Seriously…MLM vs. Gifting? How about Scam vs. Scam or Ponzi vs. Ponzi because they are all Pyramids! You know people keep looking for what they think is a sure thing and for some reason they always get stuck in the dreadful MLM or Gifting Scam which is nothing but a Ponzi or Pyramid. They don’t mean to, it’s just when then see websites making outrageous claims with pictures of luxurious cars, boats, mansions and other materialistic things it’s kinda hard to not stop and read about how they can have the same thing.
I will tell you one thing upfront yes they work. You heard me…they work. Unfortunately, it only works for the first several people and it definitely worked for Bernie Madoff. Now, seeing this trend you are seeing more and more tech companies selling this MLM and Gifting software and it’s relatively cheap. This welcomes scammers to buy and use this software to launch a Ponzi or Pyramid Scheme. They just have to name the Scheme along with some content and pictures and publish it online and then BAM you just got suckered. There’s no telling how long it will last before it bottoms out or gets shut down for fraud by the SEC(Securities Exchange Commission) but the people atop of the Pyramid have already made their money.
What is MLM?
It stands for Multi-Level Marketing, also known as network marketing, referral marketing, direct marketing or pyramid selling. This pyramid based marketing strategy is mainly focused on 2 income streams: direct sales to customers and from commission based recruitment of members known as your downline. Salespeople can expect to sell products directly to people thru word of mouth or referral marketing. Plus, members are offered incentives to recruit others to join as distributors.
MLM’s and illegal pyramid schemes have been categorized as illegal on one key distinction that MLM’s rely on selling of an actual product. Because of this, due to the structures of MLM’s it is unrealistic for salespeople to profit. However, the MLM’s themselves generate millions of dollars in profit thanks to all of the salespeople. In essence, the salespeople get shafted.
MLM salespeople are not considered employees, so they receive no salary or wage. They also receive no reimbursement from the MLM for any labor or expenses they must rely on compensation from profits they generate thru the MLM structure. Since they are not considered employees they are unprotected from their legal rights of all employment law statutes and provisions. MLM’s categorize there salespeople as business owners or independent contractors, however the salespeople do not legally own an actual business because they have no assets or goodwill meaning some kind of compensation if they sell the company.
MLM salespeople normally only profit by recruitment of other salespeople. When a salesperson recruits another to become salesperson they make some type of compensation or commission. Then that new salesperson recruits another and so forth, this is also known as a cycle. Companies that use these MLM models are frowned upon and are subsequent to lawsuits due to the fact their similarities to pyramid schemes.
Spotting a MLM is relatively easy. They normally have high initial investments, encourage you to recruit others over selling of a product, requiring you to purchase their so called product, make money of materials an training and exaggerated compensation plans.
Don’t get me wrong, there are legal MLM’s out there but they are borderline pyramids. But basically you are getting people to join, they pay you, every one they refer pay them and a portion goes to higher ups. Long story short, money is always going up. Until people start complaining about an MLM will the FTC(Federal Trade Commission) go in and investigate the company.
What is Gifting?
Process of giving an individual or organization money as a charitable act. Cash gifting is the process of giving money and not receiving it. Cash gifting is legal and you can gift up to $12,000 without being taxed and you can also write it off as a donation.
The problem when it comes to cash gifting is it is borderline a pyramid. The definition says your giving money and not receiving it, but people are abusing this by creating gifting programs simply for profit. So, cash gifting is legal, but when it becomes a cash gifting program it becomes an illegal pyramid or ponzi scheme. So it’s similar as well to an MLM. What did I say a MLM was? You are getting people to join, they pay you, every one they refer pay them and a portion goes to higher ups but money is always going up. The best description of a gifting, pyramid or ponzi scheme is a program called iCharity Club. What I find funny and insanely crazy is this their diagram showing money chart.
Check it out, who the hell wouldn’t want to join! I would definitely want to earn over 16 billion dollars in CASH. Regardless, if you were to join a cash gifting program it will end up being defunct or shut down due to the fact there’s always gonna be somebody losing there money. As stated earlier, Bernie Madoff became a billionaire off of scams like this. But where is he now…JAIL!
All in all, you can make money in all of these programs whether they are pyramid or ponzi schemes. But when you join these programs you are looking to extract money from other people and then put it on them to do the same to others. So it is inevitable that people will get hurt and lose their hard earned money.
If you are looking for something to make an honest buck there a plenty of ways to do it. Me personally, making money is the easiest with online businesses. To see what I do to make an honest and very rewarding income I recommend starting here.