Pyramid plan and multilevel marketing: the difference

in LeoFinance3 months ago

The economic crisis contributed to the emergence of fraud. The despair caused by unexpected unemployment or long-term conditions, anxiety caused by the accumulation of personal or corporate debts, panic caused by the stock market crash and other unfavorable situations in times of instability can lead people to seek quick solutions to income generation, namely through the pyramid plan. Some programs are now easy to spread digitally and appear to be very simple and fast. Packed in seemingly legitimate and harmless correspondence, they guarantee generous returns. But nothing more. plan. These plans take advantage of fragility, uncertainty and chaos as the situation we are currently experiencing in the context of the pandemic and the impending economic crisis.
Today, I will share one of the most common schemes in this situation, the "Pyramid Scheme", and will continue to present how to raise the alert to identify this type of fraud.

(image taken from the internet)


Today, the pyramid scheme is still a common fraud, corresponding to the scheme of illegal hierarchical configuration. When individuals, the original "investors" (at the top of the pyramid) try to recruit members ("investors") to work for their "company" on an ongoing basis, we will face this type of fraud - ensuring that funds continue to enter the program. The joining of new members involves only an initial investment of payment to recruiters, and guarantees return through the continuous participation of new members. This is a simple method: the entry of new participants benefits the recruiter and all members above the pyramid - the greater the benefit, the greater the membership. New elements that are constantly renewed form the base of the pyramid - and "feed" the members above. By analogy, this appears to be an endless process - until no member enters the pyramid and collapses.
In other words, the company only makes money with the entry of new members, and besides the entry of new members, there is no other business model for the survival of the company. Pyramid schemes are often confused with legitimate marketing strategies (such as multilayer marketing). However, this is not the same thing. In fact, multilayer marketing also involves the continued membership of new members, which means using objective methods to market products and / or services. The company recruits members as sellers of its products and pays them a certain percentage of sales. There is a profitable business model behind this. The pyramid scheme, generally known for its aggressive approach, may not even involve sales. In some cases, it involves sales, but it is not these sales that make the company profitable, but the entry of new members.

(image taken from the internet)


### # Multilevel marketing is a strategy based on the direct sale of products and / or services and the establishment of a network of "distributors" for the same products and / or services - this is where it is often confused with pyramid schemes: distributors can encourage They recruit new distributor members under them - in order to obtain a certain percentage of sales. And so on, with a "pyramid" structure. However, this is not a scam. The ultimate goal is always to sell products and / or services. Among the popular direct selling companies that use the law for legal activities are Herbalife (which produces and distributes weight control and personal care products), Yves Rocher (which makes and manufactures beauty products and beauty products) and Walker ( production and distribution of household products, such as the famous Thermomix food processor). among others

How to distinguish marketing strategy programs?

##The difference may not be immediate or linear. Therefore, I recommend that you always look for "opportunities" before investing time and money. Pyramid plans tend to focus more on recruiting new members than on selling products and / or services, which require (usually large) upfront and even monthly investments - and multi-tier marketing may not even involve significant financial investment. , requiring (is) Availability. Therefore, you will have doubts about the opportunity in the following situations:
-You must invest "a lot" in advance to become a member / distributor.
-If the focus is on recruiting, not selling products and / or services.
-Not paying attention to the market (demand) of the product and / or service.
-I don't understand the company's business model or how to make money.

*More: If you think the plan was established to recruit new members instead of selling related products and / or services to make money, doubt the suggestion. It also strongly indicates that this is a pyramid scheme.

In short: be fully informed, when in doubt, do not take risks! If it sounds too good to be true, it can be. I hope everything is fine with you, see you soon*


The MLM business model is very powerful and have made alot of legitimate folks
alot of money over the years.
For the right type of person, with a solid legal company and actual good products,
it can change people's lives.
Fact is most people like myself it is not good for, I simply would not do the work needed done.

Signs of pyramid schemes.
1.High cost upfront.
2.Pushing closer want you to join today regardless of your situation.
Once saw a guy told a woman to use her rent money to join,
he will help her get it back......slimmy
3.what is the product? if you cannot understand it or explain it, move one.

MLM is not for everyone, just be cautious; ruthless sale people still exist.
Plenty of other options available for us common folk