"Is this Pyramid Selling?"

What is Pyramid Selling? Since Pyramid selling started,it's definition has been corrupted by a Chinese whispers style of passing on information, to the point that it has become a mystery.

If people are not selling Pyramids from Egypt, what are they selling when they get into Pyramid Selling?
It seems they may not be actually selling anything.

To determine whether a program is a legitimate multi-level opportunity or an illegal pyramid scheme, the relative government department tests several factors.

The first and most important test is to take a look at the compensation plan.
Does it reward participants for:
a) Merely introducing others to the program ----------> SCAM Alert!!! Pyramid!
or
b) Are participants paid for selling products? ----------> Passes this test.

“From an anti-pyramid standpoint,the most important determination in legislation
is whether or not the money participants earn is contingent upon recruiting others into the program. Thus pyramids, endless chain schemes and chain letters are illegal”.

Numerous websites offer information. Government sites are honest because they actually write the legislation and decide what defines an illegal pyramid. The Attorney General’s website say that the answer had been made clear in 2002 when the Trade Practices Act 1974 was amended “in plain English” to make it more easy to understand and clarify the prohibition of pyramid selling.

What their site says is that a Pyramid Scheme pays people primarily for recruiting, rather than for building a business that sells products. However it also says that marketing schemes may offer incentives to their sales personnel for recruiting further sales personnel and that many party-plan schemes are legitimate schemes. The major point is that if a reward for recruiting is the major incentive to get people involved, it could be a pyramid.

The New Zealand Department of Consumer Affairs website has a great check-list that is easy to follow and makes identifying pyramids fairly simple. It also has a list of recently prosecuted schemes and others that have been warned by the New Zealand Commerce Commission as being illegal.

The site of the South Australian Office of Consumer Business Affairs clearly differentiates between MLM, where participants earn commissions from the sale of products, and pyramid selling, where the real focus in is earning money almost entirely by introducing other people into the scheme. Pyramid selling schemes often involve no product at all or 'gimmick' type products or services that do not generate regular income through repeat sales.

So now I understand the difference! and after studying, I realize that this new company that I consider to join is really a proper Network Marketing buiness and it may be a very good opportunity.