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

MLM is an illegal economic activity with offline recruitment as the main means, which induces people to invest with high returns as bait. However, the truth behind pyramid schemes is shocking. In this article, we 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, recruiting offline, developing contacts, forming a pyramid-like organizational structure, and finally obtaining profits by recruiting offline or selling products as the main means. MLM organizers usually use high returns as bait, promising that they can easily gain wealth and success after they go offline. However, these so-called returns are all false, just to get offline to invest more money.

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 realize wealth freedom offline. However, these promises are false, just to get offline to invest more money.

Develop contacts

MLM organizers usually let offline people develop contacts and form a pyramid-like organizational structure. Going offline requires recruiting more people to join in order to get more returns. The core of this organizational structure is offline recruitment, not selling products. Therefore, MLM organizations 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 of profit. However, these so-called returns are all false, just to get offline to invest more money. 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 cheated?

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. Be wary of pyramid schemes

MLM organizers usually use high returns as bait to let people invest. 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 an investment is found to be suspected of pyramid selling, it should be reported to the police in time.