system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5:Why is multilevel marketing legal when it is clearly just a pyramid scheme?

I've had like four people try to get me to participate in ambit energy and I just cannot fathom how they are allowed to operate legally.
gpt
Because it isn't *just* a pyramid scheme. It's a pyramid scheme with just enough focus on the sale of a product to be legal.

The pyramid scheme is only the recruitment part, and if that was all that it was (getting paid to recruit people), then it would be an illegal pyramid scheme. But attaching a product to be sold (a la Amway, Herbalife, etc. etc.) then it can pose as a "legitimate" business. The focus of the business is to sell the product, but you also get a money for recruiting new people.

Nevermind that selling the product is almost impossible and the only likely way to recover losses is by creating additional dupes, as far as the law is concerned, as long as there is a product to sell, it's legal.