Networking business is still considered illegal in various countries. Although the networking business is restricted in different countries, multiple individuals and organizations promote pyramid-style networking through legitimate multi-level marketing (MLM).
Here we will discuss
Pyramid Style Networking and Multi-Level Marketing.
The MLM scheme has
deceived many people in the world today. Today here, we are going to tell you
how this scheme works.
It is also a kind of
network marketing scheme. MLM is also known by various names, including
Multi-Level Marketing or Referral Marketing as well as Network Marketing. The
pyramid scheme is also a type of network marketing scheme. But there is some
difference between these two terms.
MLM is a marketing method
that some companies use. To understand MLM, you first should understand the
flow chart of a Normal company.
An average or general
company consists of a manufacturing company, subordinate to a retail and
wholesale distributor, and finally, a customer purchasing goods and services
manufactured by the company.
But in fraudulent MLM
companies, the seller is above, then the distributor is the consumer, and the
consumer is the distributor. Such fraudulent MLM companies deceive the customer
by saying that they are not the customer but the distributor. But in the end,
the reality is that the same distributors are the customers.
A typical company is
always focused on making its products and services excellent So that the
consumption of its product and service may increase in future. But an MLM
company is always focused on connecting people and expanding the network.
'S/He impulse everyone to
come and join his network, and instead, S/he wants to get a commission.'
In MLM, the company urges
its distributors to add more people to the network and assures them a
commission.
The more people companies
connect with under MLM, the more their network grows. In this way, starting
from one person and then spreading to many, its shape looks like a pyramid.
There are a few
distributors under the company's boss, and more networking professionals are
attached to them. This way, the network grows in Network Marketing.
In such a case, you may
wonder, who will be the end consumer of their product? What goods and services
are they selling? At the same time, it is natural for us to think about the
benefits that an MLM company makes by collecting so many distributors.
MLM company strategy to
make money
MLM companies ask you to
invest some money before you become a distributor. However, not all MLM
companies ask their clients to invest money in advance. Some ask you to buy a
starter pack or some product.
After doing so, you can
earn a commission by becoming a distributor. In this way, MLM makes its
distributor and its customer.
Such MLM companies do not
have to spend a lot of money on their marketing and advertising of the company,
nor do they have to improve the product. They need to add as many people as
possible to their company.
Difference between a
Pyramid scheme and an MLM
There is not much
difference between a pyramid scheme and MLM. The Pyramid Scheme and MLM deal
with their confidence as they choose to commence their play activities. But the
main difference is that there is no product in the pyramid scheme.
It is said that a direct
commission will be given to the service recipients for investment, and
additional people will be added to the scheme. A fixed commission will be given
for the investment coming from them. But most of the investment money comes
from the person at the company's top.
For example, in a pyramid
scheme, a person is asked by a company to invest ten thousand rupees. The
person then has to find three more, and the company promises to pay them a
commission of ten per cent of the investment.
In this way, they also
promise to give two per cent each from the network created by the three. So it
looks like the scheme is beautiful, and easy to earn money without making any
effort. In this way, a person becomes rich overnight which is not valid.
When you connect to this
kind of pyramid, you always think that you are at the top of this pyramid. But
in reality, you will always be down.
About 0.1 per cent of the
people at the front of the pyramid scheme make affluence, but the other 95 to
99 per cent fall prey to it because they can't find other people and connect to
this network who can invest money and give them a commission.
The pyramid scheme is
illegal and banned in most Asian countries, like Nepal and India, but MLM
(Multi-Level Marketing) is legal. Because in MLM, you will sell a product and
service together. But Pyramids scheme is different from MLM.
In reality, the MLM
company seems to be selling some products from the outside, but it is also adopting
a pyramid scheme marketing strategy even inside.
You always spend money on
any product or service when you see it is helpful to you. Similarly, a company
evaluates the value that a person can give to the company before hiring an
employee.
But, when you look at all
the MLM companies, these companies primarily prey on the unemployed, the simple
and the homeless people because such people can raise a small amount of
investment required for the company and also fool themselves just as they can
fool others.
MLM companies organize
their work and imprint the company in the minds of the people in a very clever
way by organizing outstanding motivational events. In fact, it is a game of
brainwashing many youth and unemployed people.
The commission in such
companies is paid only when you spend a certain amount to the company. Thus the
company adopts pay to play strategy.
So, This is the main
difference between the Pyramid Scheme and MLM. We don't find much more
difference between them, but also we try to explain the difference.
This article is totally
based on the research and feedback of the people and not based on a personal
point of view.
Please mention in the
commend what do you think about Network Marketing.
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