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.

You can read the full article here.