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MLMs are not the same as pyramid schemes? Answered

Good advice, I just have one small correction. Multi-level marketing companies and pyramid schemes are not the same thing, though there are some pyramid schemes posing as MLM companies. The difference is that a legitimate MLM company provides an actual product, while a pyramid scheme is a scam and as such is illegal. Thanks for the class though, I've been wanting to try selling my wooden hair accessories (sticks and forks), and will report back if I succeed :-).


They're definitely not entirely the same, but there is very little legal distinction! Once pyramid schemes were banned, MLMs popped up to fill the void. Many MLMs still operate as pyramid schemes thanks to clever legal wording and similar practices. Participants of the majority of MLM schemes also find themselves in debt or never making a profit. I know I've got strong opinions on it, but I didn't want anyone reading this class thinking an MLM is a good idea OR a way to start a business. I know too many people who have been burned!

Best of luck with your shop!! :D

if you take away the products, does it look a normal business model