http://www.r3global.com/blog/2011/01/26/pyramid-scheme-animation/

What eludes you is the fact that pyramid schemes are a form of FRAUD. They’re entirely unsustainable – the “revenue” is merely an internal transfer of money from later participants to earlier ones. One’s ability to succeed in such schemes depends on the ability to recruit other participants – a factor which will always result in greater than 99% of the participants at the bottom who will lose, noting that the recruitment process simply can’t go on forever. As already pointed out, pyramid schemes are illegal.

The geometric shape of a pyramid, a corporational structure – none of these things has anything to do with a pyramid scheme and the fundamental flaws of same. It doesn’t take a genius mind to figure this out…

Monavie Scam – is this our resident genius, Tom (you know, the one who spelt pyramid as “P-Y-R-A-M-I-D-E”)???

“The Best Investment I Ever Made” – Warren Buffet (of Network Marketing)

Now as the author has included absolutely no sources for any of what she wrote (what a surprise), I tried to verify that quote. I was only able to find references to it on other pro-MLM sites (what a surprise).

Can you source it, or can we assume it is just another MLM myth unquestionably parroted down the line to eternity? Hmmm, come to think of it, a parrot would make a good MonaVie sales rep: “Squawk! Equals 13 fruits! Squawk! Your job is a pyramid!”

The sales force in a traditional company does not pay to be in the sales force. The customers give the profits, and the whole reason for the business becomes making money through customers. This is what could be called COMMON SENSE, unlike a pyramid scheme where there are no real customers, you know, like MonaVie. You don’t pay your traditional job 200 bucks so that your CEO can make a commission because he is at the “top”. Until MonaVie has real customers, non-distributor customers and the juice sells in a non Jehovah’s Witness-like way, I won’t be conveinced it is like any other job.

Then she goes on to make some simplified generalizations that demonstrate that she has no knowledge of real world companies. Yes, the CEO almost always makes the most, but in many areas, like consulting sales, the reps can make more than the company’s top executives. When this happens, the company doesn’t fall apart. Also, the vice-president or someone else can take over the top position, as these structures are dynamic and there is usually opportunity for vertical movement based on performance.

The CEO usually does not “hold all the control”, but is constrained by company policy and boards of directors. The omnipotent corporate ruler she seems to base her example on is very rare and it is disingenuous to use it as the norm.

She is also being deceptive in the way she compares the hierarchy of a company with the levels in an MLM’s sales force. In the former we are talking about completely different tasks, skills, knowledge and responsibilities, in the latter it’s all the same job. MonaVie’s own corporate structure, with Dallin Larsen at the top, is not a part of the distributor pyramid – and if a rep made more than him, is it likely “the entire corporate model would crash”?

Basically her article does nothing to defend any particular MLM from the charge of being a pyramid scheme, and in no way convinces me that MonaVie isn’t a barely legal scam in which almost any new distributor is guaranteed to lose. Those at the bottom are paying the income of those at the top and the only way to succeed would be to get suckers under you to pay your income, i.e., a pyramid scheme.