Is an MLM (Multi-Level Marketing) Considered as a Scam?

What's the difference between MLM and the Pyramid scam?

Aren't most organizations a MLM or Pyramid scheme?

Why are people so against pyramid schemes or MLM schemes if almost all organizations are built like it?

I would like some serious answers, please I really need to know and understand.

IS MLM CONSIDERED A SCAM?
A scam is to cheat to defraud someone. Assuming people are able to know what they are getting into, than it is not a scam.

Where MLMs become a scam are in the "fake it until you make it" nonsense where everyone pretends they are making money they are really not. MLMs are also saturated with fake and unverifiable numbers of their top earners. Everyone knows a top MLMer that is supposed to be the example of success yet in nearly all cases (for those in the â€œknowâ€) these people either make most of their money outside the MLM (from other occupations, business, or even training materials to the very MLM prospects they are looked up by), or just plain donâ€™t make the money at all (sometimes living very deeply in debt to leave an impression of wealth). This is VERY common among all major MLM companies as a tactic and thus this practice IS scamming.

WHATS THE DIFFERENCE BETWEEN MLM AND THE PYRAMID SCHEME?

A pyramid scheme (also known as a Ponzi scheme) is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme.

MLM a business-distribution model that allows a parent company to market its products directly to consumers by means of individual distributorships who can earn on personal sales, the sales of other recruits, and bonuses from recruiting on successive levels.

MLM is different in that it offers products or services that recruits can sell. Without the products or services, MLM is the exact same thing as a pyramid scheme.

ARENâ€™T MOST ORGANIZATIONS A MLM OR PYRAMID SCHEME?

No, most are not, some are.

The common misconception is that the mere shape of an organization makes it a pyramid scheme. The shape has nothing to do with the issue. This is a tactic used as MLM propaganda to thwart attention away from the issue. For example:

The lowest level worker working at a McDonalds may be the fryer or janitor. They are paid for frying or cleaning. They are not required to recruit other fryers or janitors to receive compensation. They are paid in direct relation to their work they provide.

Conversely, in a pyramid scheme, you are paid only when you recruit someone. If you recruit no one, you are paid nothing. If you recruit heavily, you are paid heavily, and no longer are at the base of the organization.

Pyramid schemes are non-sustainable because in order for each level to make money, a geometrically larger and larger amount of people need to keep entering. At McDonalds, in order for the fryer or janitor to continually be paid, they only need to continually do their job.

MLM is far closer to a pyramid scheme than McDonalds is, thus the relationship in the mere shape of the organization is inconsequential, and as I said, a blatant thwart from the real issue.

For any MLM to truly distance itself from a pyramid scheme, it should be evident that individual reps are able to earn a living without the need to recruit others. Recruiting others should be a tool to advance within the company. If no one is able to support themselves without the need of recruiting others, than just like the pyramid scheme, it is un-sustainable.

WHY ARE PEOPLE SO AGAINST PYRAMID SCHEMES OR MLM SHCEMES IF ALMOST ALL ORGANIZATION ARE BUILT LIKE IT?

This is faulty logic as it is based on a false premise as explained above.

It depends on how you define SCAM.

Most MLMs are perfectly legal. They sell an average product at a super premium price. Not smart but not illegal. Pyramid Schemes are illegal. They generally have no product or a product that doesn't make much money and the only income opportunity comes from recruiting new suckers.

The SCAM reputation for legal MLMs comes from the fact that, if you join one, there is a better that 90% chance that you will lose money and quit within 2 years. Most people don't realize that the biggest money makers for the people at the top are the training seminars and products.

I don't buy the "...most organizations are pyramids..." argument that MLMs make. I am not required to recruit other people in order to make money at my job. I am not required to sell some overpriced vitamin or fruit juice to friends and family when a comparable product can be found in stores for less than 1/4 of the price the MLM is charging.

I have seen people poor thousands of dollars in to a MLM and, after 10 years, be closer to bankruptcy than wealth.

A very basic answer to the difference between MLM and the Pyramids ?

MLM will have a product/service where you will earn money from the volume of product that people in your network buy.

Pyramids usually people exchange money with no product/service, usually only one person is paid when they have moved to a particular position ie: top of the triangle/pyramid

Yes you are quite right regarding the structure of organisations... eg: Govt. - President - Senators - Advisors - Public
School - Principal - Heads of Dept - Teachers - Students
Co. - Boss - Supervisors - Team Leaders - Workers
But no money is changing hands for no prod/service in these structures

Alot of people have lost money in both... in Pyramids they may have paid money to join the scheme but it may have collapsed before they reached the top of the pyramid therefore they would not have been paid the money promised once they'd reached the top.. they did'nt reach the top.

In MLM they had paid to join, spent money on products, invested time and money recruiting people to join under them and promoted the opportunity only to find that the company may not be stable, owners may run off with the money, they may not be able to pay your commission cheques.... sometimes its not the company it is the people not working the program that is the prob... the list goes on

Alot of the time all these schemes/plans/systems work its actually the people involved who fail to work at them...
I hope this helps...

MLM means Multi-Level Marketing its also referred to as Network Marketing. It is a method of direct selling where one company promises commissions and rewards but not a salary to people who market their product. They usually involve a sign up cost which is usually you buying whatever the product and then having the rights to sell said product. Some are better than others and a few are scams. If you look at the opportunity and do your due diligence you can weed out the scams and the not so great ones and find true opportunities.

A Pyramid Scheme is always a scam. It is something in which there is no product or service and the people close to the top make all the money and the people at the bottom of the pyramid get ripped off. They are illegal in many countries. The way they work is money is paid out up the pyramid from the money people pay at the bottom of the pyramid to join. When nobody joins anymore nobody gets money and you don't have anything.

The reason why they are equated is because both involve levels and both involve money traveling upward to those levels. Recognizing the difference between opportunity and scam is important so good for you for posing this question!

My husband and I recently decided we would look for an MLM ourselves. I hated the idea of selling fruit juice for $40 a bottle which is a common one and was very wary of being scammed. We found one we really liked which lets us sell a product we truly believe in and can use (ridiculously cheap resort holidays). We also did a bunch of investigating to be sure it wasnt a scam. so far we signed up before xmas and are already doing sales. Its fantastic and I highly recommend it. http://www.buyinfiniteincome.com/?tid=bg

Also if you want a little clue why a lot of people accuse MLMS of being a scam go here http://infiniteincome.wetpaint.com/page/Home%20Based%20Business%20Scams

MLM is a pyramid scheme that uses token merchandise just because it is then technically legal. I think. I don't get involved in these scams, that's why I haven't been burned.

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