” . . . just another one of those pyramid schemes,”
That’s often the first thing out of their mouth when many people are introduced to an mlm opportunity.
That is often their understanding based on what the business looks like when it is presented to them on paper.
And it partially due to the fact that there HAVE been some illegal network marketing scams in the past. Knowledge is priceless and so is education.
It definitely pays to be knowledgeable about the difference between an mlm company and a pyramid scheme. It will help you know what to look for and what to avoid in an mlm business or comp plan structure.
Judging a business based on the type of model it uses would somewhat be unfair.
If that were the case 95% of businesses in existence would be considered a pyramid scheme!
The following will give you a better understanding of business models and different pyramids to look out for.
Most business hierarchy’s have a pyramid system where the CEO is at the top making the most money.
Under the CEO would probably be the CFO and COO.
Under them would be the board of directors.
Then you would have your management.
Last but not least and working the hardest are the people on the bottom of the pile.
they are the ones you see at the cash registers taking your payment or
the waitresses or waiters on the floor taking your order.
Or take a prison for example….In some prisons you have one Warden, then the Major, then maybe 3 Deputy Wardens underneath
them. Possibly five or six captains come after that. Underneath those
five or six captains are maybe ten Lieutenants. After that on the
ground level doing all the dirty work would be about 100 to 200
Most businesses whether it’s profit or
non-profit operate in a pyramid structure but they prefer to call it
something OTHER than a pyramid.
What IS A Pyramid?
Any network marketing is legal if you can sell or promote the product that is offered by the MLM company and earn money.
might earn more money if you introduce (recruit) others into the
business but it is not a requirement to do so to earn money.
There are in fact some Pyramid Scams disguised as MLM companies or Network Marketing Businesses.
The way to tell the difference is simple.
Ask yourself if the mlm company offers a product or service of value. If the mlm company requires you to recruit in order to make money, it should be considered a red flag. Remember that pyramid schemes and Scams are made to sound good and people are fascinated by the idea of making fast money. This can usually lead to poor decision making. You owe it to yourself to do your research. And also….Pyramid Schemes USUALLY don’t come with a customer support department. And don’t ever let anyone tell you that you make a gazillion bucks your first year in network marketing – it simply aint gonna happen. It takes time to learn the ropes and to build your business, just as in any other venture in life. The beauty of network marketing is that you get to build YOUR empire with time, that will pay YOU as the CEO some day for all your hard works and efforts!