The woman in this story would almost certainly have lost the thousands of dollars she invested as a distributor. She would have spent more money and many hours trying to recruit new people into her downline. Ultimately, she would have given up, much poorer, but wiser. If you are looking for an opportunity that will allow you to work at home or be your own boss, you should be aware of the differences between a legitimate multi-level marketing company and an illegal pyramid scheme. A representative can earn commissions from sales that he or she makes, and also from sales made by other people he or she has recruited into the program.
Some companies call themselves multi-level marketing when they are really pyramid schemes.
They may market a product or service, but they teach their representatives to spend most of their time and effort recruiting new people to join the program. If the company focuses primarily on recruitment rather than sales, it is a pyramid scheme. Pyramid schemes are not only illegal, they are a waste of money and time. Because pyramid schemes rely on recruitment of new members to bring in money, the schemes inevitably collapse when the pool of potential recruits dries up. When the plan collapses, most people, except the few at the top of the pyramid, lose their money.