what is pyramid selling

Pyramid scheme - Wikipedia, the free encyclopedia


** Pyramid scheme **

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It has been suggested that /Ponzi scheme/ be merged into this article.
(Discuss) /Proposed since September 2015./

The unsustainable exponential progression of a classic pyramid scheme

A *pyramid scheme* is an unsustainable and often illegal business model
that involves promising participants payment or services, primarily for
enrolling other people into the scheme, rather than supplying any real
investment or sale of products or services to the public.

These types of schemes have existed for at least a century, some with
variations to hide their true nature. Some multilevel marketing plans have
also been classified as pyramid schemes
(Amway)^[1]^[/better source needed/].^[2]^[3]^[4]^[5]

Various forms of pyramid schemes are illegal in many countries including
the United States, Canada and numerous European and South American


· 1 Concept and basic models

· 1.1 The "Eight-Ball" model
· 1.2 Matrix schemes

· 2 Connection to multi-level marketing
· 3 Legality
· 4 Notable recent cases

· 4.1 Internet
· 4.2 Others

· 5 In popular culture
· 6 See also
· 7 References
· 8 External links

*Concept and basic models[edit]*

In a pyramid scheme, an organization compels individuals to make a payment
and join. In exchange, the organization promises its new members a share of
the money taken from every additional member that they recruit. The
directors of the organization (those at the top of the pyramid) also
receive a share of these payments. For the directors, the scheme is
potentially lucrative—whether or not they do any work, the
organization's membership has a strong incentive to continue recruiting and
funneling money to the top of the pyramid.

Such organizations seldom involve sales of products or services with

Source: en.wikipedia.org/wiki/Pyramid_scheme

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