We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Matrix Scheme?

Diana Bocco
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A matrix scheme is a business model very similar to a pyramid scheme, in which people give money to be added to a waiting list. Sometimes people get a small token for their money, but the main attraction of this scheme is on waiting for a larger prize to be received at the end.

Once a person has signed on for a matrix scheme, his or her name is added to the bottom of a waiting list. As more people join in or new members are recruited, other names move up the list until they reach the top. The person at the top of the list receives a higher-priced item. Electronics such as computers or TV sets are common prices, but trips and cars are also a popular prize choice.

Most of the people who sign up for a matrix scheme never reach even the second level, as it eventually becomes impossible to recruit enough new members to keep the system going. Despite what promotes would like you to believe, the truth is that the token being sold is often overpriced. For example, the scheme may require you to buy an ebook for a price of $50 US Dollars (USD) in order to get into the system. Besides the fact that the item being sold is overpriced, the other problem is that 99 percent of the people entering a matrix scheme will never get anything except that original item.

While there are laws regarding matrix scheme operations as illegal, the Federal Trade Commission has warned consumers about the risks of participating in such processes. Over the years, many civil lawsuits have been brought up regarding matrix schemes. A good example is the Phones4Everyone matrix scheme. In it, people paid $35 USD for a cell phone signal booster and were then added to a list for a chance to obtain ipods and laptops. While there were about 18,000 members involved in the matrix, less than a handful of them ever got the promised free item.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Diana Bocco
By Diana Bocco
Diana Bocco, a versatile writer with a distinct voice, creates compelling long-form and short-form content for various businesses. With a data-focused approach and a talent for sharing engaging stories, Diana’s written work gets noticed and drives results.
Discussion Comments
By anon122532 — On Oct 28, 2010

Depends on the setup of the system. If the site is set up for the member to receive benefits first then earn commissions on referrals, then matrix works for everyone.

By anon19230 — On Oct 08, 2008

I do not agree with this article, though I only participate in very low level matrix systems ($2, $3, $12) and they are working. This is because we work them as a team and do not leave people "high and dry". Additionally, these matrix systems do not place anyone at the bottom ... this is because you are on top of your team and generating income each day. It is more of a gifting program than any other explanation - these are designed to make money quickly and to build a list of referrals for your main business module.

Diana Bocco
Diana Bocco
Diana Bocco, a versatile writer with a distinct voice, creates compelling long-form and short-form content for various...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.