The Difference Between MLM, Network Marketing, Ponzi Schemes, and Pyramid Schemes
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Wondering if your MLM business is conducting unethical practices? Check to see the differences is between MLM, Network Marketing, Ponzi Schemes, and Pyramid Schemes.
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The Difference Between MLM, Network Marketing, Ponzi Schemes, and Pyramid Schemes
- 1. The DifferenceBETWEEN MLM, NETWORK MARKETING, PONZI SCHEMES, AND PYRAMID SCHEMES Presented by Robert Proctor of Multisoft AboutRobertProctorMultisoft.net
- 2. THE PROBLEM MLM (Multilevel Marketing) & Network Marketing are legitimate forms of business, while Ponzi and Pyramid Schemes are illegal. Ponzi SchemePyramid SchemeMLM Network Marketing
- 3. MLM MLM, or Multilevel Marketing, is a form of business that works by gaining and nurturing distributors, while also selling products. These distributors (1) help to sign on more distributors under them and (2) encourage their newly gained distributors to sell products to people.
- 4. NETWORK MARKETING Network Marketing is similar to MLM but varies slightly. Many people use the terms interchangeably. Network Marketing functions by having salespeople who sell products and gain more salespeople by networking at different organizational meetings. These salespeople will find organizations, either related to their field or not, and visit them to find more people to sell to and gain more salespeople from them. They then reach out to the prospects' networks of influence to gain more prospects.
- 5. PONZI SCHEME The term, "Ponzi Scheme," came from a man, Charles Ponzi, who used arbitrage to earn money on coupons for postal stamps in 1919. Although that is not illegal, he obtained investors and paid them off with new investors money. He even used gambling to earn new income to pay off investors. He was caught only one year later after his business was found out by the Securities Exchange Company.
- 6. PYRAMID SCHEME Pyramid Schemes are difficult to catch, as they are similar to MLM, a completely valid form of business. The difference is that Pyramid Schemes sell barely any products and rely on the steady influx of new distributors to pay off people who are higher up in the hierarchy. The new recruits accumulate hardly any real income from this and are used at the expense of people higher up on the pyramid.