Characteristics of MLM: The ultimate rights and interests of most consumers and investors are not guaranteed.
Consumer behavior and business behavior are vague, and pyramid sellers use some "tricks". What I promoted to you in the early stage was investment and financial management behavior, and later you became a consumer unconsciously; Or promote consumer behavior, and later let you become an investor; Even citing vague concepts such as "consumption capitalization" makes you lost between investment and consumption. This will bring many difficulties to your legal rights protection (note: consumer behavior and investment business behavior are two different legal concepts, and the applicable laws are: Consumer Protection Law and Contract Law).
In the name of selling goods, providing services, investing in projects and other business activities, organizations and leaders require participants to obtain the qualification to join by paying fees or purchasing goods, services and investments.
In the MLM Prohibition Ordinance, the concept of hierarchical relationship has been repeatedly mentioned. The formation of hierarchical relations according to certain laws is only a phenomenon in many pyramid schemes, and it is only possible to be suspected of pyramid schemes if it is related to illegal possession of other people's property. For example, village-level community stores have five or six grades of goods, all of which are normal sales. Therefore, the object of pyramid selling infringement is complex, and pyramid selling is often accompanied by tax evasion and price gouging. Infringe on multiple social relations and legal objects; There must be two main object elements: 1. Fraud (infringement of citizens' property ownership); 2. Disturbing social management order and economic order.
The essence of pyramid selling
The sales goal of MLM is to be self-centered, buy the company's products by yourself, and extend this sales method to offline. In fact, offline is mainly based on their relatives and friends. This sales model is harmful to the interests of salespeople. It won't bring any reward to offline sales staff, on the contrary, it will cause losses, and you won't learn any sales technical experience in the process of selling to yourself. Only by selling products to others will skills be needed. Therefore, this method is not a normal job at all, but a trick to harm others and make huge profits for a few top internet companies.
The internal management of pyramid selling is paramilitary management, which has been highly organized and violent. MLM personnel violently resist the law or gather people to attack state organs. In Shaanxi, Beijing and other places, MLM personnel have attacked public security organs.
The essential difference between pyramid selling and direct selling is that direct selling belongs to commercial activities and business scope; Moreover, pyramid selling is a financial activity, not a fraud.