Pyramid Schemes are Illegal. NOT MLM.

Most think MLM is all pyramid schemes. It is not. MLM has a pyramid shape and there are many schemes but the concept behind MLM is NOT as a pryamid scheme.

Okay, I think before I go too much further I'm going to have to start out at the beginning and give a loose definition of just what a pyramid scheme is...

...It is a money making scheme that people pay to join with the expectation that they will be earn much more money when others pay to join AFTER they first joined.

Essentially, a person spends money to join and is told that s/he will get a large return on their money spent to join as others join 'beneath' them. But in actuality, virtually all who join don't even make back their money originally spent to join.

A Pyramid Scheme is a Recruiting Game

A person is paid to recruit others. The pyramid's product is the recruitment of people. There is no other product being shared and this is generally what makes pyramid schemes illegal. At least in North America.

You see, the federal government has strict legislation that outlines exactly what constitutes a pyramid scheme. And although I'm not a lawyer, the general description I gave above for a pyramid scheme is usually the kind of structure and methodology in a business setup that the federal government tries to find out about and then pursue with legal action. And with vengeance.

And why do they do this? To protect people like you who don't and can't tell at the very beginning that something is truly just a recruiting game or pyramid scheme. They know that the only thing that stops you from knowing that a deal you're looking at is one of the many pyramid schemes stems from a lack of information. So they try to be the eyes and ears of the business world, at least in this regard.

Now, let's tie this all into MLM and MLM pyramid schemes.

You see, most people are sold on the concept of MLM in that it is supposed to be a business vehicle that allows people to earn a continued income from the inherent setup of the business structure. And just what is this business structure that allows people to earn this income on a continuing basis?

It's the idea that more and more people join over time and if you are fortunate enough to have some, or most, of those folks join under you, or after you, or beneath you, then you'll earn a continuing income off of any money that they spend to join or when they continue to purchase product from the parent company.

Now this is supposed to be the way it's run.

You join.

Others join.

You all spend money on genuine products.

You all earn money for a long time from all that spending.

Everybody's happy and they live happily ever after forever and ever.

But this isn't the way it actually turns out and has turned out for people for the last sixty years of MLM so that is why MLM is viewed as nothing but a bunch of pyramid schemes and fraudulent business deals existing to do nothing but suck money out of people's wallets, purses, and business accounts.

And this is too bad because MLM really is a beautiful, and ingenious way to make money.

You see, there are many factors that eventually go wrong in an MLM deal that do end up making a deal a pyramid scheme.

Generally, and again I'm not a lawyer, generally...

A product is supposed to be bought and sold to make an MLM deal not be viewed as a pyramid scheme.

Those who join are not supposed to be paid just for recruiting others so as to not have the MLM viewed as a pyramid scheme.

In theory, the last person joining has to be able to make money in the deal otherwise it's viewed as an illegal pyramid scheme.

The product involved in the deal has to be a REAL product for it to not be a pyramid shceme. I believe the ability to pay for membership into something is not considered to be a genuine product.

You cannot 'buy' a position in the company in order to not make it be considered a pyramid shceme. A true pyramid scheme usually allows a person joining to pay a lot of money upfront (that's why it's called 'frontloading') to 'buy' a bunch of product so as to obtain a higher status in the company. This is a grey area and regulatory-wise is usually not looked at too kindly.

Now let me ask you...

When You're First Looking into an MLM Deal Just How are You Going to Know That The Deal Is Legitimate and Not One of the Many Pyramid Schemes in Existence Today?

If you can understand what I'm trying to describe above, you'll hopefully see that to be able to actually know that an MLM deal is not one of the many MLM pyramid schemes existing today is going to take some pretty knowledgeable understanding of how the deal is structured. Not how you are being told and sold, from the MLM website or the MLM distributor trying to recruit you, on how it is structured.

And this is what causes most people to join a deal and spend money to join and spend money to try to get others to join and spend money trying to make it work and then find out that it's nothing but another in the long list of pyramid schemes that is setup so that most people by the nature of the structure of pyramid schemes can't make money from the deal.

You see, the vast majority of the population are not going to be able to tell the difference between pyramid schemes and legitimate MLM businesses until it's too late and their money is looooooong gone up to the coffers of the pyramid schemes parent company.

This is why a government department exists in most countries to find out about and eventually shut down pyramid schemes that disguise themselves as genuine MLM business opportunities.

Now I want to speak a little bit now about the more positive aspect of MLM and although MLM may look like nothing but pyramid schemes it usually is not the case.

I'll explain.

You see...

The Inherent Structure of MLM IS a Pyramid

Over time more people join the MLM deal and so by the nature of this occurring the shape of the organization of people who've joined begins to take the shape of a pyramid. The parent company is at the top of the pyramid and the more recent few souls who joined the deal are usually at the bottom, wider end of the pyramid. However,...

The vast majority of MLM deals are not pyramid schemes.

The vast majority of MLM deals are structured to actually have those who join actually only make money when a product or service is retailed to a 'customer'.

The vast majority of MLM deals do not require a person looking to join the deal to actually have to pay a boatload of money upfront just to join. When this occurs you might want to remember the concept of 'frontloading'. It shouldn't cost more than a reasonable amount to join an MLM deal. And maybe even be free.

On a sidenote...

I remember a deal (that still exists by the way) that required folks to pay almost $1,500 US in order to just join a deal and when you signed up you received, I believe, six audio cassette 'training' tapes. That's it. One thousand five hundred American greenbacks.

I ask you...

Would you be knowledgeable enough now to be able to tell that this is most likely a pyramid scheme's frontloading deal and the vast majority of that fifteen hundred was payout as recruiting bonuses?

I'm assuming you would be able to tell this because you wouldn't get caught up emotionally in the 'all the money you can earn' hype that usually surrounds these kind of pyramid schemes.

See how tricky and hard to spot this pyramid stuff can be?

Please note that the vast majority of MLM deals today are legitimate, honest, well-organized, business enterprises that are in existence to help all involved earn an income from distributing truly useful and working products to the end consumer.

These are the deals you need to find and seriously work if you want to make a living doing MLM.

So again, this all boils down to you, the beginning networker, or the MLM wannabe, doing your homework so that you can readily identify any one of the many schemes in existence today. This is going to take quite a bit of insight and education on the matter so as to be most sure that what you're looking at are truly pyramid-type schemes.

To help you to this end, there's an ebooklet available at my other website called 'Cold Facts Exposed'. This booklet was written by a guy who has over 38 years experience in MLM and is extremely successful in MLM. He knows everything about pyramid schemes and he reveals this knowledge and insights in his ebooklet which you can download for free here. I know you'll enjoy it.

So, good luck.

Keep your eyes open to recognizing pyramids, and stay focussed on your intent of being involved with a legitimate MLM business and program. And do all that you can to run away VERY fast from any pyramid schemes that try to suck you in and spit you out.

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