Connect with us

Business

What Is The Difference Between A Pyramid Scheme & A Direct Sales Model?

What Is The Difference Between A Pyramid Scheme & A Direct Sales Model?

It can be difficult to differentiate a legitimate company with a pyramid scheme. For this reason, many consumers are doubtful about the direct sales method. The easiest way to determine the difference is through the products and services that are offered. Here are some ways to tell the difference so that you can avoid being scammed.

What Is The Difference Between A Pyramid Scheme & A Direct Sales Model?

Value of Product

Direct sales models offer products or services that have value on the marketplace. Many pyramid schemes lack products all together. They rely on you recruiting people into the organization to make money. Their gimmick is that you can make large amounts of money with very little effort. Selling products or services will take effort on your part. Be wary of any company that tells you it is extremely easy. If there is a product offered, check to make sure that it is something that has value. You should be able to search and determine if there is demand for the product being offered. A direct sales company often asks you to buy a sample of their product. This is so you can try the product out yourself. It also allows you to demonstrate the product to others, so that you can make a sale.

Recruitment Opportunities

A pyramid scheme relies on how many people you can recruit under you. You may be offered an incentive for the more people that you recruit. This is referred to as the headhunting method. There may not even be a product or service offered. With this scheme, a large up front deposit is requested to join the organization. Be careful of companies that require that you put down large amounts of money. This should be a red flag to you. It may not be exactly what it seems. Watch out for offers that seem too good to be true. A direct sales model rarely asks you to recruit others. They are more interested in you selling their products in order to build the customer base. This hierarchy model is common for pyramid schemes.

Encouragement to Buy Product

Companies that ask you to purchase large amounts of product aren’t legitimate. A true direct sales model will not make this request of you. The product that you are forced to purchase may not be worth very much. You may even find yourself struggling to find other people that are interested in buying it. Another red flag is that the company doesn’t allow you to return this unsold merchandise. This is called inventory loading. The pyramid scheme relies on this method to convince you that they are a legitimate money making model. There is often a lot of pressure for you to sign up immediately. A pyramid scheme doesn’t want you to take the time to reflect on their company. A direct sales model encourages you to do your research to make sure you are interested in working for them.

Relying on Confusion

Unlike ACN, pyramid schemes rely on confusion in order to generate funds. Pyramid schemes prey on feeding misinformation to people. They only make money when they find another victim for their scam. The best defense against this deceptive practice is to research the company. Having more information can allow you to ask questions. A direct sales company can answer your questions in a manner that makes sense. If something doesn’t sound right to you, it might be a scam. A pyramid scheme may give you the run around, and turn it back on you. There is a lot of confusing and misleading information posted on the internet. Check to make sure that there aren’t lots of complaints about a company. Use your resources to verify any company before you consider doing business with them.

Being an informed consumer can prevent you from falling trap to a scam. Use these items to determine the difference between a direct sales company and a pyramid scheme.

Continue Reading

Recent Posts

Finance2 days ago

Tips For Selecting Best Pre-settlement Funding Company

Are you trying to find one of the best pre-settlement funding companies, but you are not aware of the factors...

Business2 days ago

Wish to Ensure Improved Customer Experience? Use the Innovative Salesforce Customer 360 Data Manager

Salesforce, during the latest conference at Connections 2019, announced that it would be launching a service that would be dedicated...

General3 days ago

Building Your Website with WordPress Themes: Do’s and Don’ts

Why Opt For WordPress To Build Your Website? The first thing to know is what exactly WordPress development is. It...

Business4 days ago

Heralding the Next Phase of Advanced AI

With the advancements in tech gaining a new blazing-fast pace, the world has been changing more rapidly than ever in...

Business6 days ago

What Are the Different Wedding Photography Styles?

In wedding photography, the main focus is on the wedding couple. After all, the whole event revolves around these two...

Business6 days ago

7 Reasons Why You Need to Hire a Professional for Your Video Marketing Campaign

Benefits of Video Production Companies Did you know that companies using video content experience a 41% increase in traffic through...

Business1 week ago

Examining 5 Latest Trends in Packing Design

Businesses that don’t carefully plan their packaging design are setting themselves up for failure. All of the trends in packing...

Home Improvement1 week ago

5 Contractors Every Homeowner Should Have on Speed Dial

Being a homeowner or a landlord are particularly responsible tasks. There are many things that can go wrong but these...

Business1 week ago

How does Blockchain Help to Enhance Security for your Business?

Blockchain technology has been associated with cryptocurrencies for the most part. But it plays such an essential role in cybersecurity...

Comparium-Automated-Website-Testing-Tool-780x470 Comparium-Automated-Website-Testing-Tool-780x470
Tech1 week ago

Comparium : Automated Website Testing Tool

Nowadays, growing an online business is not an easy task due to the higher competitors available in the market. You...

Travel2 weeks ago

Seven Awesome Family-Friendly Places to Visit This 2020

Family trips should be an annual thing, don’t you agree? It’s during those moments that we make the best memories....

tungsten wedding tungsten wedding
Lifestyle3 weeks ago

How to choose the perfect tungsten wedding band

Rings are important for every wedding. That’s how they symbolize the promise that people make to stay together forever. You...

Sketching Techniques Sketching Techniques
Lifestyle3 weeks ago

10 Basic Sketching Techniques For Beginners

Lacking the gravitas as that of oil paints, pencil may not seem a showy artistic medium to many. However, if...

trends for retailers trends for retailers
Business3 weeks ago

2020 CRM Brings Must-Have Trends for Retailers

There is no end to customer’s expectations. If you are already providing a premium product, they will expect from you...

Experience of the Game-1 Experience of the Game-1
Tech3 weeks ago

FitGirl: Games for Re-repacking

So after you have a game’s introduction documents, you have numerous different parts that everyone probably won’t need. You’ll have...

Categories

Archives

Trending