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Multi-Level Marketing And Network Marketing: How To Identify Illegal Pyramid Or Ponzi Scheme

Jun 2, 2008
There are a tons of people that want to get rich fast, and they will do anything (and believe anything) to get rich. That is where the multi level marketing and networking schemes come into play. The two main types of schemes out here are the pyramid schemes and the Ponzi schemes. A Ponzi scheme is, of course, a fraudulent investment operation. Pretty much it involves paying very high prices to investors out of the money they get from other investors.

Of course, the Ponzi scheme is just another pyramid scheme. A pyramid scheme is pretty much where you pay high dollar for the rights to sell a product that is not worth the money. Then you get people under you to sell that product as well. These schemes fall apart as people run out of people to market their fake product to.

So how do you avoid these scams? How do you know what is a real opportunity, and what is just an illegal scheme? A good way to be able to tell a pyramid scheme when you see one is to look at its business model. A lot of time these schemes have a non sustainable business model. That is because these models sometimes call for more people than there are in the world. So that would be impossible to have that many people selling the product. It's important to keep in mind that these schemes are illegal in most countries.

Another way that you know if it's a pyramid scheme is if you are not actually selling a product. A lot of times these schemes take either a very cheap made product or a product that does not even exist, and they market it to people. The only way that the scheme stays alive is if the people that they market to, markets the product to other people as well. The only people that really make any money off these schemes are the people at the very top of the pyramid. So if you never actually get to see the product you are marketing or trying to enroll people in, then it's more than likely a scam. Remember, these pyramid schemes only work, because you enroll other people that are willing to give you money to start selling what you are selling (which is really nothing).

There are some legit ways to make money out there, but these pyramid schemes are not one of them. So be sure to research anything you are thinking about joining first. Make sure that it's legit before you get involved. The last thing that you want to do is get involved with an illegal pyramid scheme.

I often do get asked how to start a profitable internet business. I would say that the best way to make money online if by finding a niche and develop a product or service around that niche. That way, at least, you are sure to have someone interested about whatever you are selling.

To Your Success!
About the Author
Do you want to learn more about Internet Marketing? I have just completed my brand new guide to Search Engine Marketing Success: ''How To Consistently Drive Thousands Of Targeted Visitors Every Day With Search Engine Optimization''. Download it free here: Search Engine Optimization Success. Affordable Search Engine Optimization Services.com Serge Daudelin is a Search Engine Optimization specialist and consultant who has written over 300 articles in print and 5 published ebooks.
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