Anyone participating in Amway, Tupperware or any other MLM business, please take note. By its own design, a system driven by the recruitment of new people into an ever-expanding marketing network, if perpetuated successfully, will lead to market saturation—with too many sellers peddling to too few buyers. If a pyramid scheme started by six people who each recruit another six people continues to grow in that fashion, the number of people involved at level 11 will exceed the population of the U.S. Level 13 would contain more than twice as many people as populate the Earth. Well-run franchise businesses, in contrast, limit “membership” to the club of sellers: imagine how much less valuable your McDonald’s franchise would be if the company allowed outlets on every block. Since MLMs use business models that seem unsustainable under the laws of mathematics and the principles of supply and demand, it’s no wonder the vast majority of participants—most statistics put this percentage well into the 90s—in recruitment-driven businesses end up walking away with a net financial loss. popsci/science/article/2013-09/did-i-participate-ponzi-scheme?src=SOC&dom=fb
Posted on: Mon, 09 Sep 2013 06:35:37 +0000