I am curious whether it is effective or not, but pyramid/MLM is not something I'm worried about. Let's say the price schedule is well defined (and visible), and that people are paying money in exchange for goods, with various level of discount due to quantity and timeliness to encourage sales. In any case, from a good<->evil scale, I don't think what I suggested is even in the league of Zynga, Groupon, and Twitter promotion (tweet this for a chance...), let alone MLM scam. Whether it could be effective or not, that's my question.

To clarify this is what it would look like, using customer #10, #212 (if exists), and #1350 (if exists) as examples under different scenario

(1) #customers < 100

customer #10 pays $16

(2) 100 <= #customers < 1000

customer #10 pays $12, customer #212 pays $14

(3) 1000 < #customers

customer #10 pays $8, customer #212 pays $10, customer #1350 pays $12

The numbers are made up (the actual numbers may not make sense, so don't try to find flaw about total profit based on these numbers). So basically customers are rewarded for (1) being an early adopter, (2) propagating the viral effect, and (3) having good taste.

Now that I think about it some more, this is similar to Amie Street for indie music (didn't quite strike it big) http://en.wikipedia.org/wiki/Amie_Street

What do you think?

Except everyone knows what they're paying, with $x discount.