MLMjärjestelmissä

MLMjärjestelmissä, often referred to as Multi-Level Marketing (MLM) systems or pyramid schemes, are business structures where participants earn money not only from their own sales but also by recruiting new participants into the organization. The compensation plan is typically tiered, with individuals earning commissions on the sales made by those they have recruited, and often on the sales of those recruited by their recruits, and so on, down multiple levels.

The primary revenue source in a legitimate MLM is the sale of products or services to actual end consumers. However, critics often raise concerns that some MLM operations are disguised pyramid schemes. In a pyramid scheme, the focus is heavily on recruitment, with the majority of participants earning money primarily through recruiting new members, rather than through product sales. These schemes are unsustainable because they rely on an ever-increasing number of new recruits to pay earlier participants, eventually collapsing when recruitment slows.

Distinguishing between a legitimate MLM and a fraudulent pyramid scheme can be challenging. Key indicators of a potential pyramid scheme include a heavy emphasis on recruitment over product sales, high upfront costs for joining, pressure to purchase large amounts of inventory, and a lack of genuine retail sales to customers outside the network. Regulatory bodies in many countries monitor these structures to prevent consumer fraud.