Difference between MLM and Pyramid scheme

The difference between an MLM and a pyramid scheme

The difference from a pyramid scheme is that a MLM system do not earn any commission without making a direct sale of product or service!

Explanation:
An MLM system consists of a network of distributors who purchase products from a company MLM and sell direct to customers.
The goods from company to customers through distributors, who earn commissions based on sales volume.
The money paid for products moving from customers to the company.
The main activity in an MLM is direct selling system and form of advertising is word of mouth advertising for products and MLM opportunity!
In MLM everybody wins, regardless of the position in MLM network (which resembles a pyramid, because ABOVE the top is the place for all MLM leaders).
Direct selling is a complex multidisciplinary, which sells products or services from person to person without a special location for sale, generally at the doorstep.
MLM (Multi-Level Marketing or Network Marketing) is a form of product distribution and service network through recommendation from person to person and direct sale without a permanent location.
MLM is a structure made up of people who send or recommend products and services from producer to consumer, from person to person by direct contact. Network marketing structure is made up of several sponsorship levels and lines. Fees are distributed by the company at every level, depending on the activity.

In a pyramid scheme does not sell anything! Commissions are earned based on enrollment of new members into the game on a charge.
The main activity in a pyramid scheme is recruiting people and form of advertising is false advertising promises to win!
In a pyramid scheme earns only the top levels!
Pyramid schemes (or financial pyramid games) are some illegal procedures earning virtual constructed as a pyramid or a pyramid structure in which layers (levels) of the pyramid are composed of people who pay a certain amount to entering the scheme.
The general rule of winning is very simple: people who can reach the top of the pyramid earn money entering the scheme only if a lot of people at the bottom.
Each person must pay an entrance fee, after which it is forced to recruit other people and they pay the entry fee.
The gain can be made of the amount of input tax people at the bottom.
Example of pyramid scheme: people comes with a fee of 2,290 euros for a fake product (a book of 100 Euro and promises of training, which can not participate unless you have recruited 3, 5 or 7 other people !)

Beware of pyramid!