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In Reply to: Re: Re: Primerica A Pyramid Scheme? hahaha ok posted by just an observer on February 19, 2004 at 11:33:24:
: Just a thought here.........MLM? Don't each downline charge more for products to make a profit? I'm sure that don't happen in Primerica......don't think the SEC and NASD would go for that.
No, that's not how MLM works at all. If it did work that way, then why would anyone at the bottom, when they could get the same product from someone higher in the "chain" for cheaper?
What does happen in MLM is everyone up the chain takes a cut of the profits. The people higher in the chain are making their money by receiving a cut from all of those in their downline. The products tend to be overpriced accross the board to allow for eveyone up the line to take their cut of the profit. The bigger your downline, the more money you make. However, once the downline grows to a certain size, it would not be possible for everyone to take a cut of the profit and still get some money. So a new "leg" has to be formed at that point. That's why recruting is essential to an MLM operation. The only way to advance up the chain where you can start making real money, is to build a downline so you have money coming in from several people.