Network marketing is a wide industry in which independent distributor sells company products by their efforts and ability in retail and earning a percentage of the sales from the sales force. All multilevel marketing plans are not a scam there most of are legal. When your sales the company products to the public for making Money it is a legal MLM. And when you recruiting a number of people and your sales to them is probably a pyramid Scheme which is illegal and fraud scheme due to the vast majority of participants lose their money. But the Ponzi scheme is always a fraud or a scam. You should have to understand the difference between these three terms in elaboration to understand this industry is MLM pyramid scheme and Ponzi scheme. After that, you definitely analyze that MLM is not only for scammers and know what is an actual or a scam save your time and money.

Multilevel marketing

Multilevel marketing is a system of a large network of distributor for Selling the products. It is a true and absolute version of marketing scenarios and legitimate in law. In this system, the company encourages the distributors to build their own downline by recruiting, motivating, supplying and training to sell products and earning a percentage of sales from the sales force.

Pyramid scheme

It is a centralized scheme where initial schemers must recruit investor who recruits others and so on and collect the investment from them. The originator pays the money of later investors is used for the people who invested first and when new investors not found then it breaks up. As it comes crashing down, many people can lose lots of money which makes it fraudulent and illegal. The scammers of a pyramid scheme make their marketing scheme look real with many types of products or services. The result is that the pyramid scheme is almost considered wrong.

Ponzi scheme

In this scheme, unsuspecting individuals are fooled by the unscrupulous investor who promises extraordinary returns. Ponzi schemes are self-sustaining as long as cash outflows can be matched by monetary inflows. It is totally a fraudulent investment management services where the fraud originator is in charge of controlling the entire operation, they merely transfer funds from one client to another and forgo any real investment activities. The only guilty party is the originator of the corrupt business practice, not the participants (as long as they are unaware of any illegal practice).

The main difference between a Ponzi and pyramid scheme is that in a Ponzi scheme participants believe actually earning returns from their investment and in the pyramid scheme, participants are aware that they are earning money by finding new participants who become part of the scheme.

In short, you have to be more careful when you investing your money and time. For that, first you have to check the company brand, it’s track record, goodwill, and reputation in the market, the scheme legacy, all pros and cons of this before making a decision to invest your time and money. These points will assuredly keep you away from a scam and secure you. MLM is not for scammers but sometimes it is using by the corrupt persons done fraud for making fast money. So you have to beware all of this.