The main difference between network marketing and a pyramid is that the network company

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Is based on a real product that needs to be promoted and sold. The principle of a financial pyramid is the constant receipt of funds from its participants.


The marketing structure and the way of earning money in a pyramid show some features that will help you avoid being caught by scammers. Let's look at the principles of existence of financial pyramids:

- companies operate illegally, attract clients mainly linkedin data via the Internet, and store funds in offshore zones.

- the founders of financial pyramids avoid answering questions about taxes, place of registration and legality;

- financial pyramids either do not have a product at all or its price does not correspond to the value,

- the only source of income for the pyramid is the constant contributions of its participants;

- the task of the pyramid participants is to bring as many solvent clients to the company as possible.


Unlike an MLM company, which assumes a long-term partnership and stable development of the structure, any financial pyramid will sooner or later collapse. Pyramids collect deposits from participants and pay commissions on them for a certain period of time. But when the influx of new people becomes less and less, and payments must continue to be made - the company ceases to exist, and all the invested money remains with the creators of the pyramid.


Fraudulent projects do not exist for long, while many MLM companies operate for decades and actively compete with traditional businesses. This is confirmed by the example of international network companies ( Amway was founded in 1959, Mary Kay - in 1963, O riflame - in 1967) . Every year they scale up and provide partners with real value. Let's consider the indicators of a successful network business:

- the company is officially registered, licenses and all necessary documents have been obtained in accordance with the legislation of a particular country. The company's documentation is freely available on the website;

- the network company has its own high-quality real product, which can be purchased at a favorable price only from its distributors;

- the turnover of goods in a network company occurs regardless of whether there is an influx of new consultants;

- there is a prospect of career growth, and earnings depend on the volume of product sales;

- a network structure that has been developed over the years can be passed on to heirs or sold as a share in a business.


Work in network marketing is based on support and training of partners, which is the key to successful work.