Is a legal and permitted species commercial activities... This direction is developing in many countries of the world and is very popular. Its task is to disseminate information about products, attract consumers, and directly sell goods.

A huge number of sales consultants come to a network company, and the network marketing scheme is pyramidal. However, what people are used to calling the "pyramid scheme" is different from the business called "network marketing". Moreover, these two areas have significant differences. Consider the rules of work and the essence of network marketing companies:

  • For work, before starting work, the founder is registered, chooses the organizational and legal form, receives licenses and all the required documents in accordance with the legislation of the Russian Federation.
  • The company uses the principle of chain selling. This is necessary to reach the market and maximize product promotion.
  • Trading operations in a network company are carried out regardless of the influx of new consultants.
  • The company's turnover includes funds received from the sale of products (goods, services).
  • Each employee of the company receives remuneration for increasing turnover, there is a system of bonuses, rewards, the prospect of growth in career ladder... With the help of a network company, you can build a business and pass it on to your heirs.
  • Network companies do not recruit people by attracting them with "fairy tales" of the millions that can be made. Their work is built on help, real financial support and training partners for successful work in company.
  • The company's employees work according to a clear scheme: the amount of personal earnings depends on the amount of products sold.

Financial pyramids: hidden danger

Despite the similarities between the directions of the pyramid scheme and network marketing, it is not difficult to identify their differences. The principle of the pyramid scheme is to constantly receive Money from its participants. The main difference between network marketing and a pyramid is that a network company is based on a specific product that needs to be promoted, while the pyramid is based on the participants' money.

To understand, consider the principles of the existence of financial pyramids:

  • Such companies operate illegally, they are engaged in attracting customers only via the Internet, and the funds are stored in. V developed countries their activities are prohibited.
  • The pyramid does not spread anything, its purpose is to recruit clients and receive money through their contributions.
  • The members of the company are not involved in the sale of products, their task is to bring to the company as many paying customers as possible.
  • In the pyramid there is no long term and development - money can be earned only at the beginning and not always. The participant receives bonuses for attracting new members.
  • Similar companies do not have. If there are no customers, the pyramid will cease to exist.
  • The task of the pyramid is to recruit a large number of "investors" for whom participation in such a company turns out to be fraudulent and lost funds.
  • In both network companies and pyramids, participants must pay an entry fee. However, in the first case, a small amount of money is required for starting materials, while in the second case, large investments are required upon entering the company.
  • There is a certain motivation for employees in the pyramids. They are convinced that in order to obtain " favorable interest»You don't need to do anything with their investments. Waiting for and attracting new investors are the main paths leading to "great wealth".
  • When joining the pyramid, the participant signs an "important document" on nondisclosure of information about the company. Information about the founder of the company is hidden.
  • The concluded agreement with investors is drawn up in such a way that in the event of the destruction of the company, they lose their contributions.

Conclusion

Perhaps at first glance, network marketing and pyramids have similarities. But, if you understand the situation and analyze the clauses of the agreement, you can find significant differences and protect yourself from swindlers.

No matter how many warnings exist, scammers get great amount citizens. By investing in dubious projects, a person not only runs the risk of going bankrupt. Often, being involved in a large pyramid system completely blocks the rights of a participant: he voluntarily has no opportunity to withdraw from membership, is under constant pressure and, as a result, may lose all his property.

It would seem how good it is to get "free" money! But it's good when you manage to earn such money without your own financial losses... But more often than not, it turns out that Internet companies offer us to specifically "invest" before receiving income, and then they safely fall apart. It is by this principle that another Internet scam operates under loud name"financial Pyramide".

Such a pyramid exists mainly due to constant attraction new members. While it is replenished with newcomers, it exists. But this newcomer, as soon as he gets into it, becomes a "hostage". As soon as the ranks of the pyramid begin to thin out, you can forget about your investments.

MLM pyramids

There is no unequivocally negative attitude towards MLM pyramids. This is real multilevel marketing, on the principle of which many people work quite successfully. famous brands: Amway, Oriflaime, Avon, etc. The emphasis in such organizations is on the sale of a specific product or service. This method of work cannot be categorically called bad, it all depends on the quality of the product or service being sold.

