Pyramid scheme or not?

Chacha97

Hi I’m recently seeing friends on Facebook share a business and how they’ve become ‘partners’ for the company in which they offer nutritional products, I’m not sure if I’m allowed to name them but to me seems v similar to Herbalife. Anyone else know of them or if it is reputable? I’m more so worried that these people are getting involved in a pyramid scheme? Thanks

L1011

They're pyramid schemes. "Multi level marketing" is the new euphemism for it

Anything which goes beyond a single once-off referral payment for a new customer or tries to get you to actually recruit new *sellers* is a pyramid scheme. You'll always be given a story of someone who made a packet from it but the reality is most people never recruit the cost of their initial batch of product or whatever method they have for extracting cash.

Chacha97

Yeah I was thinking as much seeing a few people from my small town advertising how they be starting a business with them but can’t help but feel it could all go terribly

L1011 wrote: »

They're pyramid schemes. "Multi level marketing" is the new euphemism for it

Chacha97

Am I allowed post a link to Facebook page for others to decide or am I legally not allowed to do it?

L1011

People who actually think they're going to 'start a business' or be self-employed from it are the ones who get hurt the hardest usually - overbuy stock etc or start getting really, really desperate and pleading people to sign up as sellers.

Being the final seller down the line as a side income stream and if the product line is actually worthwhile isn't the worst way to make some small amount of money - Avon, Betterware, Ann Summers even - but the 'nutrition' ones are some of the most ridiculously aggressive I've seen

Chacha97 wrote: »

Am I allowed post a link to Facebook page for others to decide or am I legally not allowed to do it?

I'd really prefer if you didn't.

Chacha97

L1011 wrote: »

People who actually think they're going to 'start a business' or be self-employed from it are the ones who get hurt the hardest usually - overbuy stock etc or start getting really, really desperate and pleading people to sign up as sellers.

Being the final seller down the line as a side income stream and if the product line is actually worthwhile isn't the worst way to make some small amount of money - Avon, Betterware, Ann Summers even - but the 'nutrition' ones are some of the most ridiculously aggressive I've seen



I'd really prefer if you didn't.

I’d prefer if I didn’t as well so I won’t, just felt like have to try and get people wary of it some how because see lots of people on its fb page saying how excited they are to start the ‘journey’ etc and I can’t help but feel they don’t know what they are getting involved in

L1011

https://www.bbb.org/phoenix/news-events/consumer-tips/2015/03/opportunity-or-scam-multi-level-marketing-vs.-pyramid-schemes/

Red Flags of a Questionable MLM Opportunity:

Promises of high earnings, especially with little effort, time or serious commitment.

Requirement to purchase a large amount of inventory to start, with no written guarantee that unsold products will be bought back for a certain percentage of the original price.

https://www.thebalancesmb.com/business-is-an-mlm-scam-1794756

Plenty of other stuff online, dig around a bit and see what you can find. Some people are never going to be convinced its a bad idea until they are burnt by it unfortunately.

Chacha97

Yeah I know, seems to be relatively new so thought to try and get some word out! Thanks for all the info!!

Sleeper12

You can usually spot these schemes if you go to a meeting. They spend over an hour talking about the business model and barely mention the product itself.

I'm the real world the product is the important thing not the business model

Chacha97

Anonymous letter to the consumer Protection Commission?? Haha

cruizer101

The thing about some of these which are quite like pyramid schemes is they are kinda legitimate. Some of them you can make decent enough money out of if you work hard at but the sad truth is the majority of people who sign up are doing so because they think they are easy money and won't work hard at them.

Akrasia

cruizer101 wrote: »

The thing about some of these which are quite like pyramid schemes is they are kinda legitimate. Some of them you can make decent enough money out of if you work hard at but the sad truth is the majority of people who sign up are doing so because they think they are easy money and won't work hard at them.

Mathematically the only way you can make money from these schemes is by feeding off the income of people lower down on the ladder. People can make money but only if they get in early enough and are prepared to screw over enough friends and acquaintances along the way.

My parents got drawn into one of these when I was a kid. It ruined one of their longest standing friendships when the dust settled and they realised what they had been duped into investing in (in good faith at the time)

henryforde80

Yep Pyramid scheme. Usually like each other posts and they get certifications saying they get promoted and think it's a big achievement. U know the typical ones on Facebook saying "U okay Hun". "Congrats Hun, So proud of you."

It eventually crashes and burns for them when they realize that it will take a year to get back their initial investment which could just be a grand or just simply give up.

If they don't have to much money in it let them off as a hard lesson learned.

coylemj

I think when it comes to pyramid schemes, my attitude is the same as it is with regard to extended warranties - if people haven't gotten the message by now, they deserve to be fleeced.

Never give a sucker an even break

Phineas T. Barnum.

cruizer101

Akrasia wrote: »

Mathematically the only way you can make money from these schemes is by feeding off the income of people lower down on the ladder. People can make money but only if they get in early enough and are prepared to screw over enough friends and acquaintances along the way.

What you are describing is a pure pyramid scheme what the OP describes isn't.
There is no doubt it is similar but it is selling a product to an end consumer who isn't part of the scheme and so there is money coming in apart from the members.

I don't want to legitimize them too much, in general they are bad but there not quite a full pyramid scheme.

coylemj

cruizer101 wrote: »

What you are describing is a pure pyramid scheme what the OP describes isn't.

You might have missed this post ....

Chacha97 wrote: »

Yeah I was thinking as much seeing a few people from my small town advertising how they be starting a business with them but can’t help but feel it could all go terribly

If it quacks like a duck ....

CeilingFly

Chacha97 wrote: »

they offer nutritional products,

There's the key word - once you see "nutritional products" run away

lau1247