1. April 2014 | 61 412 595 195
The difference between
A
Pyramid and Multi-Level
Marketing
Other identifying characteristics:
 Vague descriptions about the company from which your
questions can only be answered by signing up and paying the
fee;
 No product or service being offered or a product that sells at
a highly inflated price;
 A majority or all of the possible income to be made comes
from the sign-up fee from new enrollees; and
 Repeated assurances that the company is completely legal.
Volume 1 Session 2
As a mentor of MLM marketers I am often asked by new
coachees how should they deal with the ‘It’s a pyramid’
statement from potential business owners.
I have to admit on the surface, it's hard to tell the difference
between a legitimate MLM and a pyramid scheme. That's
because they're both built on the business model of "multiple
levels" of distributors and recruits. Many people automatically
associate a negative connotation with words like “multi-level
marketing” and “down line.” It’s assumed that those words
denote a “pyramid scheme” and that the opportunity attached
to those words is a scam. However, nothing could be further
from the truth. If you know what to look for you will be able to
detect a true “pyramid scheme” from a legitimate Multi Level
opportunity.
How tell if it is a Pyramid
A pyramid scheme – According to the United State Securities
and Exchange Commission, the hallmark of pyramid schemes is
the promise of higher than normal returns within a short period
of time for doing nothing other than handing over your money
and getting others to do the same.
Organisations behind a pyramid scheme can go to great
lengths to make the program look like a legitimate multi-level
marketing program. But unfortunately that is where the
similarity ends. They simply use money coming in from new
recruits to pay off early stage investors.”
Contents
Special Interest Articles
Pyramids versus Multi Level
Marketing
About the writer - Ian is a committed
sales people development specialist
with over 40 years of practical hands
on experience in coaching and
developing sales people and Network
marketers. He has tertiary
qualifications in TQM, Occupational
Work Health and Safety and
Psychology, specialising in
performance coaching.

2. Unlike a pyramid scheme, any member on any level can make money without ever
having to sign-up a new member.
Multi-Level Marketing - Multi-level
marketing companies follow a similar concept
to a pyramid scheme, which is a reason for
most of the confusion, except for some
significant differences.
 Members 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.
 Members of any level in a multi-level can
earn more than the people who signed
them up.
 Multi-level marketing companies are legal
although structured almost exactly like a
pyramid scheme
 a
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Below are the celebrities, spokesmen and women, famous supporters and endorsers of the
Direct Selling – Network Marketing – MLM Industry. They are very successful individuals who
do not understand why some people have ‘pyramid objections’.
Investors such as; Warren Buffett (Pampered Chef),
Billionaires like Carl Icahn, George Soros and William Stiritz who invested hundreds of
millions (Herbalife), and Vincent Tan (Epic, Ecosway).
Former President of the United States Bill Clinton who has thanked the Direct Selling
industry in a speech, Dr. Memhet Oz (USANA, Vemma), Donald Trump (ACN)
and Madeleine Albright (Amway), who have been keynote speakers at conventions and
many more.
Just about any product or service can be purchased through direct selling somewhere in the
world.
Many people think of cosmetics, wellness products and home décor as products that are
often sold through direct sales, but add to that countless other product categories including
kitchen products, jewelry, clothing, organic gardening supplies, spa products, scrapbooking
supplies, rubber stamps and much, much more.
President Clinton making remarks for the Direct Selling Association delivered on
September 23, 1996 from the White House.
‘Legitimate direct selling companies seek to make money with you as you build your
business (and theirs) by selling real products and services’.
The Direct Selling Industry: est. $167 Billion in annual worldwide sales and est. 80+
million people are involved.