Pyramid Scheme vs MLM

A pyramid scheme is an illegal, unsustainable business model in which participants receive payment for recruiting others into the scheme, rather than for selling a legitimate product or service. The focus is solely on recruiting new members, with little to no emphasis on selling a product. In a pyramid scheme, as more people join and recruit others, the overwhelming majority of participants eventually lose money.

On the other hand, a legitimate multi-level marketing (MLM) company is a legal business model in which participants earn income by selling products or services, and also receive a commission for recruiting others to become sales representatives. In a legitimate MLM, the focus is on selling a legitimate product or service, and the compensation structure provides incentives for sales, rather than solely for recruitment.

The key difference is that in a pyramid scheme, money is made through recruitment, whereas in a legitimate MLM, money is made by selling a product or service.

Hi, I’m Horace Chor, and I’m a direct sales and MLM consultant. If you’re interested in learning more about our services or have any questions, feel free to check out our website NetworkMarketing.my. Additionally, I would recommend consulting with an advisor who specializes in this field for specific legal advice for your business.