as a commodity, Medco cosmetics will not be sold by pyramid schemes, but some units and individuals may use it for pyramid schemes. Whether it is a pyramid scheme or not should be judged according to its specific operation mode.

1. What is MLM

MLM refers to the behavior of organizers or operators to develop personnel, to seek illegal 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 to require the developed personnel to obtain the qualification to join on the condition of paying a certain fee, which disrupts the economic order and affects social stability.

II. Those behaviors belong to pyramid schemes

According to Article 7 of the Regulations on Prohibiting MLM in the State Council, the following behaviors belong to pyramid schemes:

1. The organizer or operator, through the development of personnel, asks the developed personnel to develop other personnel to join, and calculates and pays the remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel who have developed directly or indirectly, and seeks illegal benefits;

2. The organizer or business operator, through the development of personnel, demands the developed personnel to pay fees or pays fees in disguised form by subscribing for commodities, etc., so as to obtain the qualification to join or develop other personnel to join, and seek illegal benefits;

3. The organizer or business operator, through the development of personnel, requires the developed personnel to develop other personnel to join, forming an online and offline relationship, and calculating and paying online remuneration based on the sales performance of the offline, so as to seek illegal benefits.