What Toxic Practices Are Destroying Business Structures

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Ethical Issues in MLM:
Pyramid schemes masquerading as MLM

Pyramid schemes under the guise of multi-level marketing pose serious risks to the entire market. Unlike legitimate MLM companies, which focus on promoting real products or services and providing fair compensation to participants for real sales, pyramid schemes are entirely dependent on the continuous recruitment of new participants. The product line data or service in such companies is often absent or has a nominal value, and the income of older participants is formed solely by the investments of newcomers. Such schemes are unstable by nature, quickly reach a saturation point and inevitably collapse, causing colossal damage to the reputation of bona fide MLM companies and creating a negative image of the entire industry.

False claims and manipulation in recruitment

Companies often resort to dishonest methods to attract new distributors, promising unreasonably high and quick earnings without significant efforts. Such statements mislead potential participants, creating unrealistic expectations and leading to rapid disappointment after the first failures. Manipulation, emotional pressure and aggressive methods aimed at "squeezing" money out of participants only increase the negative effect, destroying trust within the structure and causing a mass outflow of partners. In the long term, this leads to critical consequences for the business - from loss of reputation to legal risks.