Amway and Mary Kay are quasi legal pyramid schemes in most countries. The products are ancillary to the actual goal which is creating a recruiting mechanism to get people in with the lure of financial freedom. They would sell pencils for $50 a piece but that is less convincing then selling overpriced skincare and nutritional products. These companies are always stepping over the line but continue to partially get off the hook.

Herbalife had to pay $200 Million back to former distributors for scamming them. https://www.ftc.gov/news-events/press-releases/2017/01/ftc-sends-checks-nearly-350000-victims-herbalifes-multi-level

Vemma who is based here in Arizona and was a sponsor of the Phoenix Suns was fined $238 Million by the FTC for scamming. http://www.azcentral.com/story/money/business/consumers/2016/12/20/vemma-tempe-based-energy-drink-company-settles-feds/95667174/

Oftentimes the MLM companies not getting in trouble are following the same principles that these other companies are. They are making so much money they are able to get away and keep going and doing the same thing essentially. MLM companies are founded by scammers and ran by scammers.

You are right in saying that Amway and Mary Kay aren't ponzi schemes. I distinguish between Ponzi and Pyramid in the video more. But all in all I consider both mechanisms to be scams mainly because of the deceptive element.

Comparing the corporate model to an MLM isn't a fair apples to apples comparison. Yes it has a hierarchical structure but when you work for General Motors you aren't taking on much business risk besides driving to work. You are being paid a salary or a wage and not investing your money into anything.

With an MLM you are taking on the risk of a business owner in a system that is set up to make 99% of the distributors lose money to the company and they can kick distributors out at anytime and steal away their downlines. The distributors don't own any kind of business. They are just allowed to buy absurdly over priced products at a price that the same product would be sold retail in the normal market. In Webster v. Omnitrition it was shown that the price the distributors were buying the product for "wholesale" was actually higher than the retail price those same products were being put onto the open market for with a different label on them. This is very common in the industry. http://caselaw.findlaw.com/us-9th-circuit/1139924.html

It is more about selling the dream than any kind of actual product. The product is just a way to make it quasi legit much in the same way that Shitconnect has tried to do by having their own blockchain running but in reality we can see through the smoke and mirrors.