ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A Multi-Level Marketing Company sells an actual product where a Pyramid Scheme does not.
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There is no difference between a Pyramid Scheme and a Multi-Level Marketing Company.
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A Pyramid Scheme is legal where a Multi-Level Marketing Company is illegal.
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A Pyramid Scheme sells an actual product where a Multi-Level Marketing Company does not.
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Detailed explanation-1: -Pyramid Schemes are, however, fraudulent schemes, disguised as an MLM strategy. The difference between a pyramid scheme and a lawful MLM program is that there is no real product that is sold in a pyramid scheme. Participants attempt to make money solely by recruiting new participants into the program.
Detailed explanation-2: -The essential difference between the two frauds is that a Ponzi scheme generally only requires investment in something from its victims, with promised returns at a later pay date. Pyramid schemes, unlike Ponzi schemes, usually offer a victim the opportunity to “make” money by recruiting more people into the scam.
Detailed explanation-3: -Distributors for direct selling companies earn commissions based on sales of products and services that they or their sales teams have made. In a pyramid scheme, financial returns are based only on the number of persons that have been successfully recruited into the company.
Detailed explanation-4: -What Is A Pyramid Scheme? A pyramid scheme is a fraudulent system of making money based on recruiting an ever-increasing number of “investors.” The initial promoters recruit investors, who in turn recruit more investors, and so on.
Detailed explanation-5: -As I’ve mentioned, the words “network marketing” and “MLM” are one and the same. “Network marketing” seems to have come about because people think “MLM” has negative connotations, but these terms are really just two different ways of describing the same thing.