The Power of Deceit
“Pyramid schemes are illegal” says Aditi Jhaveri, Consumer Education Specialist with The Federal Trade Commission.
Despite criticism against pyramid schemes many companies have experienced abundant popularity in the last decade. Most internet users have noticed an influx of people luring potential candidates through social media to join “business opportunities” for a start-up fee and monthly purchasing commitments to maintain an active status within the company, these same companies provide high energy groups to maintain the momentum and the enthusiasm. But what is behind this business model that one must be skeptical about? Let start by how to identify red flags. The Federal Trade Commission provides two simple points that raise a red flag, these are: 1) Income is primarily based on recruitment not on sales 2) One is required to buy inventory even if the person does not need or want to. These are general markers that possibly indicate the “business opportunity” is a pyramid scheme.
Undeterred by clear warnings many people are still lured into “business opportunities” with false promises of lavish life styles and luxury cars. Robert Fitzpatrick, operator of the Pyramid Scheme Alert, warns against the potential detriments of such business models. Fitzpatrick states, “If you have to recruit–then the ones you recruit have to recruit. Now you’re in a chain letter. And on a chain letter, most people are going to lose. Most being 90 percent to 99 percent. Most people won’t make a net profit”
Lets step out and take the example of a relatively new company, Kyäni. This company has gain much popularity with recruiters constantly posting anecdotal wonders about the products they promote and their endeavors to attract people to buy into their team in any of their three different distributor plans. Through an interview with a Kyäni solicitor and some investigative internet searching I learned about these three business plans and prices, ranging from $160 to $1,250 US dollars. Most people join the $499 option along with the commitment to purchase $120PV/month, which can be done by purchasing one “Triangle of Health Pack”. This company attempts an exponential growth in multiples of three, that means they require their distributors to recruit three others and those three others must recruit three more and on and on the chain continues.
Lets think for a second, in multiples of three one will not get pass nineteen cycles before you surpass the world’s population, that means that at one point the company’s structure is meant to fail those at the bottom of the chain; it is simply an unsustainable business practice that empowers those at the top to remain at the top. I say this because, by the time the company reaches optimum the ones at the top would have made all the money precisely from those at the bottom. We do not have to see beyond simple mathematics to conclude that many claims made by recruiters or the company are simply not genuine. In my opinion, one can easily go from high energy groups to shattered dreams of unfulfilled entrepreneurship.
It is up to each individual to deliberate if involvement with these platforms is of any real financial benefit understanding that, in the case of Kyäni, Le-vel (Thrive), Herbalife, Advocare, and many other MLM companies the products themselves are not in any way revolutionary and in fact most of what the product contains could be purchase at a much competitive market value than what these companies sale it for. So next time you are approached by a pyramid recruiter think about the monetary and time investment you will be making, carry an introspective review of your own abilities as a sales representative and see if you are fit. Be skeptical about success stories, usually these are the exception not the rule. Most of all, never make claims that could hold you liable later on.
As a closing remark, I would like to say that in making this blog I am not intending to ruin anyones business but I am attempting to raise awareness to the truth behind these practices so people can make inform decisions when it comes to money. As always if you liked this blog leave your kudos, subscribe, and spread information by sharing it with others!
Mounir C. Cejin