What makes an opportunity a pyramid scheme is when you have a price to join a network, and the object is to get others to buy in, and you get a piece of it. There usually consists of no products, or very low quality products. So basically most networking companies we hear about that make millions and millions of dollars each year are not considered a pyramid scheme.
So why do people call them pyramid schemes?
Most see a person at the top, and by bringing in people who also bring in people usually draws a pyramid when you put it on paper. But, if there is a product involved, and customers ordering the product, then it's not a pyramid scheme.
Some believe what makes an opportunity a pyramid scheme is where people who are on top make all the money, while the ones on bottom pay out. But in these opportunities everyone starts in the same place, right? So the ones on top, worked their way there.
A good example to me of a pyramid scheme is when an opportunity, or a job, has you in a position that no matter how hard you work, or how good you do, you can't advance to a better pay until someone dies, get's fired, retires, or quits. Of course then allowing only one person to take their place. So to me this is the way most major companies work, not network marketing opportunities. Network marketing opportunities allow a person who does well move up anytime they have earned it. You can always make more than the ones who joined before you, if you do more. So what really is the pyramid scheme here? Yea, a job!
Here is a little more input on my thoughts when someone says it's a pyramid scheme.
If you are a person already involved in network marketing, these ideas can be of good use. Anytime someone mentions to me the silly pyramid scheme excuse, I always ask them "What is your understanding of a pyramid scheme?" Of course the answer is mostly the exact same thing, so I can then tell them they have given a perfect description of a job. It really helps to make them understand. Remember that the reason they think that way in many cases is because that's all they have heard so far. Opening their eyes can be the turning point in them truly finding a way to make a good income. That's what networking is about anyway. Not about sales. It's all about helping others enjoy the benefits of it.