A Brief Comparison Between MLM and Pyramid Scheme.

Last Update: Nov 19, 2016


Hi Guys,

I decided to write this blog because of the "never ending story" about clarifying the differences between MLM and Pyramid Scheme.

There is no any doubt about it any more:

MLM is the industry of the 21st and future centuries, thanks to more and more advanced technology, modern style of living, population involved in modern technologies, online and offline marketing efforts, education pointed in that direction and of course,because of economical changes, crisis, exploring new ways of earnings, lowering the costs of marketing, storage and other reasons...

More than 70 millions of people involved in MLM industry just can´t be wrong!
Or, can they?

Please, think for a minute: how is the regular company structured?

On the top of the company (besides the owner) is a manager (director). Below him, in the system, there is Chairman of the Board.

Below the Chairman, there are Members of the Board, afterwards the structure is filled with head of Department, Branch, head of the Team, Headman, below them Employees - people that work hard, without any chances to come to the position of the Director.

Doesn´t this all look like a Pyramid?

I am sure, that many of You already know what is all this about, anyway, to simplify the things, let us first clarify the difference between MLM and Pyramid Scheme!

MLM = Multi Level Marketing is a legal business. Many companies (big and small) are using already such strategy of marketing and working method. In this system the company has structured several levels of earnings, for their satisfied clients who are promoting the products or services form the company.

The final customer is always getting in return value (valuable product or service). This is the way how regular company can save money for expensive TV commercials, magazine ads, etc. Thanks to that, the message is travelling fast and with that saved money, the company can award their marketers (I would also say say affiliates).

For the marketer, the main issue is this one: anyone, regardless of the time of entry in such activities and marketing for the company; regardless of the level of education; regardless of any kind of background (just not criminal, of course) is getting same conditions for starting and maintaining the business, and is paid according to own efforts.

This is by far the most fair and lucrative way of payment for anybody, as for the company, same for the MLMs.

Any organization is a pyramid system. Regardless, if it is public or private one. Contrary, MLM structure is at least the Pyramid system because everybody involved is earning according to their efforts and everybody is starting with same conditions: getting same products and services, same possibilities for earning, same bonuses, incentives, same costs for the product or service, every marketer can use such products as services under same conditions, etc...

Is that not awesome?

Pyramid Scheme = chain of luck. This kind of work is forbidden. In such system, the customer is not getting VALUE (valuable product or service). The customer needs always to "pump the money" in the system and the earnings consists and depends of the people´s money paid regularly on a, mostly, monthly basis.

When this stops, the system crashes, the money is lost and there are no any further earning possibilities left. In such systems, it is always important to "jump in" as one of the first in the system and to make money quickly while the system is still working, and people are paying for the membership or for some apparent, actually not existing products or services.

This two working systems are not the same.

MLM system makes it possible:

- same working conditions for anyone
- low marketing costs
- low storage costs
- growth of the organization depending solely on the effort
- working schedule adaptable to anyone, you decide when and how much and how long You want to work, actually, how much money You want to earn..
- working with people you select,or want and decide to work with
- you can act world wide, online and sometimes offline (using mail, calling by phone, sometimes even travelling, attending meetings, etc.)
- you can be creative, use modern technologies, educate yourself, learn new stuff..possibilities are endless
- you can get support form your colleagues, from the company stuff quickly, free and with quality
- you can gain your long term wealth, become financially independent

What kind of company, makes all that mentioned above possible. Just few of them, or none. Right?

There is for sure, a better way to do it! Lets all market today! Lets make a better way!

Last but not least, some final facts about MLM:

- over 70 years already, people are MLM-ing legally
- more than 70 millions of people are already engage in MLM world wide (and it is still growing, we are still at the beginning, just a "straw in a haystack"! The possibilities are endless.
- MLM is a subject of various marketing and other Universities
- many financial experts around the world advocate MLM because of possibility for regular people to earn substantial amounts of money (high earnings) , and this all without large investments and risks.

So, what are You waiting for. Lets get marketing today, actually, tomorrow!

The world is waiting for You!

Stay healthy and enjoy marketing!

Your friend,


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Recent Comments


Here's a brief list I use to decide whether to sign up to a mlm:

Is there a legitimate product or service?
Is it a product or service that will be sustainable into the future?
Is this a credible and trustworthy organisation?
What does the compensation plan look like?

If any of these questions can't be answered to my satisfaction I don't bother.

Thanks for sharing :-)

Right way to go! Thanks for sharing!

Thanks for this helpful and informative Igor and Kyle.

YAW Pauline!

Interesting post, Igor. Thanks for sharing!

Thanks, Erica, I am glad You like it!

In my book there are a few things to watch out for
1. What is the chain like a the top of the pyramid. How long have they been in business?.
2. is there a real product or a lot of hype?
3.Are there real profits or are proceeds from the gullible buy ins repackaged to sell the new online?
One has to check these things out carefully!

Thanks, M! useful and helpful post!

There are still a lot of blurred lines as to the difference between the two, unfortunately what is happening is people are getting involved in many of these schemes not knowing what they are getting involved in (until they are shut down by the FTC).

There are definitely ethical MLM's out there, but there are also many that are in the process of being reviewed by the FTC/SEC and I imagine 2017 is going to be another year where we see brand new MLM's, but also we are going to see some of the more popular ones vanish as a result of not abiding by the MLM laws (which are continuing to evolve).

Thanks a lot for Your reply Kyle. I appreciate it!

So a proper knowledge of the regulations involved is the key!
I can understand the necessity of that, sometimes things like attributing to copyright, what information should be given, and when, and how, can harm the original plan, if not known and adhered to.
Thanks, Kyle and Igor!

thank you for sharing this educational read with us, Igor!

YAW Karax!

Thanks for clearing the difference MLM and Pyramid


Igor, this has cleared up a lot of confusion for me. Thank you ever so much.

I appreciate that! Enjoy!

Hey, man

Great piece of information on the MLM & pyramid scheme. I was one of the people thinking that they are identical.

MLM is a legal business, while the pyramid scheme is a chain of luck as you said. But, it is up to anyone's hand to start marketing they way they feel like.

Thank you for sharing & wishing the best!

You are right John! Enjoy marketing in a proper way! It can be fun!

Thanks for sharing, Igor.


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