What is the diffirent between Pyramiding scheme and Multi-level marketing scheme?

A friend of mine has been a victim of pyramiding, first, he was recruited by its member, what that member told him is, just put your money in our company and invite a friend, 1 month after, it become double, so, he convince, he put 10 thousand pesos, after a month it become 20 thousand, they really convince and start to invite their friend including me, unfortunately I have no money. they put 40 thousand again hoping it will become 80 thousand, he invited his newly retire friend from their company who put all his retirement fee, they are confident that it will become double because they tried it already at first, this is a big group, the other member are famous in the country so they really believed it. but sadly this group has gone suddenly with their money but later on it was apprehended by the authority. So sad, this group has just get their trust by making their money double for once, then after it’s gone. Whatever the members do, they didn’t get their money anymore. it was spread all over the country, the pyramiding scam. that’s why people are very aware of the system of networking like pyramiding, once they encounter the networking firm they thought it’s a kind of pyramiding, a negative connotation with buzz words like “multi-level marketing” and “down line.” They assume that those words denote a “pyramid scheme” and a scam. Now the networker has difficulties to recruit people because people thought they are a part of pyramiding.


What is the different between pyramiding scheme and Multi-level marketing/networking?

 
The Pyramiding

A pyramid scheme is a non-sustainable business that involves the exchange of money, usually in the form of a sign-up fee, and has no product to sell and services.  It recognized by how they actually work, most of the money they are earned and gained comes primarily from recruiting new people and these new people must recruit and recruits.

It was considered unfair trade practices because the rewards for those at the top come from those below, and because eventually it will become impossible to recruit the number of people needed to produce reasonable financial rewards to participants. It means, only the first several levels or the people on the top of the company will profit.

Characteristic of Pyramiding

• There’s no product being offered or a product that sells at a highly price:
• All possible income comes from the sign-up fee from new enrolees;
• They always assured that the company is completely legal especially to the new recruit.
• You have to do nothing just invite or recruit and your money will earn interest.
• Proving good performance by showing well-known person that been their member and many other things that will really convince you to become a member.

Pyramiding used all gimmicks to get money to the people.

Furthermore, in pyramiding it require participants to use an agent, to recruit others on their behalf, instead of having to recruit new participants themselves. These schemes is the promise of sky-high returns in a short period of time for doing nothing other than handling over your money and getting others to do the same.


The Multi-level marketing/networking.

MLN it's based on providing people with real, legitimate products they need and want at a fair price, their financial benefit is always the result of their own dedicated efforts in building an organization that sells real products and services.

Network marketing is a direct selling method in which independent-agents serve as distributors of goods and services, and are encouraged to build and manage their own sales force by recruiting and training other independent agents.

MLM is only one type of direct selling. they sell products directly to consumers by means of relationship and referrals, they use direct selling for less advertising fee for their product, a word of mouth marketing and advertisement, if the costumer use their product it will spread to a friends, relative and to other people so why they paid for advertisement anymore.

Network marketing is a serious business for serious people. It's a system where the design, creation and expense the corporate team has gone through becomes a road map for your own success.

In multi level marketing the members/distributors at any level of a multi-level marketing model can make income through the company’s products and/or services without signing up any new members. And also its members of any level can advance past the people who signed up to them. Like for Example,

The Aim Global, its member distributor earn money through the company affordable product, even they didn’t recruit people. But if they want to recruit people this will add to their income, they work hard for their self to earn, not the company to work for them. This is a real work not a scam.

The distributor/member directly sell its product to the consumer, a product that will care for the people, a product that will help to the people‘s need at very affordable price.

Aim global member at any level can advance past from the one who recruit them.
Many networking company arise now, if we know their category we can learn if they are scam or not. We recognized them by how they actually work their characteristic and scheme.