pyramid selling

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A method of selling to the public using a hierarchy of part-time workers. Usually a central instigator (at the apex of the pyramid) sells a franchise to regional organizers for a certain product, together with an agreed quantity of the goods. These organizers recruit district distributors, who each take some of the stock and, in turn, recruit door-to-door salesmen, who take smaller proportions of the stock, which they attempt to sell. In some cases the last stage consists of people who sell the goods to their friends. As the central instigator can sell more goods by this means than are likely to be bought at the base of the pyramid, and someone on the way down is liable to be caught with unsaleable stock, the system is illegal in the UK.

Subjects: Business and Management.

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