Have you ever wondered what
difference is? MLM operators claim they're not operating a pyramid scheme. Matrix and "forced matrix" operators claim that what they have is better than MLM. So what are
differences?Pyramid Schemes:
Pyramid Schemes are illegal in
USA, and probably abroad. We all know how these schemes work, or at least get
jist of
idea. A person (the originator) starts by sending a message to several people. Usually people he/she knows. The message in some round about way, will tell everyone to send him $5 or so...and then send
message to someone else. All
while adding names to
list, and each new recipient must send money to
first person, second person...etc
There are a million variations of
Pyramid Scheme, but
main attribute that define a pyramid scheme ( also known as chain letter) is that there is no product, it's just people sending money. The term "Pyramid Scheme" is derived from
fact that it starts with one and
size of those involved increases as you move towards
bottom. On paper, it looks like
shape of a triangle, or pyramid.
Multi Level Marketing:
How is MLM different from a pyramid scheme? After all, on paper any MLM looks like a pyramid in reality right? The differences are very simple. In MLM there is a product being sold. Income is generated from "commissions". It's actually a pyramid scheme, except that
participants get something back...regardless of whether
people they refer actually pay for something...
In MLM,
participant always gains from their investment. The catch is in
value of
product that
participant receives. This is
reason that MLM is so big on
internet. Because, information can have a monetary value, and it cost
distributor nothing. So ebooks, software, newsletters...etc... these are
most common products used in MLM. MLMers have added tangible products as well, and home products were
first to use MLM as a primary marketing strategy.
The Forced Matrix:
With so many MLM programs on
market these days, originators have tried to make their programs more desirable than others. Hence
forced matrix idea. In a regular MLM program, your monetary gains are based entirely on how good you are at marketing
program. However, most people arent' very good. So it would benefit
less talented if they had help from
talented. Basically, if
number of people who can join under you is limited in any way...then it's a forced matrix. The idea being, anyone else you refer extra..will go under someone else. The best implementations put
extra person under one of
people YOU have under YOU. Hence it helps
person under you, which helps you too.