Are Mlm Opportunities Just Ponzi Or Pyramid Schemes In Disguise?
The slurs 'Ponzi' and 'Pyramid Schemes' do seem to rear their heads whenever people are assessing MLM opportunities. Many folk, quite reasonably looking to diversify their income in these turbulent times are often confounded by well-meaning relatives who will keep bundling these terms together as if they all mean the same thing.
It's perhaps understandable to see why MLM opportunities are sometimes branded 'Ponzi' or 'Pyramid Schemes'. On the face of it, the structure of an MLM business resembles a Pyramid the moment you start drawing it out on paper. Funnily enough when you draw out the structure of a large company, or even your own family tree, nobody shouts 'Ponzi' or 'Pyramid Schemes' then!
Wikipedia defines a Ponzi scheme as 'a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned.' It's clear to see why some MLM opportunities get tarred with the same brush. In some cases it's deserved. If the only money generated is coming from sign-ups, and there is no product income generated from outside the 'network', then be wary. You may be looking at one of the less ethical MLM opportunities.
It's critical that MLM opportunities generate retail income from outside the organisation. That way, the anticipated rewards - that always sound attractive at a high-energy presentation - do have some foundation. Charles Ponzi, an Italian American active in the US at the start of the last century was actually not the originator. That came from Charles Dickens in 'Little Dorrit'!
Likewise, Wikipedia defines Pyramid Schemes thus: 'A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered'. As you can see for yourself, the two definitions are a bit similar. But neither Ponzi or Pyramid schemes have any meaningful similarity to a professionally run Multi Level Marketing operation. In other words, the MLM opportunities you've been looking into are almost certainly not the same thing.
If you make that point to your well-meaning critics though, they are very likely to say something like 'yes, but it is similar, isn't it?' Let's examine that for a moment. Isn't hiring a car similar to stealing one? They both involve driving someone else's car don't they? Tell me, if instead of next door's cat walking through your back yard you saw a tiger, what would be most important, the similarities or the differences?
Whichever of the hundreds of MLM opportunities you look at seriously, you cannot escape the 'naysayers', some of whom may be very close to home. But read up on what a Ponzi or Pyramid Scheme is, and ask yourself where the money will come from in the MLM you're looking at. As long as you're satisfied with that answer, then follow through on your ambition. The person telling you to stay clear is not going to put your kids through school. If they're so smart how come they're living in a neighbourhood you want to move out of?
In selecting one of the many MLM opportunities, once you're satisfied that it's neither a Ponzi nor a Pyramid scheme, you'll be overwhelmed with choice, which is as confusing as it sounds. What chance has anyone got to make an 'MLM Online Breakthrough' with (at the last count) 432 MLM businesses to choose from? What may be the best option is to look for an automated MLM system which you can plug into, where all the marketing content is 'good to go'. Then it's all about feeding 'traffic' into that marketing funnel. That can remove 99% of the headaches associated with starting an MLM, and can be the Home Business Launchpad that you're looking for.
It's perhaps understandable to see why MLM opportunities are sometimes branded 'Ponzi' or 'Pyramid Schemes'. On the face of it, the structure of an MLM business resembles a Pyramid the moment you start drawing it out on paper. Funnily enough when you draw out the structure of a large company, or even your own family tree, nobody shouts 'Ponzi' or 'Pyramid Schemes' then!
Wikipedia defines a Ponzi scheme as 'a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned.' It's clear to see why some MLM opportunities get tarred with the same brush. In some cases it's deserved. If the only money generated is coming from sign-ups, and there is no product income generated from outside the 'network', then be wary. You may be looking at one of the less ethical MLM opportunities.
It's critical that MLM opportunities generate retail income from outside the organisation. That way, the anticipated rewards - that always sound attractive at a high-energy presentation - do have some foundation. Charles Ponzi, an Italian American active in the US at the start of the last century was actually not the originator. That came from Charles Dickens in 'Little Dorrit'!
Likewise, Wikipedia defines Pyramid Schemes thus: 'A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered'. As you can see for yourself, the two definitions are a bit similar. But neither Ponzi or Pyramid schemes have any meaningful similarity to a professionally run Multi Level Marketing operation. In other words, the MLM opportunities you've been looking into are almost certainly not the same thing.
If you make that point to your well-meaning critics though, they are very likely to say something like 'yes, but it is similar, isn't it?' Let's examine that for a moment. Isn't hiring a car similar to stealing one? They both involve driving someone else's car don't they? Tell me, if instead of next door's cat walking through your back yard you saw a tiger, what would be most important, the similarities or the differences?
Whichever of the hundreds of MLM opportunities you look at seriously, you cannot escape the 'naysayers', some of whom may be very close to home. But read up on what a Ponzi or Pyramid Scheme is, and ask yourself where the money will come from in the MLM you're looking at. As long as you're satisfied with that answer, then follow through on your ambition. The person telling you to stay clear is not going to put your kids through school. If they're so smart how come they're living in a neighbourhood you want to move out of?
In selecting one of the many MLM opportunities, once you're satisfied that it's neither a Ponzi nor a Pyramid scheme, you'll be overwhelmed with choice, which is as confusing as it sounds. What chance has anyone got to make an 'MLM Online Breakthrough' with (at the last count) 432 MLM businesses to choose from? What may be the best option is to look for an automated MLM system which you can plug into, where all the marketing content is 'good to go'. Then it's all about feeding 'traffic' into that marketing funnel. That can remove 99% of the headaches associated with starting an MLM, and can be the Home Business Launchpad that you're looking for.
Source...