When multilevel direct selling becomes a pyramid scheme:
A) typical annual sales of products often double
B) the salespeople are no longer independent agents
C) little merchandise is sold to end users
D) the selling format is usually franchised
E) the use of the party plan becomes more commonplace

Question

Quizplus · Accepted Answer

A critical aspect of legitimate multilevel direct selling is that the salespeople generate revenue by selling products to end-users. If little merchandise is being sold to end-users and the primary focus is on recruiting more salespeople into the pyramid, then the scheme has become a pyramid scheme.

When Multilevel Direct Selling Becomes a Pyramid Scheme