The problem is that MLM pyramids are often disguised as bona fide MLM companies. recent times involve Internet users in their ranks. The difference is that they actually sell air. They don't have any unique product or service to sell. The group of like-minded people at the top of the pyramid attracts newcomers, who, in turn, invite third-level newcomers, and so on, as long as there are those willing to join.

Naturally, an entry fee is required to enter this scam. It is small, because clients receive their main "income" from newly arrived participants. But all good things come to an end. It is impossible for too long to engage in empty attraction of people and pay dividends from newly received contributions. Ultimately, the pyramid falls apart.

The most famous financial pyramids

Typical Madoff scam

This man was unique, Madoff. Although this can probably be said about any financial scammer. Enterprising people, since they managed to involve so many people in their "brainchild". So Bernard Madoff's pyramid lasted about 50 years! More than three million defrauded depositors on total amount 65 billion rubles!

At first, the scam did not bode well. Solid investment fund, a large number of depositors, reputation, dividends for investors were 12-13% per annum. When in 2008 a number of investors demanded from Madoff to return 7 billion of the invested funds to them, the company was unable to pay them off, because for the last 13 years it has simply not been engaged in investments!

The would-be swindler was surrendered by his own sons, to whom he revealed the secret of his fraud. He used the Ponzi scheme, known at that time, to create his pyramid. As a result - 150 years in prison!

Ponzi circuit

An Italian fraudster came up with his business scheme back in 1919. He created the SXC company, began to attract investors who, through his firm, could make good money on the sale and purchase of goods in different countries... But he offered to invest in the securities of his company and in 45 days he offered investors to enrich themselves by as much as 150%!

Ponzi was good at warming up the heat of passions about his miracle company in the newspapers. Thus passed good publicity, and the residents of Boston rushed to buy his papers.

In fact, the firm paid the old investors the money of the new investors! A common pattern these days. And Ponzi himself, as the top of this pyramid, had a very decent income - 250 thousand dollars daily. After checking his company by the authorities, it became clear that it was a pyramid. As a result - 5 years in prison.

America's insurance system

It may seem strange to you, but American system insurance, introduced back in 1935 by President Roosevelt, has a pyramid-like structure. At that time, she was called to fight poverty, pensioners and the unemployed could receive at least some money. And the proceeds came from the taxation of working people.

The system has undergone long years significant changes, but the meaning remains the same: old investors have the opportunity to receive "dividends" at the expense of new ones. Analysts believe that this insurance system will collapse by 2018. There are more and more pensioners in the country, and there may not be enough money for everyone.

How to recognize modern internet pyramids?

Recently, casinos, sweepstakes have already flooded the Internet. The pyramids also began to look for their clients on the Internet. A tool such as a webinar helps a lot in this, where you can competently explain to citizens where and how to send money. And without them, after all, you will not get the income that attracts so beautifully on the pages of sites.

Experts have long figured out the basic principles by which the pyramid can be calculated.

  • Often these companies don't even sell any product. They are selling levels of participation in the company.
  • It is impossible to pass such a pyramid from a beginner to the top. This is understandable from the outset. The top of the pyramid will still receive all the basic income! You will only be entitled to a certain percentage of the beginners' income.
  • The constant connection of newbies will not last forever! Again, because there is no product or service here. And keep in mind that when connecting newcomers there is no guarantee that they will not turn out to be a weak link in the chain that you need to build under the terms of participation.
  • A company that does not have an office in Russia is not officially registered as entity, then she has no right to engage in any activity at all. Foreign companies there are many on the Internet, but will you go to the same America or Japan to sort out relations with an unscrupulous payer, if suddenly he stops paying you bonuses?
  • You should be alarmed by the high interest on income. A high interest per annum is sometimes beyond the power of even a reputable bank. The pyramids, on the other hand, offer to get income in a short time.
  • If you notice any psychological pressure on newly arrived people in the form of the obligatory purchase of talismans that guarantee success in business, miracle products, collective trainings, joint repetitions of special chants, etc. - be aware that this is also a scam.

There is enough deception on the Internet now. The most "enterprising" comrades are trying to cheat us all the time. In order not to become a victim of such a scam, you need to pay attention to even the smallest details in the activities of companies. Arm yourself with information, be smarter!

