Advantages and Disadvantages of Chain Marketing (Pyramid MLM) Schemes

Chain marketing is also known as pyramid schemes where one has to enroll others under his account to make a pyramid shaped structure and earn money. A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, often without any product or service being delivered. In some countries it’s also known as MLM (Multi Level marketing) schemes.

Whatever you may call these schemes, but they all follow the same concept where someone earns money by referring others to the scheme and few also earn pretty handsomely. But statistics have to say sometime else – more than 99% of people either loose their whole invested money or earn next to nothing. And that’s why multi level marketing schemes are now officially banned in countries like United States, Great Britain, France, Canada, Malaysia, Norway, Australia, New Zealand, Nepal, Sri Lanka and Iran.

There are several pyramid schemes working presently and few of them have got millions of members as well. Amway, Dewsoft, ModiCare are one of the biggest MLM schemes working since years, but are they worth investing your valuable and hard earned money? Let’s know.

How Chain Marketing Schemes Work

1. You join the MLM scheme by paying some amount of money
2. Next you have to spread the concept and make new members under your name
3. You keep adding members and you are paid a percentage of their joining fee
4. Few MLM schemes also offer commissions on their product sale
5. You keep adding new members and sell products…

Well, if you are planning to get into them as you have got too many contacts, think twice. Are you contacts going to trust you and pour their money into some unknown schemes? Can you invest a couple of hour everyday to convenience new members? And even if you manage, are you sure that your contacts are going to get their money back?

MLM schemes have been proved as a disadvantage for more than 99% of people where they loose their money. Today’s people believe more in reality than any easymoney making schemes. And if you try forcing them to join the company under your account, there is a chance of getting ignored them. Once they start ignoring you, you loose a member and a contact. You are in loss, boss!

Let’s talk about some positive factors now. I personally know few people who managed to earn handsome amount of money from these chain marketing systems. They got car, home, girl friend (yep, they come for money) and various other stuffs and this possibility came to them because they joined the schemes initially and as the result all members started joining either under their name or their member’s name (you getmoney if someone under you adds a member). If you work properly, these schemes have the capacity to get you money, even more than you can imagine an can also change your whole life style.

The disadvantages are that they become your main goal and you keep running behind people to make them join the scheme and this completely changes your personality. You keep asking your friends, relatives, family members and they start avoiding you, which is the gray side of MLM schemes. You get motivated by your senior members in such a way that you start working for these pyramid schemes dedicatedly and ignore all your studies, office work or other important stuffs. Here is a quote on chain marketing system, taken from Abhi’s blog :

Chain Marketing or MLM is not good way to earn money. Please stay away from it. It will ruin you, your friends and your country. Don’t become a victim. Protect other innocent people from chain marketing. Please don’t ruin your family and friends. Don’t even attend the chain marketing presentations and seminars.

There are advantages and disadvantages of MLM schemes, but it seems that the disadvantages are more than the advantages. If you need money, you can find jobs or even can make money online. Chain marketing schemes should get banned in India and other countries as well – they spoil the career of youth mass and leave them no where.