What are pyramid sales?
Pyramid sales are a system for marketing goods and services in which participants earn income by supplying goods and services to other participants, who, in turn, earn income by supplying these same goods and services to other participants.
Most pyramid sales, or multi-level marketing systems, are based on distributing goods and services but generally accord less importance to this activity than to progressively recruiting new participants who, in turn, bring in more recruits. Participants get discounts or rebates for recruiting new members and the resulting income grows as new generations of salespersons are added.
New participants are often recruited through meetings, whose main goal is to keep representatives motivated by alluding to the possibility of earning large amounts of money easily and quickly by selling goods and services but especially through commissions earned through the sale of representatives they have to recruit.