直銷= direct sale
Pyramid schemes quickly become unsustainable.
The main characteristic of a pyramid scheme is that participants only make money by recruiting more members. There are many different kinds of pyramid schemes, but the two most basic are product-based and so-called naked pyramid schemes.
In a naked pyramid scheme, no product is sold. Here's how it works:
naked pyramid schemes
- One person recruits 10 other people to participate in a "no-fail investment opportunity."
- The 10 recruits each pay the recruiter $100.
- The recruiter now tells them to go out and recruit 10 more people to do the same.
- If each recruit is successful, they'll all end up with $900 in profit from a $100 investment.
product-based pyramid schemes
- A distributor recruits 10 salespeople who each pay $500 for a starter kit of products to sell.
- The distributor gets 10 percent of each starter kit that's sold.
- The distributor also gets 10 percent of each product that any of his recruits sells, including more starter kits.
- The recruits are told that the fastest way to make money isn't by selling products, but by recruiting more people to buy starter kits.
- The people at the top of the pyramid get commissions from everyone in their downline, the many levels of recruits below them on the pyramid.