It's not a pyramid scheme, it's part of direct selling.
As of February 23, 2019 has not been recognized by the relevant departments as a pyramid scheme.
I. Direct selling, as defined by the World Federation of Direct Selling, refers to the direct sale of goods and services by manufacturers, where the direct seller bypasses traditional wholesaler or retail channels and receives orders directly from customers. Direct selling is a distribution method in which a direct selling company recruits direct sellers, who market products directly to final consumers (hereinafter referred to as consumers) outside of a fixed place of business.
On January 28, 2019, the State Administration for Market Supervision and the Ministry of Commerce held a collective interview and reminder and admonition meeting with 91 direct selling enterprises. On February 14, 2019, the Ministry of Commerce held a regular press conference, in which spokesman Gao Feng issued a release on the recent key work in the field of commerce and answered questions from the media at the scene.
Ministry of Commerce spokesman Gao Feng said that the Ministry of Commerce has now suspended the approval of direct selling for the record. Comprehensive combing and investigating the situation of direct selling enterprises, the discovery of illegal and irregular business problems, to seriously crack down.
Two, pyramid selling refers to the organizer of the development of personnel, through the development of personnel or require the development of personnel to pay a certain amount of money as a condition to qualify to join the illegal behavior. The essence of pyramid schemes is "Ponzi", that is, the money of those who come after the previous person's earnings.
The new type of pyramid scheme: no restriction on personal freedom, no collection of ID cards and cell phones, no collective class, but the capital operation as a banner to pull people to cheat money, the use of luxury cars, wearing gold and silver, etc., with the attraction of money, so that your friends and family to join, and finally let you reach the point of no return.
Expanded:
One of the characteristics of the pyramid scheme to identify:
First of all, the sky will not fall pies, when the cause or the return of the description of the sky should be wary of the high return is bound to have a high risk.
Secondly, no matter how the form of marketing changes and develops, its essence is still to buy a share of the payment of the entrance fee, the development of downline personnel, pulling the head of the composition of the hierarchy, the next line of personnel "performance" as the basis for profit.
Therefore, to identify pyramid schemes, you need to look at three features:
1, the entry fee
Whether you need to subscribe to goods or pay fees to qualify for joining or develop others to join the qualification, and make illegal profits.
2, the head of
Whether the need to develop others to become their own downline, and the development of people to develop the number of direct or indirect rolling development of the number of people as the basis for payment, making illegal profits.
3. Remuneration
Whether the remuneration is calculated on the basis of the sales performance of the directly or indirectly developed persons, making illegal profits.
If the above characteristics are met, it is possible to be suspected of pyramid schemes.
Two, marketing against the identification:
Marketing leads to the majority of consumers and investors are not guaranteed the ultimate rights and interests. MLM and normal marketing one by one control for you to identify. Consumer behavior and business behavior fuzzy, the distributor with some "tricks set". The first time you advertise is to invest in business behavior, and then you unknowingly become a consumer; or publicity is consumer behavior, and then let you become an investor.
Even citing "consumer capitalization" and other vague concepts, so that you are lost in the investment and consumption between. This makes it difficult for you to defend your rights legally (Note: Consumption and investment are two different legal concepts, and the applicable laws are the Consumer Protection Law and the Contract Law).
Organizations and leaders, in the name of business activities such as selling goods, providing services, and investing in projects, require participants to qualify for membership by paying fees or purchasing goods, services, or investments.
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