[anmorgan]

From my internet researching a while ago the main difference, and why MLMs are legal, is that an MLM sells a product, whereas a pyramid scheme sells people. That is, you can make money solely by acquiring more people who pay to be apart of it, in a pyramid scheme.

I'm still not sure how I feel about MLMs. If it's actually a good product maybe it's not a bad thing, but when it is not, that's where it seems to get sketchy.

[ff317]

Yes, but many/most nominal MLMs are effectively pyramid schemes in disguise. New entrants at the bottom rungs of the network are typically sold a "starter kit" by whomever one rung up the network recruited them. The starter kit is going to be some marketing materials and an initial inventory of product to sell. The marketing materials convince them they're getting a great deal on the wholesale value of the product and will make their money back in no time just by selling off the starter products (and then order/sell more and keep making more!), but the truth turns out to be that the upstream is banking on turning a mild profit selling the starter kit to the new member and doesn't care whether individuals ever buy the products, and the actual product doesn't sell very well to individuals because it's not a very good product. Then the only realistic way to make back the starter kit money is to sell more starter kits to another layer of idiots who think they'll be able to sell the worthless product, ad infinitum. In such a scheme there is a "product", but the vast majority of the product that's ever manufactured just changes hands through the starter-kit system between various levels of salespersons as a form of pyramid currency and almost no consumers end up buying it.