Multilevel Marketing Or Pyramid Scam?
February 21st 2008 09:34
With the proliferation of marketing scams, there are now multilevel marketing that are also called pyramid scams. Here's a basic but important points to differentiate the thread that separate the two.
Multilevel marketing is not always a pyramid scam. If a set of crockery is paid for and deliverd, or if at every level of the pyramid, sale is delivered, there is no scam. But, if all the buyers get when he parts with his money at the point of sale is a written promise that a bigger sum will be delivered to him at some specified future date, and the promise will be fulfilled with money collected from other buyers at the time of delivery, then you have a variation of the notorious pyramid scam - of robbing Peter to pay Paul.
Multilevel marketing is not always a pyramid scam. If a set of crockery is paid for and deliverd, or if at every level of the pyramid, sale is delivered, there is no scam. But, if all the buyers get when he parts with his money at the point of sale is a written promise that a bigger sum will be delivered to him at some specified future date, and the promise will be fulfilled with money collected from other buyers at the time of delivery, then you have a variation of the notorious pyramid scam - of robbing Peter to pay Paul.
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