Why are MLMs still as big as they are even though pyramid schemes are illegal in many countries?

2.63K views

Why are MLMs still as big as they are even though pyramid schemes are illegal in many countries?

In: Other

7 Answers

Anonymous 0 Comments

Mostly because pyramid schemes was (and is) so successful: some people want to take risks to get an easy money and even though they might know all about pyramid schemes (or especially because of this) and how unstable they are, they hope that they’ll be able to take their money before everything collapse, to be smarter and luckier than others. Basically, that’s true for all market bubbles too. Pyramids and MLM are just simplify it to it’s basis.

Anonymous 0 Comments

They aren’t technically a pyramid scheme although they basically are. They are indeed selling a product. THey aren’t selling it to the people they claim to be selling it, but they can at least pretend they are marketing to customers instead of marketing to their salespeople, which is what they really do.

In a pyramid scheme, nothing is being sold. It’s a total scam.

IN a MLM scheme, something is being sold all right. They are selling the dreams of making easy money, but they are not actually guaranteeing it, just leaving the impression that people can make money that way. IN reality, they just want to sell their products to their would be sales people. They don’t care what happens to them after that.

Anonymous 0 Comments

The difference between a “pyramid scheme” and an “MLM” is that in a pyramid scheme, *there is no product* – the only thing you’re “selling” is entry into the pyramid scheme, which does absolutely nothing at all other than move more money to the top.

In an MLM, the money still moves to the top, but when you pay into it *you get something*. This makes it legal because it’s just like buying a product anywhere else (except for a lot more than it’s worth and with a much lower chance of being able to resell it, but as far as the law cares, that’s *your* problem).

Anonymous 0 Comments

Because greed and stupidity are highly prevalent during times of austerity. It’s incredibly difficult to con people who are intelligent and selfless unless you set up a charity scam and the system has started looking at a lot of charities more closely in the recent past.

Anonymous 0 Comments

Low entry requirements, “just talk to your friends/social networks”, no professional qualifications needed, can be done part time/from home, sounds like easy money. A lot of things can appear appealing to join an MLM scheme. Any MLM ultimately succeeds based on new participants.

Anonymous 0 Comments

There is an organization (that I shall not name) in the United States that effectively practices a pyramid scam. They are notorious for abusing the legal system.

Anonymous 0 Comments

Because they have good lobbyists and won an important court case (in the US at least) that set a precedent that they were not a pyramid scheme. There was a podcast series about it I listened to not that long ago called The Dream. Really good listen. Goes through pretty extensive history of MLMs.