Guys, you may wonder what is Multi-level marketing and pyramid scheme. I think have you landed in the correct place.
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What is “Multi-Level Marketing”?
Multi-level marketing is a strategy, some direct sales companies use to encourage their existing distributors to recruit new distributors by paying the existing distributors a percentage of their recruits' sales. The recruits are the distributor's "downline or else the pipe line." All distributors also make money through direct sales of products to customers.
What is “Pyramid scheme”?
Pyramid Scheme is the same thing which follows Multi-Level Marketing strategy. But the only difference is they do not sell any product. The strategy which they follows rely on recruiting people and the profit which flows in. Pyramid scheme influence people who are in their network to bring new people into the network by investing a certain amount. The people who involves with the network expect a commission from every person which brought in under their network.
Here's a complete comparison between MLM and the pyramid scheme,