Most of us have heard of a pyramid scheme. People, including government entities, were deceived into believing this was a legitimate marketing strategy because of the scheme’s significance. Multi-level marketing, or MLM, is structured such that it is mostly going to benefit the promoters at the top. At the same time, their distributors (network) at the following chain are only focused on expanding the network. Instances of the pyramid scheme can be traced back to the mid-1800s, followed by the ponzi scheme in the 1920s.
And yet, this issue exists in modern-day society. It took decades for us to recognise this problem, and still, there are debates surrounding the credibility of this marketing practice. And evidently, we are now witnessing an online form of MLM, which is, to some extent, more harmful to marketers and publishers, and people aren’t even aware of this.
Traditional MLM
Multi-level marketing, also known as network marketing or pyramid selling, is a monetary model and strategy companies use to encourage existing users to recruit new customers. Existing users are encouraged to promote and sell the company’s offerings to other individuals and bring new customers into the business. The motivation to do is that they are paid a percentage of their new customer’s…
