A pyramid scheme is a fraudulent business structure that recruits members through a hierarchical recruitment system, primarily focusing on monetary gains from recruits rather than actual product sales. In today's world, where financial opportunities are sought after, it is essential to understand the underlying risks associated with pyramid schemes.These schemes often promise huge returns on investment but rely on a constant influx of recruits to sustain the structure. While they may initially seem like legitimate business ventures, pyramid schemes lack a sustainable business model, leading to financial loss for most participants.
Multi-level marketing (MLM) and pyramid schemes are often conflated, but they are distinctly different business models. Understanding the key differences between MLM and pyramid schemes can help you make informed decisions as a business owner or consumer.
