It is difficult to judge whether it is a pyramid scheme based on just a unit name. It can be determined based on its specific business operation model.
pyramid marketing means that the organizer or operator develops personnel by calculating and paying remuneration to the people being developed based on the number of people or sales performance they directly or indirectly develop, or requiring the people being developed to pay a fee. Acts that seek illegal benefits, disrupt economic order, and affect social stability by obtaining membership qualifications in exchange for a certain fee.
MLM can be simply summarized as follows:
1. An entry fee is required.
2. Need to develop offline. You need to constantly find collaborators and induce others to double your income under the guise of forming a team.
3. Determine how big your return will be based on the number of people below and the business performance of these people.
4. In fact, to put it bluntly, the downline is asked to give the upline 1 yuan, and the upline teaches the downline how to earn 50 yuan. As a result, when the downline gave the upline 1 yuan, the upline told the downline to find the same ten idiots to be the downline's downline.
The State Council
Regulations on the Prohibition of Pyramid Selling
Article 7 The following acts are pyramid schemes:
(1) The organizer or The operator, through the development personnel, requires the development personnel to develop other personnel to join, calculates and pays remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel directly or indirectly developed on a rolling basis, and seeks illegal benefits
(2) The organizer or operator, through developing personnel, requires the developed personnel to pay fees or pay fees in disguised form by subscribing for goods, etc., to obtain the qualifications to join or to develop other personnel to join, and to obtain illegal profits
(3) The organizer or operator, through development personnel, requires the developed personnel to develop other personnel to join, form an upline and downline relationship, and calculate and pay upline remuneration based on the sales performance of the downline, Seeking illegal profits.