The company’s that everyone knows are MLM trash (HerbaLife, JuicePlus, ect). When I was looking for a job I naively joined a seminar discussing CutCo Knives. Come to find out these dud muffin companies have been around since my mom was growing up, and are somehow still operational? Wouldn’t the BBB or whatever business bureau operates in the US (FTC?) have these scams shut down by now? I understand that new ones are popping up all the time but im referring to the ones that have been around forever now.
In: Economics
Actual pyramid schemes are illegal and get shut down when they’re discovered. MLM schemes are basically using a loophole that makes them technically legal but still just as shitty, so they’re *technically* not pyramid schemes despite operating almost exactly as a pyramid scheme. So they’re still around because 1) they’re technically legal and 2) there are enough idiots that fall for them to keep them afloat.
from what i remember i think the only difference is that an MLM isn’t allowed to *require* participants to sign up for product subscriptions themselves, so you can still go around selling subscriptions to whatever the “service” is without having one yourself, whereas pyramid schemes were propped up by requiring the “salespeople” to also be customers. that doesn’t mean an MLM won’t heavily encourage (pressure) people in to subscribing, just that they can’t make it a hard requirement to participate.
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