The Difference between MLM and Pyramid Schemes - Who is best

The Difference between MLM and Pyramid Schemes – Who is best

Both these schemes sound almost the same, but here Multi-Level Marketing (MLM) is a legitimate scheme and pyramid is an illegal scheme. Our article is based on the topic “The Difference between MLM and Pyramid Schemes“, in which we will understand both these schemes in detail. And we will see how pyramid scheme is scam and how to earn infinite money from MLM.

Keep in mind, if any MLM scheme comes to you, then test it thoroughly, and see that the money is being called in it and from where it is coming. Invest your money only after doing a proper investigation, otherwise don’t. Apart from this, do not take any decision in a hurry, because people with pyramid scheme tend to do things quickly.

What is Multi-level Marketing and is it a good plan

This is an attractive and great scheme which can be started with very small investment. In this plan, a team is formed, which gradually increases automatically. Thousands or millions of people get lucrative business offers through MLM, with the help of which they can also earn very well.

Direct selling is also included in this plan, and it is also a part of MLM in which the company’s product reaches the customer directly. There is no role of dealer, stocker, advertisement etc. in this process.

How does it work

In this scheme, there is an MLM consultant or contractor or distributor, who sells different products to many people, and earns money from it. In this scheme, if a person is not associated with any other MLM company, then you can connect him with you and sell your products to them. This gives you retail profit and also becomes your team member.

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Now your team member will also add other people in the same way, but you will continue to earn some percentage from this team member. In this way, a continuous team will be formed under you, which is called downline. And this is the MLM scheme.

Apart from this, in this scheme, you get bonuses by selling a specific amount of products or signing up a certain number of new members. These offers vary with different companies.

This scheme is completely valid and is a government recognized scheme. In this scheme, there is complete transparency about where your money goes and where it comes from. I hope you have understood this multi-level marketing plan.

Note: There is also a difference between MLM (multi-level marketing) and direct selling marketing.

What is a pyramid scheme and why is it not good

Pyramid plan is also a type of multi-level marketing plan, but not every MLM plan is a valid business opportunity. This is such a scheme, which sounds very attractive and profitable to hear but your entire money invested in it gets sunk. This is a fraud scheme, in which lakhs of people are trapped and there is a plan to run away with their money.

In this scheme also the product or service is distributed and team is formed like mlm, but its planning is much more confusing. In this plan, you do not know at all where your money is going and where it is coming from. In this scheme only you see profit, but the story behind this benefit is not visible at all.

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This scheme is not very old and is not of a clear type. In this, your money goes in different ways. In this plan you have to form a team and meet certain level condition and get money, but next time you need to invest money again.

If you want to avoid such pyramid schemes, you need to check whether the scheme is legally recognized or not, as pyramid schemes are never recognized. In India and other countries, the person running the pyramid scheme is punished, so the pyramid scheme scheme cannot be recognized by the government under any circumstances.

Apart from this, you also have to be safe from missing documents. You have to be a conscious citizen of this, although at present the legal is completely conscious and such a scheme has been completely closed. All the present MLM companies are recorded in the documents of the government.

Now a very big question comes in front of us that how to identify legitimate MLM company and illegal pyramid scheme company, and how to avoid them?

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How to Avoid a Pyramid Scheme

Most of the people of the world want to earn money in a quick and shortcut way, but in this greed they invest money in illegal pyramid scheme and in the end they also drown all the money, so such illegal schemes should be avoided. Like I told you that both are same, so how can we avoid pyramid scheme? To identify such illegal scheme you should compare the plan with the following points.

  • Pay attention to the promises of high returns to the short run and see where the money is coming from.
  • Check the quality of the product of the scheme and if any service is being delivered, then definitely check its past.
  • Make sure that the person in front is putting more pressure on you or not. If there is a rush, then you have to be alert first and then check the company thoroughly.
  • In the planning of the scheme, make sure where your money will go and how it will be invested. Apart from this, also check from where the company will bring the money and give it to us.
  • Be sure to check about how the investment is being done, that is, check the documents.
  • Determine whether your investing method is too good to be true.
  • Thoroughly analyze the plan displayed, if you do not understand, then do not take any decision.
  • If you are being told that such an opportunity will not come again, then avoid investing in such a situation.
  • Start with a small investment.
  • It must be checked whether the registered documents of the company are correct or not.
  • Be sure to check the past behind the scheme and also check the criminal record.
  • Don’t get confused with other people’s investments.
  • Pay special attention to all the claims related to your investment and try to find out their truth.
  • Stay safe from any confusing scheme; don’t take any decision if the plan is more mesh.
  • Thoroughly consider any unreliable claims.
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I sincerely hope that this article has given you complete information, if you need any other information, then you can write a comment. In the end, we want to say that you must stay away from such illegal schemes.

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