This blog post is the companion post to the video: How to Tell if a Company is a Pyramid or a Legitimate MLM.

You may have been recruited for a network marketing opportunity or you are a recruiter. Inevitably, this question will come up, is the company a pyramid scheme or a legitimate business opportunity?

Although this is a complex legal area, let me share a simple metaphor that draws a clear line in the sand.

The metaphor is about a gentlemen, will call him Party #1, and he sells a case of canned tuna fish to Party #2 for $10. And, Party #2 sells it to Party #3 for $20, and Party #3 sells the case of canned tuna fish until it gets to Party #10, who buys the case of canned tuna for $500. And, Party #10 opens up the case of tuna fish and it’s rancid. It’s inedible.

He goes back to Party #9 and complains, “I bought this case of tuna for $500 and it’s rancid.” Party #9 tells him to take it to Party #8, and Party #8 tells him to take it to Party #7, and so on until Party #10 goes all the way back to Party #1 and says, “You’re the one who started all of this! I have a problem!”

Continue reading »

This blog post was created to bring you all the web pages, videos, and informational material about pyramid schemes vs. legitimate (legal) MLM companies from MLMLegal.com and MLMAttorney.com together in one place, for your convenience. This post is accurate to its publication date. Keep checking www.mlmlegal.com and www.mlmattorney.com for updates on the direct selling industry and pyramid schemes!

Here is a list of all the links within MLMLegal.com and MLMAttorney.com that focus primarily on pyramid schemes.

Videos

Short Course on Network Marketing: Q&A with Jeffrey Babener on Pyramid Schemes

From a Legal Perspective: The Difference Between a Pyramid Scheme and Legitimate MLM

Continue reading »