maxell said:
ALL MLMs are pyramid schemes. By definition, a pyramid scheme is:
"a system of selling goods where commissions are paid to recruit new sellers. The commissions are based on the number of sellers recruited. The right to sell the goods is sold to an increasing number of sellers at lower and lower levels."
Once a pyramid scheme is licensed by the Government, it then becomes officially known as a Multi-Level Marketing company. Those pyramid schemes which are not licensed are illegal.
If you cut out the concept of "commission" from downliners going to upliners, no MLM can survive. Therefore, ALL MLMs ARE PYRAMID SCHEMES. The only difference is whether they are licensed or not.
what you have said is totally misinformed. there are basic and simple test to to see if the 'MLM' company is actually a Pyramid Scheme or a legitamate MLM company.
1) will people buy without joining the as a member? if the answer is no, then there is NO REAL VALUE in the product or the products are highly over prices, this is signs of pyramiding. This answers your definition of Pyramid Scheme.
2) If recruiting stops, do existing distributors still earn money? if the answer is no, means they're ONLY income source is recruiting. then it's a pyramid.
ALL MLMs are on the CONCEPT of pyramid schemes. What makes them legitamate is the compensation plan. pyramid compensation plans only/mainly benefit the top person. Why does the government license some 'pyramids' and ban the others? because the compensation plan is UNFAIR. Some governments are more open about MLM than others. Depending on their political agenda. Which as you know differs from country to country.
A more familiar example of the concept is real estate. If you are a Broker, you can hire agents, and pay them commissions based on sales. If your agent makes a sale he gets some commission, YOU as the broker gets part of the sale as comission too. right? so that's an example. (this is not to bang realtors out there okay??) ;)
but basically alot of the hoo-haa that has been generated by the 17 page thread that was lock was because of BAD experiences with a few MLM distributors. It's like buying a used car.. you buy one cacat car then you kena con.. you stop buying cars?!? of course not la.. you go and do more research right? then you learn more, and make a better decision next time. And if some con man wanna sell you NSX engine and he come and tell you "My wira got NSX engine".. you tell him go fly kite, right ? if someone tell you from MLM you can get ferrari in 6 months.. you apply the same thing lor.
hehe okay la.. flame suit - ON .. again :D hopefully mods don't lock this thread :p :p