Most pyramid schemes seem intent on exploiting people with limited means and limited knowledge of business such as individuals who have little experience in direct sales, distributorships, or franchise enterprises or who have limited money or credit with which to establish their own businesses.
They rely on widespread ignorance of basic mathematics. Participants are promised large rewards for putting up a certain amount of money and then recruiting the next level of members. But the schemes always collapse because the supply of potential recruits quickly runs out, making many participants both victims and perpetrators.
Many victims of these scams sell first to their friends. When the supposed money-making opportunity goes belly up, most lose not only their money —but also their friends.
Sadly, few people get the big picture about multi-level marketing schemes ...
For the most part, MLMs are all the same scheme! From old established schemes like Amway to new startups like the Trump Network and Foreign Currency Investments, these are the same flim flam in different clothing.
One MLM may sell vitamins while another sells weight loss herbs. One sells legal services insurance and another fruit juice. But all of them, in reality, sell the exactly the same product: an endless chain income promise. MLMs are all in the “business opportunity” business, not “pills, potions and lotions.” And all of them sell the same “opportunity”, which is the chance to sell the “opportunity” to others who sell the same opportunity, forever and ever. Amen.Here’s one obvious clue of their sameness: Most MLMs prohibit a consumer from joining different MLMs at the same time.
Even though one scheme may sell juice and another vitamins, the schemes will legally prevent a consumer from being involved in both. Some even prohibit consumers, after they quit the scheme and move to another, from soliciting their downlines to join the new scheme for months or years afterward -- even when their “downlines” may be their own family!Why? Because the MLM companies know that while other MLMs are selling different products, they are in fact, bitter competitors for the real product – the income promise – which is exactly like the one they sell. The income promise is what they all sell, and their promises of income are always based on the same compensation plan: the endless recruitment chain.
