Illegal Pyramid Scheme or Legal MLM – Part II

by louabbott on July 3, 2011

This video is Part II on my discussion of the critical importance of product pricing in multilevel marketing.

Watch the Part I Video here.

The question comes up all of the time for network marketers, “Is this one of those MLM pyramid deals?”

The fact is, most people do not really understand the difference between a pyramid scheme and a legal Multilevel or network marketing business opportunity.  Even most journalists writing on the subject do not understand the differences. The reason is that it is not as simple as one might first expect. I used to think that if there were products changing hands, it was legal.  If there was only money changing hands, it was illegal.  While the latter is certainly illegal, a product alone will not necessarily legitimatize an illegal scheme. On this page is a video I did a while back that not only explains the difference in a way anyone can understand, but it also explains a concept that can help you quantify the “grey areas.” I guarantee that you have never seen it explained like this… Watch the video presentation carefully. It will help you more fully understand and explain what is legal and what is not, AND what is profitable and what is not.

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{ 7 comments… read them below or add one }

Daniels Dzenis July 30, 2016 at 5:58 pm Thumb up 0 Thumb down 0

I am currently researching one company, which obviously is MLM, maybe pyramid, well….that’s why i write this comment.

Company is which claims being created the new internet security system. You buy in with deposit and rent out your own hard disk space to company, which is further rented to big big companies which require high data security.

The system is structured that all the information, big companies store, is separated in small pieces and put in different computers worldwide. And thats the key to security and uniqueness of the company.

what worries me is that the product is online and ordinary people cant check whether data are really transferred, whether products are working….

Does it sounds like pyramid?

Please ask more clarifying questions if needed.

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Jose April 20, 2016 at 2:50 pm Thumb up 0 Thumb down 0

Hi Lou,

I was wondering what your opinion are about a company called Saivian? I would greatly appreciate any information you could give me about it thank you! God bless

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Flavio April 13, 2016 at 1:51 am Thumb up 0 Thumb down 0

Thank you so much Lou for spreading accurate knowledge about MLMs, now i’m using this information for my new members.

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Chris February 3, 2016 at 1:37 am Thumb up 1 Thumb down 0

What happens if a MLM recruits the entire population and there is nobody left to sell product to? The last person or last few persons will not be able to build a strong business. Maybe I’m missing something but hopefully you can clarify this for me. Thanks!

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louabbott February 3, 2016 at 9:22 am Thumb up 2 Thumb down 0

Good theoretical question, Chris. But the simple answer is that it has never happened, and never will. Some companies, most notably Amway, have been in business for 60+ years and still find customers and new distributors.

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Justin January 15, 2016 at 12:35 am Thumb up 0 Thumb down 1

I’m wondering if arbonne company is legit or not ? What you you think ?

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doni September 18, 2015 at 5:38 pm Thumb up 1 Thumb down 3

there is this company called ”Mega Group” that is spreading insanely fast in asia usa and eastern europe , the product seems to be (internet websites) at a price of $760 . They try to convince people that the actual product would cost up to $1600
but i know that what they offer can be achieved in a lower price since the web design support isn’t really anything special , plus they say that in the price of 760 is included ”training” and ”support” , mostly connected to what they call their ”business plan” and constantly repeat the term FAMILY to their new costumers . What do you think of this . I’m kind of concerned because my country is pretty ignorant in this matter ( too arrogant to think of me being better than everybody else but im really speaking in general here ) , we got f**ked 20 years ago by a couple of pyramid schemes right after the communist regime fell and now it seems like it will start all over again !!!

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