Simply put, marketing is the profit of the product, and pyramid schemes are the profit of the downline!
It's about whether or not to charge a headcount fee!
The money? It depends on how you run the business!
The more money a pyramid scheme makes, the longer you go to jail! That's not legally allowed!
Six differences between illegal pyramid schemes and direct selling:
Difference One: With or Without an Entry Fee
Illegal pyramid schemes usually have several distinctive features, the first of which is the presence of a relatively high entry fee. Some illegal pyramid schemes charge a stiff entry fee, ranging from three to five hundred to one thousand dollars. Of course, there are some "smart" illegal pyramid scheme companies, they will have other alternative forms, such as: to subscribe to the entry of the product on the grounds of charging a few hundred to a thousand dollars ranging from the cost. It is understood that these illegal pyramid schemes participants through the payment of an initiation fee or subscription of goods and other disguised payment of the initiation fee, to obtain the qualification to join, introduce or develop others, and in return. And there is no such fee in a regular direct selling company.
Difference two: there is no reliance on high-quality products
This is also a fundamental difference between illegal pyramid schemes and direct selling companies, illegal pyramid schemes often rely on products that are worthless but high-priced products, a set of cosmetic products worth tens of dollars can be priced at hundreds or even thousands of dollars. The standardized direct selling company's product price tag is value for money.
Difference three: whether the product circulation
Illegal pyramid schemes are nothing more than a game of "crowd funding", where high entry fees are coupled with low-quality, high-priced products that can't be circulated in the marketplace, and won't last very long. Their sales approach is to let all the sales representatives to subscribe to the products, but these products do not circulate in the market, only as a sample of the next sales staff into the sample or promotional products. The final situation is that all sales people have a copy of the product, and the product is not circulated or sold in the market at all.
And the organizers of these illegal pyramid schemes also derive most of their revenue from the fees paid by participants in the form of initiation fees or subscriptions to commodities, etc. Because the products do not circulate, the organizers mostly use part of the fees paid by later participants to pay for the remuneration of earlier participants to maintain their operations.
But direct selling enterprises are completely opposite, on the one hand, the enterprise products require good quality. For direct selling companies, the product is good or not is the fundamental reason to determine the sales of the product, because the distribution channel of the product is from the manufacturer through the marketing representative to the hands of the customer, there is no other link in the middle, and there is less advertising.
Difference 4: whether there is a return guarantee system
It is understood that illegal pyramid selling companies can not return the product once the sale, or find ways to return customers to set up obstacles.
This is completely different in direct selling companies. Any regular direct selling company will provide customers with a perfect purchase guarantee. For example, to the general customer commitment in the purchase of goods within 7 days after the return of the product still has a sales value, you can get 100% cash refund. For high-quality customers, some direct selling companies also promise that within 10 days of purchase can be returned once used or non-sales value of the product (the remaining amount of at least half) can get 50% cash refund or 50% of the equivalent purchase amount.
Difference 5: the structure of the sales force with or without transcendence
To pull the head to realize the gains of illegal pyramid selling companies, the structure of the sales force is often presented as a "pyramid" type, such a sales structure leads to whoever comes in first on the first, and at the same time, the first participants in the development of the downline members from the entrance fee paid by the members of the revenue, and the amount of revenue by the lower line members to obtain income. The first participant receives income from the initiation fee paid by the members of the downline, and the amount of income is determined by the order of their joining, and the consequence is that the first participant is always ahead of the later.
This kind of unsurpassed in the direct selling company does not exist, in the direct selling enterprise regardless of the participants to join the successive in the earnings of the performance of "more work, more pay".
Difference six: with or without store
China experienced a comprehensive rectification of pyramid selling in 1998, many foreign direct selling enterprises have been transformed. Since then, the "store hired salesman" model has become the main sales model of the standardized direct selling enterprises. This particular direct selling operation allows the salesman to be attributed to the store, which not only has a direct relationship with the company but is also easy to manage.
Illegal pyramid selling enterprises often stay in the development of personnel, organizational networks engaged in the state of business activities without stores. Until today, the presence or absence of stores is still an intuitive distinction between illegal pyramid schemes and direct selling in our market.
Another way of speaking:
The most central part of a pyramid scheme is that its members of the organization are still traditional distributors of emotion.
Since they are distributors, they have both rights and obligations. The right is that you can also wholesale products at favorable prices, get bonuses, training, etc.; the obligation is that you have to undergo regular assessment.
One of the most attractive aspects of MLM is its religious corporate culture, which is a basic model on which MLM survives. Therefore, the biggest difference between EFT and pyramid schemes is that EFT informs every consumer of the benefits of the products that the average consumer should know, and then publicizes the rewards for consumption, so that everyone is equal.
There is no pressure to zero in on time and no regular assessment of sales performance. Because the nature of consumption is no pressure this is the EFT reward system humanized place.
This is the humanization of the EFT reward system.