judging whether this company belongs to pyramid scheme depends on whether the operating mode of this company conforms to the definition of pyramid scheme in national laws. MLM refers to the way that organizers or operators develop personnel to obtain benefits by calculating and paying remuneration to the developed personnel based on the number of personnel or sales performance directly or indirectly developed by them, or requiring the developed personnel to obtain the qualification to join on the condition of paying a certain fee.

At present, most MLM companies have been repackaged, confusing legitimate direct sales with illegal MLM business models to build channels. Therefore, by correctly distinguishing between direct selling and pyramid selling, we can judge whether a company's business behavior belongs to pyramid selling.

There are essential differences between direct selling and pyramid selling:

1. Direct selling: taking goods directly from manufacturers and selling them directly to consumers.

MLM: an entry fee is required.

2. Direct selling: set up your own store, directly batch goods from the company and sell them to customers at one time.

MLM: you need to develop offline. It is necessary to constantly find collaborators and induce others to double their income under the guise of forming a team.

3. Direct selling: revenue is determined according to the number of products sold.

MLM: according to the number of people below and the business performance of these people, you can decide how much return you have.

4. Direct selling: You buy one-yuan goods with 1 yuan money.

MLM: In fact, to put it bluntly, you gave 1 yuan money, and he said he taught you how to earn 5 yuan. As a result, when you give him 1 yuan money, he will tell you to find ten idiots like you again.

Therefore, it should be clear whether the company's sales model belongs to direct selling or pyramid selling.