What is the difference between a piramid scheme and Tupperware’s business?
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A pyramid scheme is any set-up where you “buy in” – pay some cost to get in to the pyramid scheme; then after you’ve gotten some number of other people to pay the cost to get in, you get a payout larger than you put in. The exact details vary from setup to setup, but the general pattern exists.
Tupperware is a “Multi-level marketing” (MLM) setup. The idea of an MLM is that I have a product, and if you sell the product for me, I’ll give you a cut. Or, you can find people to sell the product for you, and give them a cut of the cut I give you. MLMs are potentially different than pyramid schemes because the money is coming from selling a product, not from getting people to buy in to the idea of selling the product.
However, many MLMs start taking in money from “sales kits” or “network training” – getting people who are in theory selling the product to buy a separate set of products. And that’s the point when they become practically identical to pyramid schemes: when the money isn’t coming from selling the product, with the “buy in” coming in the form of paying for a sales kit, paying for various trainings, etc.
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