PW’s Definition Of The Day:

Perhaps I’m just making up my own definitions, but I consider “pyramid scheme” to be the umbrella term for all of these types of scams. Endless chains and Ponzi schemes, and MLM, would be types of pyramids, due to the shape of the structure that creates a financial return for the one, or few, at the top.

PW’s Distinction Of The Day:

The biggest difference between a pyramid scheme and a traditional business is, of course, the flow of money. In a traditional business, the flow is two-way (up and down) through the structure. In a pyramid, the flow is one-way (up to the top).

PW’s Recommendation Of The Day:

So whenever MLMers likens their businesses to businesses like IBM, Microsoft, McDonald’s or whatever, you have a basic distinction to throw back at ’em: the flow of money. (Remember to pose it as a question so that they have to go look it up somewhere.)