What is the Definition of a Pyramid Scheme ?

What is the Definition of a Pyramid Scheme ?

I’m sure each of us met at least once a pyramid fraud, and without even aware of. There are so many business pyramids that “suck” your last dollar under the “mask” of easy earning. In the next steps, I’ll explain what is the definition of a pyramid scheme.

What is a Pyramid Scheme ?

The pyramidal system is a business model where on top of the pyramid is owner off company, and just below them (usually close family and friends of the owner company) 10-100 persons who first started in countries where the system is allowed. And these are mainly those who earn money. It is a system where new members can make money only by including new members. The pyramid collapses when there is no more new members. Some pyramid companies their legality justify selling overpriced products.


How does a Pyramid Scheme Work ?

This video the best explains how does a pyramid scheme work .

How to Identify a company that has a pyramidal system?

1. Never talk about overpriced product

They never talk about overpriced product. They have a super great product…yeah right. Why would you pay more for inadequately tested product?

Way over priced products: 2-5 times of equivalent products in the market. Why would a real consumer pay such for products that are available everywhere?

You know why?

Because it’s the only way you can make money. The same product if not better, you can find a lot cheaper.

2. Pyramid schemes are not based on affiliate marketing

It’s not affiliate marketing as some claim.

The affiliate marketers do not have to buy the product. The earnings are based on the recommendation, and for the recommendation, I get a percentage of sales through affiliate link from my website.

I can recommend 1000s of products.

In affiliate marketing, I don’t have to recruit people.

3. I need to pay to work in the company

We will hire you in the company, but..Ahh that but .. You have to pay membership 30..50..100 dollars. A company is looking for workers, and I have to pay them. Is it ok? You need to pay me, so I invest my time for you. I am the one who needs job..LOL. Of course, you must pay various memberships... because it’s one of the ways you make money and because they are.... Pyramid scheme.

4. They employ people, and they do not know anything about a new potential employee

The company employs all. They are selling noni juice and I am forklift driver in a warehouse (no offense please :). It did not matter what I am by profession. They don’t need essentially my experience…my previous jobs ... in fact even they do not ask for a CV. Perfect company.

Can you imagine Google employs people like that? It’s something wickedly wrong? Of course, it’s not important..get in…We need new sheep for a haircut?


5. For the classic work – They argue – ” That’s the pyramid scheme “

For the classic work they argue it’s a pyramid scheme. On the top of the company is the owner – Director – Heads – then ordinary worker. And as an ordinary worker, you can not progress to the position of director. It is true. All directors come through various channels. In a normal state in this place come capable people.

If the regular job is a pyramid then no one could come to the position of director. While in pyramidal systems no one has yet gone to scale “director” because these places are determined in the beginning.

That’s another lie when they say that does not matter when you entered the system .

6. And the most important indicator that you are dealing with a pyramid – recruitment of new people

Because you sell the overpriced product, it is clear that no one outside the system will not buy the product. You will soon realize that the only way to earn money is to recruit new peoples.

If you want to lose your friends, then invite them to the presentation of one of the pyramidal system.

If your superiors require recruitment of new people..that’s sure indication that it is a pyramid scheme.

The final opinion


How does Pyramid Scheme Work ?



Here are some signs that the company is operating a pyramid scheme:

  • Your revenue is based mostly on the number of people you recruit, and the money those new recruits pay to join the company — not on the sales of products to consumers
  • Are you required to buy lots of overpriced products
  • Are you forced to buy other things you don’t  need just to stay in good standing with the company

>> Herbalife must pay a billion in damages <<

See an interesting judgment brought by the FTC in America .. https://www.consumer.ftc.gov/blog/money-back-350000-herbalife-distributors

People I do not blame you if you are involved in pyramid systems. They tricked you in their sweet words of achieving financial freedom.

The truth is only what they say you about freedom and you can be your own boss, but with pyramid schemes, you can not achieve the financial freedom.

There are hundreds of online jobs that can provide financial freedom. And the only thing you need is a laptop and someone to guide you step by step.


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