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

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

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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.

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.

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.

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.

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).