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MLM vs Pyramid Scheme

The future and opportunities in the MLM business sector are increasing at an exponential rate. So, it’s an obvious choice to jump in and be a part of a highly profitable MLM plan.

While you are deciding your ideal MLM plan, you may be unknowingly enrolling yourself in an illegitimate pyramid scheme, disguised as a MLM plan.

So, the question arises, what is the difference between MLM and Pyramid scheme?

To calm your nerves and also to save you from investing your hard-earned money in some scam, this article will enlighten you with MLM vs Pyramid Scheme.
Let’s dive in for more details.

MLM vs Pyramid
8 Dec, 2018

The Basics Of MLM and Pyramid Scheme

Multi Level Marketing or Network Marketing is a lucrative way of expanding your business & products via a chain of highly functional distributors and a governing MLM plan.

Pyramid Scheme is an illegal and fraudulent means to generate profits. It is mostly disguised as some kind of a MLM plan which involves recruiting numerous persons as distributors.

MLM vs Pyramid Scheme

Multi Level Marketing is a legal marketing strategy which focuses on the distribution of products. This distribution is mainly carried out by certain individuals called as distributors and these distributors have the option to add another tier of distributors below them, hence creating a hierarchy.

All of the actions and events occurring in a MLM business environment are governed by a MLM plan. And, the profit is purely generated by selling the products.

The sales also generate a decent commission for the distributor and also when his recruited workforce makes a sale.

In the case of Pyramid Scheme, the main focus of illegal profit generation is on hiring new individuals into the scheme and charging a start up fee from each of them.

No notable products or services are involved in Pyramid Schemes.

Some Final Words

Now that you are aware of the difference between MLM and Pyramid scheme, you now possess the ability to weed out the fraudulent Pyramid Scheme from the legitimate MLM business practices.

Remember that in a recognized MLM business, you, as a distributor will get all the resources and help in order to sell products.

While Pyramid Schemes, on the other hand, will entice you to wrongfully fish-in individuals and charge them start up fee for entering.

In case you want to start your own MLM business venture, you should incorporate a MLM business software for seamless business management. Once such prominent names of MLM software is FinoForce.

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