opinion just because you “think that it is scam”. Make a research, talk to people, think, and then make a decision.
I hope that I managed to clear the difference between MLM and Pyramid scheme a little bit.
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