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Network Marketing : As the name suggests , it is marketing through Networks. The profit earned is shared directly to the expanding network. Usually This type or marketing works well for initial market capturing and Brand Recognition. Not always the Network is limited by a pyramid or inverted triangular structure. For example the Famous Amway business model is a good example of Network Marketing which is not a pyramid based Network. Pyramid Schemes : As the name suggests its a scheme , engineered to make people spend money. The organizational structure is pyramid or inverted triangle style and mostly it is Binary in Nature. This is also a type of network marketing as here also the market is developed with the expansion of network , But only in one direction. The main difference between Pyramid scheme and Network Marketing is , here the focus is not on Brand Recognition or market capturing but they focus on joining people by reference. More often than not there are no product at all. Just fraudulent schemes to make people spend money. and once saturation is reached.. the top level executives just leave. The company collapses . This is also called as Ponzi Scheme.
Network marketing is a legitimate business. First, it's based on providing people with real, legitimate products they need and want at a fair price.
Pyramids are illegal and are based on taking advantage of people. For a person to actually make money in a pyramid scheme, someone else has to lose money. But in network marketing, each person can multiply his or her efforts, skills and talents by helping others be successful.
In my opinion its exactly the same.
Networking Marketing is a marketing strategy designed to promote their product by through distributors, offering multiple levels of compensation.
Pyramid schemes are, however, fraudulent schemes, disguising as an MLM strategy. The difference between a pyramid scheme and a lawful MLM program is that there is no real product that is sold in a pyramid scheme, and commissions are based only on the number of new individuals one introduces into the scheme.
Network Marketing is a legal business where you are selling a real product or service to people interested in it and you and the people in your upline earn through commissions. The system works on the grounds that people will always require your product or service.
Pyramid Scheme there is no real product/service involve and you only earn through bringing in new individuals into the system. Pyramid system is a fraud.
