What’s the difference between multi-level marketing and pyramid scheme?

Question by gilgamesh101: What’s the difference between multi-level marketing and pyramid scheme?
And can you tell me if multi-level marketing works at all? I know that pyramid scheme is illegal, so I want to know if that’s the same as MLM.

Best answer:

Answer by ePhil
An MLM is based on products or services. Your income is based on a consume of yours and your referrals. In a good MLM system you can make more money than your sponsor if you work harder.

In a pyramid scheme you are paid for referring people. Generally there is no product and is “too good to be true” paying percentage. This schemes can be recognized if you see that in the payplan you don’t have to purchase and get paid. Earlier come earn more.

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