Greetings, dear reader! In this article I will cover the topic of MLM pyramids (MLM - Multi Level Management, which means in Russian a multi-level management structure). In the previous article, I talked about the classic type, but left the topic of MLM pyramids not disclosed, since I decided to pay special attention to it, so that it would be more clear what the difference between these pyramids is.

To begin with, there are two types of MLM pyramids.

The first type, these are legal pyramids, and which pursue beneficial cooperation for both parties, this is essentially network marketing. We know of such structures from real life such as Amway, Avon and oriflamme. But you and I are interested in similar structures in the virtual world, and so, here, such structures are various multi-level and affiliate programs. The bottom line is this, brought a person, he made a sale, get a percentage of his sale. Everything is clear! This scheme is legal, people sell goods to people, everyone is happy!

The second type is the same, but only here they are disguised as MLM pyramids. The essence of their work is as follows:

Instead of a simple fee, the participant is sold a product that he must sell at a premium, and thus make a profit for himself. All would be good, but here are some of the main differences between the MLM pyramid, which we know as network marketing, from the false MLM pyramid.

Firstly, it is the fact that in network marketing there is no need to purchase goods for sale without first knowing what the client needs, that is, you buy the goods after the client has made an order.

Secondly, there is another enticement in the pyramids, there you need to find a person who will buy this product for sale and will also go to sell and look for more people who will take the product for sale. That is, it is necessary to recruit people who will buy goods for sale.

And the most important difference is that, in fact, the product that is purchased for sale is a dummy product, it has no value for the buyer, has a low cost price, and a huge margin.

On the Internet, you need to understand the following things in order not to fall into the second type of pyramid. Never think that you can make a profit by doing nothing. To get something, you first have to give something! This golden rule applies always and everywhere, and whoever tries to bypass it falls into the hands of scammers! If you have extra money, that before investing it somewhere, in a place that is not very well known to you, first study the subject of the contribution carefully, read reviews on the Internet, ask around those who understand this better than you. Better yet, first invest in your education, and only then take up a new kind of activity or earnings.

I want to tell people far from reality why I write articles about scams. As you all know, we have few really sane people. Therefore, everyone trusts any lie, thinking only about profit, but do not think about the consequences. Any MLM company is a deception. And its activities are primarily financial.

MLM pyramids do not exist officially, nor where are they registered, no one knows who is the owner, where the company is located and whether it is in any particular place at all. Or maybe the company is just letters on the screen? Any finance company fighting money from you must meet certain requirements. Are these demands nonsense? NO. They have been formed for a century to eliminate fraudulent schemes. After all, any scam is a threat to the state. It causes irreparable damage to the economy. How?

Imagine that the people have invested in some kind of scam. For example, MMM. The interest on liabilities exceeds the amount of money in the pyramid. 200 million Russians have invested all the money - and where to get the additional money? Nothing is produced in the country, the people are waiting for profit. For every 20 citizens there is 1 loaf of bread, each citizen has a million in his hands. How much will a loaf of bread cost? Roughly speaking - 20 million. Only those who have 20 million on hand will be able to buy bread, since there is a shortage of goods in the country. Otherwise, global hunger will begin. Thus, the economy protected society from general extinction and motivated other people to produce goods. Speaking simple language- made to work.

And now, the real requirements of any state to a financial company:

1) A certain percentage of the organizers' equity capital. Ifthe founders of the company do not have their own money, then:

  • a) they will not adequately manage the money and will drain 100% of it. They don't care about the risk, not their own money. And if the company does notregisteredand zero responsibility is generally all the same.
  • b) organizers do not know how to manage capital, they do not have their own own money because they are not able to earn them. This is the main indicator. Do you think you can learn from your means? Do you want to take a chance?
  • c) the financial company is cheating. Why are the organizers not investing their money? They don't want to develop the company or are they afraid of something?

2) The concluded contract with the client. Stupid pyramid lovers just give their money, without guarantees, on an even word. Who are you going to demand money from? From scammers? Do they owe you? You yourself transferred money to them just like that.

3) Agreements, other documents and their copies must be kept in the manner prescribed by law. Or does someone want his documents to be used? Do you think no one can? Did you know that some of the forgeries are originals? Scammers use real wet seals, real information and only remodel individual elements. Trust me, this is not something that is possible, but easy.

