Is there such thing, such as if you offer your members a wholesale shop to purchase from, so basically they're purchasing a membership to the wholesale club but then as well they get money for each member they refer. Is that entirely legal?
From what I remember pyramid schemes are illegal as long as the majority of the member's income comes through referring new members. I'm not absolutely sure on that though.
They don't get any income from other places, they are buying a membership to a wholesale club basically.
That would possibly be legal. This leans more towards an affiliate service for a legitmate company. Would the club actually provide information and advice? If it does, then you would be perfectly allowed to run such a thing. Just don't make a ponzi scheme (pay more than 100%/depending on constant influx of new members).
That sounds more like an affiliate program than a pyramid scheme. In the end they would be getting products to sell and make income.
We would market it that way to make it legal, but in the end the main goal of the program would be for us to make money off the "pyramid"
Sometimes posters claim that these schemes are completely legal, claiming they are mailing list or recipe services. These posters may even cite title 18, sections 1302, 1341, 1342, and 1343 of the "Postal Lottery Laws." These sections are part of the U.S. Code. I'm sure that none of these people have actually read them, because they do not authorize pyramid schemes. In fact, these are the very laws that make pyramid schemes illegal. (Take a minute to read 18 USC 1302, 1341, 1342, and 1343 for yourself.) They may also claim that their e-mails are legal under "S. 1618" or "H.R. 3113." These were bills in the U.S. Congress that failed to become law. They have no legal effect. Pyramid schemes have long been illegal when conducted by mail in the United States or Canada. The same laws apply to Internet chain letters if the mails are used at any point in the scheme.
In short you are planning a crime. Your posts on DP show your clear intent to violate the law. Your attempt to make a sham sale, to get around the law will be seen for exactly what it is. I would suggest spending your time on something better than an illegal scam. p.s. the thread title is an oxymoron, "legal pyramid scheme" is like "legal murder"; if either were legal it would not be a pyramid scheme or murder.
clear the OP doesn't know the difference between a pyramid scheme and pyramid structure that's found in many MLM schemes. He's not planning a crime - it's an affiliate structure that's all.
As long as they have some item or service that they are selling, then it is just an MLM affiliate program. Pryramids are only illegal if they are intended as a ponzi scam. MLM are completely different.
I don't think simply having an item or service for sale is sufficient. The sales have to be the primary source of income, and recruiting new members secondary. (And pyramids - meaning companies that base their income primarily on the recruitment of new members - are always illegal in the U.S. and will always eventually fail.)
The point is whenever there is a doubt then you should step back. Imagine if you make big bucks and then are sued by an unsatisfied member (and there are many in a pyramidal scheme) who suspects you have enriched yourself with the program ...
Exactly, it's the ponzi scams that are truly illegal. As long as he can keep paying them and he is selling a true product, then he should be able to have whatever affiliate structure that he choses. I also believe (Don't quote me on this) that they can only charge for fraud if fraud actually occurs. There was a famous autosurf (I think it was 12 X 12 daily) that ran for a long time as a blantant ponzi that was offering absurd interest rates. They were only able to prosecute when the program actually failed and cheated people out of their money. I also don't believe that it would be possible for him to differ between sales and recruitment of members, because the members would be buying his product in order to join.
It's not so much if they do get products to sell as it is do they make more money on the products or referrals. Cheers