Differences between pyramid schemes and network marketing

important differences between pyramid schemes and network marketing

(many thanks to cobrasoft at sxc.hu for his free photo, and apologies for cropping it to fit)

Differences between pyramid schemes and network marketing…

When you talk with people about your new network marketing business, have you heard: “Oh! Yes! I know…it’s one of those pyramid things, isn’t it?”

Network marketing is most definitely not a pyramid.

Here are some very important differences…

      Pyramid scheme                                                                                                 Network (or Multi-Level) Marketing

Business not market related

                                                                                                                 Potential market has been thoroughly researched

There’s no obvious product

Confidence from real products supported by money-back guarantee

Encourages large outlay

Nominal joining fee and no stock purchase requirement

Requires monthly payments to assure turnover & profits

Once off joining fee, then annual subscription renewal

Not everyone has the same opportunity for profit sharing

Each distributor has an equal opportunity to prosper

Earnings are based primarily on signing people

Rewards are offered for retailing and networking activities

Governed by a fixed matrix structure at each level

No restriction on the number of people at each level

Promotional material sold at profit-making prices

Promotional material sold at nominal prices

Promises money for no work through pyramid-shaped sponsor lines

No work…no money

Provides inadequate training (if any at all)

Free training provided on products and business

Cannot out–earn the person above you

Can out-earn anyone above you

Illegal in most countries

Genuine, legal business

Does not adhere to a code of conduct

 Affiliated to, and governed by, the Direct Selling Association

Usually not in existence for longer than a year or two

GNLD has been successful for well over 50 years

Doesn’t operate simultaneously in more than one global market

GNLD operates in 53+ countries


There are probably a lot more differences I haven’t thought of. If you know any more, please let us know. Thanks.