What is a Ponzi Scheme?
Network marketing and MLM home businesses are the same thing. They're both companies that offer a product or service who instead of spending millions of dollars on marketing techniques such as commercials and billboards; use the more cost effective marketing method of word of mouth. Word of mouth is way more effective than other forms of marketing because of the conversion rate of customers. With word of mouth, the conversion rate is always 100% because the company only pays for that marketing after they get a customer. Whereas with commercials and billboards, the company pays first, and everyone who sees the ad will not become a customer. A Ponzi is a fraudulent investment operation that pays investors dividends from their own money or from money investors before them invested; rather than earnings from any actual profits. Ponzis generally offer really high returns on short-term investments. Simply put, they claim the opportunity to get rich quick with very little work. If a ponzi went on long enough eventually there would be no more money to pay people back. This is why some of these ponzis in MLM clothing never deliver their goods or services and disappear. So to sum it all up, ponzis recruit people and that's it. MLM's recruit people to advertise their product or service for them. As a reward, the recruited gets paid commissions based on how many referrals of the product or service they make. Click here to leave Ponzi Scheme and return to Legitimate Home Businesses
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