Recruiting phrase
What if an MLM pitch says it is not a pyramid scheme?
Also heard as: is it a pyramid scheme · this is not a pyramid · are MLMs pyramid schemes · legal not a pyramid
If you are being pressured right now: You can pause the conversation without debating the opportunity. Ask for written documents, take time away from the pitch, and decide later.
What to do next:
- Skip the label debate and ask how compensation is actually earned.
- Ask what share of pay comes from customers who are not participants.
- Ask what typical participants keep after expenses.
What the phrase usually means
The phrase may be used to reassure a prospective participant that the opportunity is legitimate.
The useful next step is to review the compensation plan, income disclosure, expense expectations, and customer-sales information.
Why it matters before joining
A label does not answer how a specific opportunity works for typical participants.
Written information is more useful than a verbal reassurance when money, purchases, recruiting, or relationships are involved.
Questions to ask in writing
Documents to request with your questions:
- The current income disclosure or earnings statement.
- The compensation plan or business plan.
- A full first-year and recurring expense list.
- The refund, cancellation, subscription, and inventory return rules.
You can ask to read these away from the pitch before paying, ordering product, joining a subscription, attending a paid event, or contacting friends.
- What percentage of compensation comes from retail sales to customers who are not participants?
- Can I earn meaningful net income without recruiting anyone?
- What do typical new participants keep after expenses?
What this does not prove
The phrase does not decide anything about the opportunity. It is a reason to return to written disclosures and public sources.
Related questions
- What should an MLM income disclosure show?
- Can you make money in an MLM without recruiting?
- Is network marketing the same as MLM?
Helpful next pages
Sources
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Regulator guidance
Multi-level Marketing Businesses and Pyramid Schemes
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Regulator guidance
Business Guidance Concerning Multi-Level Marketing