Multi-level marketing is rarely used in the U.S. after awareness of the futile promises from pushy salesman that promise you can "get rich quick." The difference between legal direct sales and deceitful MLM practices lies in two factors :
1. a focus on the network
2. in order to sell the product, one has to be a member
http://www.vandruff.com/mlm.html
Success in such ventures rested solely on the exponential growth of new members. Hence the name "pyramid", indicating the increasing population at each successive layer. Unfortunately, simple analysis will reveal that within a few iterations the entire global population would need to subscribe in order for pre-existing members to earn any income. This is impossible, and the mathematics of such schemes guarantees that the vast majority of people who participate in these schemes will lose their invested money.
MLM roots are from the illegal pyramid schemes which are derived from chain letters. They are designed to reap small amounts of money from large groups of poorer and uneducated sects. MLM is the most successful in Russia, China, and Africa where high levels of unemployment exists and people are easily enticed to pay for the potential of a sales income.
The U.S. created anti-pyramid laws in the 1970's and the schemes have since inflicted many international economies including Russia's MMM in 1990's and the riots in China of 1998.
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