Many distributors promoting MLM try to defend legit pyramid scheme similarities with MLM by suggesting that other things out there are pyramid schemes. Quite often they'll use an analogy of a CEO managing Vice Presidents, managing middle managers, managing employees as a pyramid. You'll note that they often leave off the "scheme" part of that, which is a very important distinction.
There are so many differences that it is easy to expose the person making this claim as someone who is trying to defraud you. As the FBI says:
"At the heart of each pyramid scheme is typically a representation that new participants can recoup their original investments by inducing two or more prospects to make the same investment."
When you look at a software engineer, vice president, or CEO, does anyone make their salary recruiting other people to perform the same job as they do? You may argue that a HR person recruits, but they don't recruit a chain of HR people who recruit more HR people, etc. They recruit VPs and software engineers, and those people perform their duties, which don't typically include recruiting any others.
Here are a few other obvious differences:
- The typical CEO graduates from a very difficult business school and almost typically starts with a salary upwards of $150,000 a year in an executive position.
- The employee and/or manager isn't required to buy product to earn salary. This is what you see in MLMs and pyramid schemes: MLMs with Required Minimum Purchases to Earn Commissions are Pyramid Schemes
Corporate America is simply a hierarchical organization. It isn't a pyramid scheme with endless recruiting of 2 or more people making the same investment.This post involves:
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