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Educational Consumer Tips

Multi Level Marketing VS. Pyramid Scheme

Author: Better Business Bureau
Published:

Multi level marketing is a system of retailing in which products are sold by distributors, usually in customers' homes. You can earn money based on your efforts and your ability to sell the products, which are supplied to you by a multi level marketing company. You will also be encouraged to recruit your own sales force, and you will get a percentage of their profits.

Pyramid schemes, on the other hand, concentrate on quick profits to be earned by recruiting others. Little or no mention is made regarding a market for the product. The emphasis is on getting YOU to invest a substantial start-up cost, then recruit other participants to invest. When the supply of willing investors runs out, the pyramid collapses, and most participants lose their money; and pyramid schemes are illegal throughout the United States.