Do you know what a downline is? In network marketing, a downline is your group of followers who you have recruited into a program at different levels both directly and indirectly. These types of programs will say, “if you recruit only 2 people you will be making thousands… because those 2 people will recruit 2 people each and those 4 people will recruit 2 people each (and so on)… and each one of these people will send you a percentage every month.”

Doesn’t that sound like a pyramid scheme?

Well, WAKE UP! Look around you. EVERY business that you could think of is based on a pyramid. Microsoft, Tupperware, Honda, affiliate programs, MLM programs, and everything else is built on the concept of a pyramid. Read that carefully. I said it was a pyramid, not a pyramid scheme.

That is natural, that is life, that is business. You first start with the top, the head honcho, and then trickle down to his executive(s) or manager(s) and then his sales reps and so on.

“What usually makes a business legal and what makes it illegal?”

The product.

Most pyramid schemes base their products on memberships to their web site but some also claim they sell “reports.” I don’t know how the same report could be sold to the same customer every month – it doesn’t make sense. Would you buy the same report every month? Of course not. It’s like buying the same magazine every month, what are you going to do with the other 11 magazines this year?

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Quick Notes:
1) Only the people at the top of the company makes the most money.
2) All businesses are based on a pyramid, but it doesn’t mean they are all pyramid schemes.

Do you know what a downline is? In network marketing, a downline is your group of followers who you have recruited into a program at different levels both directly and indirectly.

These types of programs will say, “if you recruit only 2 people you will be making thousands… because those 2 people will recruit 2 people each and those 4 people will recruit 2 people each (and so on)… and each one of these people will send you a percentage every month.”

Doesn’t that sound like a pyramid scheme?

Well, WAKE UP! Look around you. EVERY business that you could think of is based on a pyramid. Microsoft, Tupperware, Honda, affiliate programs, MLM programs, and everything else is built on the concept of a pyramid. Read that carefully. I said it was a pyramid, not a pyramid scheme.

That is natural, that is life, that is business. You first start with the top, the head honcho, and then trickle down to his executive(s) or manager(s) and then his sales reps and so on.

“What usually makes a business legal and what makes it illegal?”

The product.

Most pyramid schemes base their products on memberships to their web site but some also claim they sell “reports.” I don’t know how the same report could be sold to the same customer every month – it doesn’t make sense.
Would you buy the same report every month? Of course not. It’s like buying the same magazine every month, what are you going to do with the other 11 magazines this year?

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Your Takeaway:
1) Only the people at the top of the company makes the most money.
2) All businesses are based on a pyramid, but it doesn’t mean they are all pyramid schemes.