What is the difference between a piramid scheme and Tupperware’s business?
In: 6
## Tupperware is what is called a Multi-Level Marketing Scheme.
## Not all MLMs are Ponzi – here are some tests
**1. Focus on Products or Services** – The primary focus of the MLM company should be on selling products or services to customers outside the company. If the emphasis is primarily on recruiting new members and making money through their fees, it may be a red flag.
**2. No Buying-In** – Members should not be required to pay large fees or purchase large amounts of inventory in order to join the MLM company. The focus should be on selling products or services, not on buying in or recruiting others to do so.
**3. Legitimate Products or Services** – The products or services offered by the MLM company should be legitimate and in demand, with a fair price and good quality. If the products or services are overpriced or of low quality, it may be a red flag.
**4. Clear Compensation Plan** – The MLM company should have a clear and transparent compensation plan that outlines how distributors can earn money and the requirements for doing so. It should be fair and achievable, with no hidden or undisclosed terms or conditions.
**5. No Guaranteed Income** – There should be no guarantee of income or earnings in the MLM company. Members should be aware that their income will depend on their own efforts and the sales they generate, not on promises made by the company.
**6. Open Books** – The MLM company should be open and transparent about its financials, including revenue, expenses, and profits. Members should have access to this information and be able to verify its accuracy.
**7. Reasonable Income Claims** – The MLM company should not make unrealistic income claims or promises of quick and easy money. Members should be aware that building a successful business takes time, effort, and dedication.
Tupperware checks off most of these criteria so is not a ponzi scheme.
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