4) Availability of own or rented premises. What for? Well, you don’t need internet fools. And normal investors just need the legal address of the company, or at least just the location. Where will you go to control your funds?

The organizers of MLM pyramids, exchangers, doublers, auctions and other dregs have long come up with many ways to mislead people: selling fictional goods, working in MLM marketing, investing in mythical items, mutual aid cash desks, exchangers, copies of real companies, etc.

The main signs of a financial pyramid:

  1. The presence of a pyramidal structure, the search for partners and the receipt of their profits, matrices, etc.
  2. They demand money for participation in the project.
  3. Availability of levels, ranks, payment for being in the project, etc.
  4. Buying mythical goods.
  5. Principles-based auctions MLM marketing, in particular Scandinavian.
  6. Lack of state registration of the enterprise.
  7. Failure to pay taxes, etc.

The psychology of a fraudster is to make the victim unconditionally believe in any nonsense. Therefore, the creation of trusting relationships is its main task. As soon as the victim starts to believe, consider the fraudster won.

Almost everyone who was deceived by scammers could not believe that they were scammers. The victim is the last to blame them. Even when the pyramid falls apart, about 60% of those who have lost their money to the last believe the thieves. The intelligence services, the state, the CIA, the KGB, Santa Claus, Monica Livinsky and others who, in their opinion, do not want life are accused of the fall of the project common man has improved.

Why is this happening? The reason is ignorance and ordinary stupidity. The person does not understand how the system works. For example, Mavrodi compares MMM to the work of a bank. Tells stories about the emergence of money from nowhere. And after that, it offers a fabulous percentage per month. There are many materials on the network telling how the MMM works, but the contributors do not want to believe it. They are already zombified.


A person believes in what he wants to believe. He wants free money, he will find it in an MLM project or a more sophisticated pyramid. Then, he will be robbed and he will put on a new owner like a ram and will allow himself to be cut.

Who is a scammer? This is a strong-willed, self-confident person with the gift of persuasion or credibility. As the people say, brother-in-law.

Scammer's victim:

  1. A person who wants to get rich quickly and effortlessly
  2. A person who has a pliable character, is led on any adventures and is not able to adequately assess the event in which he gets involved.
  3. A man who, by virtue of his personality traits endowed with faith in people and is not able to critically assess the proposal of the swindler.
  4. A person who is not able to make decisions on his own and does everything to please the crowd. Almost all MLM projects and HYIPs are focused on such individuals (I wanted to write loshkov here, but changed my mind).

How to understand that they want to drag you into the pyramid? Here are the signs of a pyramid:

I have never in my life invested in any pyramid, MLM, etc., and I do not advise you.


Periodically, someone asks me - a what is MLM? What does this foreign term mean? MLM - what is the difference from pyramid schemes?

So, MLM, Multi-Level Marketing, from English, Multi-Level Marketing, or Network Marketing is a multi-level system for promoting goods from the manufacturer to the end consumer.

MLM Is a way of promoting products from a manufacturer to a buyer of a given product, while the manufacturer promotes its products through a network of independent agents, individuals. Agents, in turn, have the ability to recruit other people as assistants for more effective sales products, thus building their own sales network. Hence the second name of MLM - Network Marketing.

Do not confuse MLM and Financial Pyramids - this is absolutely different concepts... MLM is a way to promote a product, along with retail and direct sales. Financial Pyramids, however, are illegal fraudulent structures, the sole purpose of which is to quickly enrich those who are at the origins of the pyramid.

Financial Pyramids and MLM companies have a similar structure and can be easily confused. Therefore, it is important to understand what MLM is - the difference from financial pyramids and by what criteria it can be proved.

How to distinguish MLM from a pyramid scheme?

First of all, the difference is in the product. If there is no promotion of a product or service, then this is a pyramid. Indeed, if there is no movement of goods, what kind of marketing is it (marketing is the promotion of a GOOD OR SERVICE on the market)?

Also pay attention to the product itself. Many pyramids disguise themselves as MLM companies with the help of goods that, in fact, do not carry any value. It can be plastic cards, some badges, cheap overpriced goods, etc. home distinctive feature legal MLM-Business - turnover. If you are offered to earn money by building a network at the expense of the contributions of other participants without visible turnover, you should know that this is an illegal pyramid.

