Is this a pyramid scheme?

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Half the people that ask that question have never experienced a true pyramid scheme. I remember them from the 70’s. People would take $500 who would then take $500 and so on.  This would go down so many levels and the people at the top got their cash and ran.   No one ever received anything for their money. Eventually, people stopped giving the money and the whole thing collapsed.

Yet we insist on transferring that title to legitimate business. All major corporations have a pyramid structure. The all provide something of value that we are willing to pay for.

Visalus is NOT a pyramid scheme.   Sears is NOT a pyramid scheme.  Mary K is NOT a pyramid scheme. Starbucks is NOT a pyramid scheme.  LegalShield is NOT a pyramid scheme. Avon is NOT a pyramid scheme.

They all have great product and are structured in a manner that pays for promoting valuable products.

 

Consider an example of a corporation:

CEO/President

Vice President – Vice President

Regional Manager – Regional Manager – Regional Manager

Branch Manager – Branch Manager – Branch Manager – Branch Manager

Manager – Manager – Manager – Manager – Manager – Manager – Manager

Worker – Worker – Worker – Worker – Worker – Worker – Worker – Worker – Worker

 

 

If you took the text above and centered it on a page, it will look like a pyramid.

Does that make it a pyramid scheme?

MLM takes that and turns it upside down. The front line gets the larger percentage of the sales and the pieces get smaller as they filter back up. The person who started the process ends up making more money because they get a small piece of what others do.  It’s called leverage.  Kind of like buying stocks in a company.  You invest in stocks and make a little bit from the efforts of others.

In an MLM, you invest yourself into others.  You lead and teach.  They sell the product or service just like you but as you help them grow, so does your income.  If they make more, you make more.  If they stop selling the product or service, you don’t get paid.  Sounds like pay for performance to me.

Next time someone calls your business a pyramid scheme, don’t do what I just did.  Resist the urge to get into a discussion and move on.

 

Make it a great day!

Barry

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