Post on 20-Mar-2017
transcript
The DifferenceBETWEEN MLM,NETWORK MARKETING,PONZI SCHEMES, ANDPYRAMID SCHEMESPresented by Robert Proctor of Multisoft
AboutRobertProctorMul t i sof t .net
THE PROBLEMMLM (Multilevel Marketing) & Network Marketing are legitimate
forms of business, while Ponzi and Pyramid Schemes areillegal.
Ponzi SchemePyramid SchemeMLM Network Marketing
MLMMLM, or Multilevel Marketing,is a form of business thatworks by gaining andnurturing distributors, whilealso selling products. Thesedistributors (1) help to sign onmore distributors under themand (2) encourage their newlygained distributors to sellproducts to people.
NETWORKMARKETINGNetwork Marketing is similar to MLMbut varies slightly. Many people usethe terms interchangeably. NetworkMarketing functions by havingsalespeople who sell products andgain more salespeople by networkingat different organizational meetings. These salespeople will findorganizations, either related to theirfield or not, and visit them to find morepeople to sell to and gain moresalespeople from them. They thenreach out to the prospects' networks ofinfluence to gain more prospects.
PONZISCHEMEThe term, "Ponzi Scheme," came from aman, Charles Ponzi, who used arbitrageto earn money on coupons for postalstamps in 1919. Although that is notillegal, he obtained investors and paidthem off with new investors money. Heeven used gambling to earn newincome to pay off investors. He wascaught only one year later after hisbusiness was found out by theSecurities Exchange Company.
PYRAMIDSCHEMEPyramid Schemes are difficult to catch,as they are similar to MLM, acompletely valid form of business. Thedifference is that Pyramid Schemessell barely any products and rely onthe steady influx of new distributors topay off people who are higher up in thehierarchy. The new recruitsaccumulate hardly any real incomefrom this and are used at the expenseof people higher up on the pyramid.