Inside story of pyramid scheme (revealing the truth of pyramid scheme)

MLM is an illegal economic activity which takes offline recruitment as the main means and high returns as the bait to lure people to invest. However, the truth behind pyramid schemes is shocking. This article will expose the inside story of pyramid selling, help people recognize the true face of pyramid selling and avoid being cheated.

First, the basic routines of pyramid selling

The basic routine of pyramid selling is: under the guise of product sales, develop offline, develop contacts, form a pyramid-like organizational structure, and finally obtain profits by recruiting or selling products offline as the main means. MLM organizers usually take high returns as bait, and promise to get wealth and success easily when they go offline. However, these so-called returns are all false, just to invest more money in offline.

Second, the operation steps of pyramid selling

1. Product sales

MLM scams usually use product sales as a cover to convince downline that this is a legitimate business activity. Organizers will sell some seemingly high-end products at low prices to attract offline. However, the quality of these products is often unsatisfactory, and may even be fake and shoddy products.

Offline recruitment

The core of MLM is to recruit offline, and organizers will use various means to attract offline and convince them that this is a reliable investment. Organizers usually promise that they can easily get high returns offline, and some even claim that they can help offline realize wealth freedom. However, these promises are false, just to put more money off the assembly line.

Develop contacts

The organizers of pyramid schemes usually let the downline develop contacts and form a pyramid-like organizational structure. Going offline needs to recruit more people to join in order to get more returns. The core of this organizational structure is offline recruitment, not selling products. Therefore, pyramid schemes often ignore product quality and focus on offline recruitment.

Earn a profit

The ultimate goal of pyramid selling is profit. Organizers will take offline recruitment or sales of products as the main means to make profits. However, these so-called returns are all false, just to invest more money in offline. Once the funds invested by downline can't meet the needs of organizers, it will disappear, making it impossible for downline to recover its investment.

Third, how to avoid being deceived

1. Invest cautiously

Any high-return investment is risky. If an investment looks too good, it should be treated with caution. Don't believe the so-called high return easily, but do a full investigation and analysis. If an investment looks too good, it should be treated with caution.

2. Beware of pyramid schemes

The organizers of pyramid schemes usually use high returns as bait to get people to invest money. Once you find that an investment looks too good, you should be wary of pyramid schemes. If you find that the core of an investment is offline recruitment, rather than selling products, you should be wary of pyramid schemes.

3. Understand the relevant laws

Knowing the relevant laws can help you protect yourself better. In China, pyramid selling is illegal, and any economic activity with offline recruitment as the main means is illegal. If you find that an investment is suspected of pyramid schemes, you should call the police in time.