Is MLM- Multi-Level Marketing related to illegal pyramid schemes?

Answer 1

It's too bad someone posed as something other than what they were really selling/doing; however, it's harshly erroneous to equate all MLM companies with illegal pyramid schemes. Au contraire. Network marketing (often called "multi-level marketing") is quite legal, and in many cases, the companies have legitimate, high-quality products -- and business models -- that make a difference in the lives of consumers as well distributors.

See what Entrepreneur.com says about the difference between network marketing and "schemes." I will post the article link separately. Thanks.

The previous poster copied and pasted an advertisement for his MLM (multi-level marketing) scheme and tried to pass it off as a business. It is not. MLM is a sales game where one person pays other people to let him or her attempt to get others to pay him or her for the same right. It is not a business. It is a scheme (hence the usage of scheme a few sentences ago). I removed the original post because real entrepreneurs would love to see MLMs disappear completely. Real entrepreneurs create value in the marketplace. MLM participants basically move money from person to person. The few people who start their own MLMs would be better off coming up with creative ways to add value to society instead of spending their time coming up with new words to explain MLMs (matrix, reverse flow, downward arrow, but NOT pyramid...because we all know pyramid schemes are illegal [as are the others, but people think they're not because they're called something different...a crook by any other name is still a crook!]).

In addition to everything that has been said: MLM and pyramid schemes are completely different things. Whereas MLM companies rely on continuous product movement (sales) to earn money, pyramid schemes rely on recruiting people to earn money. It easily follows that a good MLM company has great products people will buy again and again.

MLM is simply similar in structure to pyramid schemes, but they are two entirely different things. Pyramid schemes scam people out of their money; MLM companies give people a new, great opportunity to make money the honest way.