You might be familiar with illegal pyramid schemes of the type that Homer Simpson is almost taken in by:
However of more growing concern are legal Multi-Level Marketing schemes.
In a recent article, Dr. Máire O Sullivan, Lecturer in Marketing looks into these MLMs and the difference and similarity between the two – she notes that:
The difference with illegal pyramid schemes is that there is a product. But critics say that many MLMs have a business model that focuses on recruiting “downline” and getting new distributors to buy the product, rather than on actual sales to consumers, making them akin to pyramid schemes.