In the end, turn on the logic and pay attention to the earnings that you are promised. If you are promised bonuses from all levels of your network down to infinity - think about where to get this money? A legal MLM company can offer you only a certain percentage of the real turnover, which it distributes over several levels of your network. Notice percentage of the turnover of goods, not a percentage of contributions from other participants .

Financial pyramids and their differences

What is a pyramid scheme (pyramid scheme)?

Such a scheme implies a constant flow of money from new participants, to those who are already at the very top of the pyramid in advance. If there are no new participants, the pyramid will fall apart, tk. money is "earned" only from the sale of a place in the pyramid.

You need to know:

Participation in the "financial pyramid" is doomed to failure!

Pyramid organizers are real pros in psychology. In meetings with new members, they create an atmosphere in which group pressure and promises of huge surplus profits act on people's greed and fear of losing the opportunity to make big profits. In the conversation, every effort is made so that there are no unnecessary questions from the interlocutor. Many pyramid organizers give their activities the appearance of multi-level marketing.

MLM is a legitimate business that uses a network of independent consultants (distributors) to market products. In case a distributor helps others to start their own own business, teaches, the company pays him a bonus on the sales volume of his business partners. Such a company is Oriflame (Oriflame): there is no initial investment, the company has been developing steadily on the market for 45 years, more than 3 million consultants around the world, the business is inherited, etc.

MLM - the difference from financial pyramids

1. Initial costs (how much do you need to pay / buy products to register with the company?) In Pyramid schemes - to join - you must pay a significant amount (from $ 1000 to $ 10,000)

You do not need to purchase products and the registration cost is max 149r. (Online registration is generally free. And 149 rubles - for a beginner's starter kit, with catalogs, reference books and the necessary tools consultant) - paid in the first order.

2. Are the company's products intended for end users? In MLM, a product is sold to consumers. In the “pyramid”, the product does not reach the consumer. Pyramid income - bulk sales to new members of the pyramid (mandatory purchases to maintain membership). And sometimes there is no product at all. In the Financial pyramids, for the money paid - people are given some pieces of paper (a certificate, voucher, share, a receipt for the donation of money to the organization's fund and other worthless pieces of paper).

Oriflame is a legal legitimate business

At Oriflame you do not purchase products, you receive a catalog upon registration, according to which your customers place an order. You just need to place an order and bring it to the client. You pay money for a REAL product that is worth the money. What does it have to do with the product that customers need! Millions of women and men use Oriflame products every day!

If you have been invited to a business meeting in any company - ask more questions: about the company, about products, about sources of income for distributors.

Be sure to inquire about the company's status with the Direct Selling Association (DSA). Don't risk it! Choose an honest business! Write in the comments what other difference between legitimate mlm companies and financial pyramids do you know?

With the pyramids sorted out, let's return to MLM.

What distinguishes the MLM industry

Many people don't even realize how powerful MLM marketing is. Industry Network Marketing, born in 1945, is developing by leaps and bounds. MLM is currently flourishing in over 200 countries around the world. In Japan, for a long time, there are more than 2 million distributors promoting products worth over $ 30 billion a year. The USA has millionaires who made their fortune with MLM.

Already today, many goods and services in the world are sold through the MLM network. And every year this number of goods increases due to correct system marketing and demand for quality products. I hope I convinced you that MLM today is a serious, stable and very promising business... And the main word here is business.

This is exactly the business. Moreover, this is a business, both for the manufacturing company and for each individual distributor promoting the goods of this company. In MLM you work only for yourself. This is your personal business with all the features and attributes characteristic of any business. And this business entirely depends only on you. You fully own and operate your business.

And this business is available to you just as it is available to absolutely every person on Earth, regardless of gender, age and nationality. MLM is today called a phenomenal phenomenon in the field of economics and the hope of the future. Think about your future. It can change into better side and you will be able to fulfill your dreams and plans. How thousands of successful networkers around the world have done it!

I hope the topic of MLM - the difference from financial pyramids has cleared up a little for you? What else would you add to this or what questions you have - write in the comments!