[ms] Literature Review on Multi-Level Marketing vs Pyramid System

Abstract

Multi-level sales marketing methods known as Multilevel Marketing (MLM) are gaining momentum for Malaysians. However, this business has been coupled with various issues that are closely related to the ethics and ethics of the parties involved. MLM is also faced with skepticism and confusion where users mistakenly fail to differentiate legitimate MLM business systems with the Pyramid system or money game so much that some of them equate both. Hence, this article aims to highlight past studies related to the MLM structure and concept and the Pyramid system. Literature analysis is made to find similarities and differences between MLM business systems and Pyramid systems. This study is qualitative by taking a literature review approach. The results show that there are various views from economists in which some analysts align the conventional MLM business concept with the Pyramid system as both are only concerned with the recruitment of downline activities to gain high profits. While some researchers clearly distinguish between these two marketing systems from the perspective of the structure and business concept, where MLM is a business based on the sale of the company’s products or services while the Pyramid system focuses more on just downline searches. The implication of another study needs to be done in detail on the structure and shape of the Shariah Compliant MLM as the business system is increasingly accepted by Muslims.