Andy S. answered 09/08/20
Arts, Technology, and Humanities Tutor, Film & Music Teacher
There is a type of business called Multilevel marketing (MLM) which is sometimes called a Pyramid Scheme; it’s legal in the US but is very similar to a Ponzi scheme. Some very well known companies use this model! The business is set up so that associates earn money from sales, but also a share of the sales of those that they have recruited.
The ethical dilemma that these pose is that the user often has to purchase products (cosmetics, dietary supplements, food storage containers) in order to gain access to the marketplace. Since these businesses do not offer training or professional support, people who join often feel pressure to sell to family and friends instead of using sales leads. Many users fail to recoup their initial investment, and no user has the opportunity to rise as high as the creators in earnings or status.
While a multilevel marketing gig is not illegal like a Ponzi scheme, it may not be acceptable in terms of earning a living or maintaining social graces.