How do I recognize pyramid schemes?
Posted: Thu Jan 30, 2025 3:37 am
The main distinguishing feature is that in multi-level marketing the sale of products is the main business and everyone is free to recruit new members, whereas in pyramid schemes the sole focus is on recruiting new members and you receive a so-called "bounty" for this. This bounty is usually the only way to earn money in pyramid schemes, because there are often no products or only inferior products. A reputable network marketing company is therefore also based on the sale of high-quality products at market prices.
The payment of the bounty is algeria telegram screening financed by another illegal machination in pyramid schemes: new members have to "buy" their way into the system at the beginning, i.e. they have to pay a relatively high amount of money without receiving anything in return. This amount is then distributed to other members as bounty. Furthermore, in multi-level marketing all sales levels are treated equally with regard to the purchase price of the goods to be sold, whereas in pyramid schemes the higher level has to sell a product to the level below it with a commission. At some point the product will be so expensive that no one will buy it anymore. The last person will be left with the completely overpriced products.
In network marketing, however, the purchase prices of the products and thus the earning potential are the same for all levels. Although those at the top earn a share of the commission of those at the bottom, those at the bottom still get their own commission.
The payment of the bounty is algeria telegram screening financed by another illegal machination in pyramid schemes: new members have to "buy" their way into the system at the beginning, i.e. they have to pay a relatively high amount of money without receiving anything in return. This amount is then distributed to other members as bounty. Furthermore, in multi-level marketing all sales levels are treated equally with regard to the purchase price of the goods to be sold, whereas in pyramid schemes the higher level has to sell a product to the level below it with a commission. At some point the product will be so expensive that no one will buy it anymore. The last person will be left with the completely overpriced products.
In network marketing, however, the purchase prices of the products and thus the earning potential are the same for all levels. Although those at the top earn a share of the commission of those at the bottom, those at the bottom still get their own commission.