Is a company that offers products but also requires you to recruit new customers considered a pyramid scheme?

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  • Is a company that offers products but also requires you to recruit new customers considered a pyramid scheme?


Answer #1 | 19/12 2013 21:45
USA Today had a great article about 5 years ago on the difference between a pyramid scheme and a multi-level marketing company. According to the Securities exchange commission - more or less a multi-level marketing company sales more than 50% of their products to non-members (people who aren't part of the pyramid). Pyramid schemes sale less than 50% to non-members. Big companies like Avon, Pampered Chef, Tupperware, Mary Kay, etc don't float close to this edge. But lots of smaller companies are right on the verge between pyramid and mlm.
Positive: 30 %
Answer #2 | 19/12 2013 22:24
Call it what you want. You have to buy some horrendously overpriced product (health drinks, for instance) and then recruit others to sell it. Except they don't sell it; they recruit others. And so on. And in the end, who's going to buy a $45 bottle of fruit juice? If you can actually find people selling the product and making reasonable money from it (the first answer here mentions Tupperware and Mary Kay, for instance), OK. The stuff may still be overpriced, but there's a real product and people sell it. But when the only emphasis is on recruiting others for the downstream, stay far away from it. All the juicy upstream positions are already filled.
Positive: 24 %
Answer #3 | 19/12 2013 22:48
simple answer. yes it is!!
Positive: 4 %
Answer #4 | 19/12 2013 23:03
if you must recruit people to be able to make a profit, it is a pyramid scheme.
Positive: 10 %

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