I wondered about that as well, and had a look on Wikipedia. It sounds like there’s a fine line between multi-level marketing and pyramid schemes. The former is legal, the latter is not. The key distinctions seem to be that you can’t be required to purchase more product than you are likely to sell, and the bulk of the money can’t come from new members to support your own payments.

With Blue Chip Marketing they would stay on the legal side because you don’t actually have to invest anything. Companies pay all the recruitment fees, you simply take a cut of whoever gets referred. So it falls into the multi-level marketing scheme, because that model is sustainable as the investment comes from a separate third party, rather than new members.

Agree it still seems a bit dodgy, but I can get with both recruiters and employees these days being paid exorbitant recruitment fees, there is room to try and create a new model to cut out the middleman and reward the people that can build the biggest contact databases and refer the most people. So you’re being paid a cut for access to your rolodex.

In any event, I don’t think I’m going to be joining.

Geoff

I guess my big questions would be:

1. Will big brands will be comfortable with that kind of explicit rewarding of advocacy? Straight-up affiliate marketing has even been slow to catch on for big brand ecommerce stores, and this seems even slightly dirtier in comparison.

2. Will people compromise their recommendations to friends or acquaintances for a cut in the action, or over time will that kind of behaviour compromise your whuffie or reputation to such a degree that it becomes rare and marginalized.

If you ask that question then you can decide whether or not you want to get involved. It’s easier to justify the first two models, it’ll take a great piece of content to justify the third. Personally I’d reach for the pin.