Do you Know the Difference Between a Business Opportunity and a Pyramid Scheme?

[Kelly Webb]

What is the difference between a Business Opportunity and a Pyramid Scheme?
The Facts
Some people confuse the business opportunities of Amway, Herbal Life, Shaklee, Mary Kay, Avon and ShopToEarn with disreputable pyramid schemes. However, there are major differences, which have been officially recognized by the US Federal Trade Commission.
Multilevel or "network" marketing is a lawful and legitimate business method that uses a network of independent business owners to sell consumer products and services supplied by an established company. Business owners merchandise products to consumers, not in fixed retail stores, but through person-to-person relationships between business owner and customer.
Business owners can also build and manage their own sales-force by recruiting, motivating, supplying and training others to sell those products and services. Compensation then includes a percentage of the sales of the business owner's entire sales group as well as earnings from their own sales to retail customers.
Pyramid schemes are illegal scams in which participants invest a large amount of money in exchange for the promise of receiving profits by recruiting additional participants to make a similar investment. Pyramid promoters sometimes try to make their schemes resemble multilevel marketing methods by introducing a product line. However, little or no effort is made to actually market the products to consumers. Instead, compensation is paid for recruiting.

If you are in the position of operating a network marketing business are you comfortable in explaining the difference?
How do you explain the differences?
Is your company product based?
Is your company recruiting based?
Or both or something all together different?
Would love feedback.

[Ken Armstrong]

Great inquiry...sent you an e-mail Kelly.