What is the difference between a piramid scheme and Tupperware’s business?
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The line is kinda fluid. The more income they make from recruiting people into the system over actually selling product the more it becomes a pyramid scheme over a legitimate business.
A true pyramid scheme can only generate revenue as long new people pay into the system because the actual product they sell isn’t a viable business at all
Tupperware:
* You can still make money without finding new members.
* The products are expensive but the bomb! Life long warranty is usually no problem.
* You can still make money without finding new members.
* The investment is quite small and will be earned back fast.
* You can still make money without finding new members.
The line is kinda fluid. The more income they make from recruiting people into the system over actually selling product the more it becomes a pyramid scheme over a legitimate business.
A true pyramid scheme can only generate revenue as long new people pay into the system because the actual product they sell isn’t a viable business at all
You are right that there are a lot of similarities. And you can claim that Tupperware is the only working Multi Layer Marketing company that is not a pyramid scheme. The main difference is that Tupperware is actually able to sell their products and gets most of their income this way rather then making most of their income recruiting new members. So the focus is quite different. A Tupperware seller is likely more interested in selling you a full kitchen set then to recruit you as they get higher bonuses on selling you their wares then to recruit you, they might even lose market share from your competition and may therefore actively try to prevent you from becoming a member. A pyramid scheme however is quite different and make almost all of their money from recruiting new members.
The line is kinda fluid. The more income they make from recruiting people into the system over actually selling product the more it becomes a pyramid scheme over a legitimate business.
A true pyramid scheme can only generate revenue as long new people pay into the system because the actual product they sell isn’t a viable business at all
The difference between a pyramid scheme and multi-level marketing is the reason one is a crime and one is not.
In a pyramid scheme, you collect investments with a promise of unrealistic returns. In order to pay those returns, you must collect more investments. If you don’t collect enough money, you can’t pay out the claims against your investment. The people at the top of the pyramid owe more than they can pay out. This is true right from the beginning. When that gets called out, either because too many people want their money or too few people buy into the scheme, the scheme collapses instantly.
In MLM, you aren’t ever in a position where you owe more in claims than you earned in revenue. Your business model is still dependent on bringing in new recruits, but they don’t have any claims against you of promised returns. If they don’t bring in more recruits, they just don’t make any money. The people at the top of the MLM don’t owe more than they can pay out. It’s never in a position to collapse like a pyramid scheme inherently is.
You are right that there are a lot of similarities. And you can claim that Tupperware is the only working Multi Layer Marketing company that is not a pyramid scheme. The main difference is that Tupperware is actually able to sell their products and gets most of their income this way rather then making most of their income recruiting new members. So the focus is quite different. A Tupperware seller is likely more interested in selling you a full kitchen set then to recruit you as they get higher bonuses on selling you their wares then to recruit you, they might even lose market share from your competition and may therefore actively try to prevent you from becoming a member. A pyramid scheme however is quite different and make almost all of their money from recruiting new members.
Tupperware:
* You can still make money without finding new members.
* The products are expensive but the bomb! Life long warranty is usually no problem.
* You can still make money without finding new members.
* The investment is quite small and will be earned back fast.
* You can still make money without finding new members.
You are right that there are a lot of similarities. And you can claim that Tupperware is the only working Multi Layer Marketing company that is not a pyramid scheme. The main difference is that Tupperware is actually able to sell their products and gets most of their income this way rather then making most of their income recruiting new members. So the focus is quite different. A Tupperware seller is likely more interested in selling you a full kitchen set then to recruit you as they get higher bonuses on selling you their wares then to recruit you, they might even lose market share from your competition and may therefore actively try to prevent you from becoming a member. A pyramid scheme however is quite different and make almost all of their money from recruiting new members.
Tupperware:
* You can still make money without finding new members.
* The products are expensive but the bomb! Life long warranty is usually no problem.
* You can still make money without finding new members.
* The investment is quite small and will be earned back fast.
* You can still make money without finding new members.
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