Bashny.Net
Pyramid schemes: a few facts about the world's fastest growing industry
Bashny.Net
On the fool does not need a knife ... If you have a friend on Facebook at the age from 18 to 60 years old, you probably regularly receive offers from "independent sellers' cosmetics, jewelry, essential oils and the like. These people - part of a huge scheme that works right now and that includes 10 million people in the US and 20 million worldwide, according to statistics on the companies multilevel marketing, or MLM.
The idea of these companies is very simple: they sell you some food, and you will then resells these products to their friends or relatives. In addition, you can earn more money if they will attract other sellers (your "subordinates") and will receive a percentage of their sales. At first glance, everything looks fine, but in fact similar schemes better get round.
1. They fool people Alwaysor currently MLM profits of 30 billion dollars a year. Still, none of the actual sellers involved in the scheme, does not earn serious money.
These schemes exist as much as there are direct sales. Traders long ago realized that a lot easier to earn money by selling part of the goods in bulk for those who then will take on all the hard work on their resale to final consumers. That is a direct marketing company, there are already thousands of years.
But finally, this business model was formed when in 1919 Charles Ponzi came with his famous scheme in which old investors were paid with money obtained from new investors. Finally in 1930 the company launched the Charles Renborg Nutrilite, which combines the philosophy of direct sales and a Ponzi scheme, thus creating a multi-level marketing.
One of the reasons that people are involved in it for decades - is recruitment methods used by MLM-companies.
The network business attracts people for whom it is important to a sense of community, of community, personal relationships are important. But if you suddenly decide to get out of this "business", all of these factors will be used against you. Users agree to lose their own money, if only to prevent the destruction of their friends and keep the whole structure is already created. Some families whose members were in MLM-company is so desperate that hire special people who help a relative to wrest from the clutches of the pyramid. Roughly the same thing happens in religious sects.
2. They are, as a rule, almost legalnyMezhdu pyramid and MLM a lot in common, although there are certain differences, so we use these terms almost interchangeably.
However, pyramid schemes are illegal in most countries, while MLM companies in many countries allowed. And all participants from the pyramids to the people who make the laws, still can not understand where the line between MLM-company and a pyramid scheme. The result is a lot of lawsuits.
Most recently, Herbalife has agreed to meet a class action lawsuit brought by her in the amount of $ 15 million, which voiced claims to the methods of its work, due to which the company has become very similar to a pyramid scheme. And even after the amount was paid, the Federal Trade Commission have stayed a number of questions to the leadership.
MLM-companies do not comply with generally accepted standards of accounting. So the recruiter of the question of the size of their earnings can call you any sort of figure. And this lie - part of the business model of MLM-companies.
Once the company reaches a saturation of the market in any one area, she appeared "daughter" of the company under a new brand, despite the fact that they often work the same people. For example, the company Nu Skin also known as IDN, Big Planet, Pharmanex and Photomax. And all of this is perfectly legal!
3. Some of them - indeed zloPolzuyas that the laws in the US and other countries regulate everything bad that is associated with MLM-companies, their management can do whatever they wish. And they do, as a rule, the bad things.
For example, in China, members of the group, engaged in saving people from the financial pyramids, were attacked, which was organized by the leaders of these criminal schemes.
In Albania, two-thirds of the population have invested their money in a pyramid scheme running Ponzi, which appeared with the tacit consent of the government. In 1997, this led to riots, after which people lost all their money.
And in the US are truly scary MLM-companies.
By Amway because of the incredible dedication of its members and pravohristianskoy direction is called differently by the sect to "private political army." Of course, political and religious views is not yet a crime, but slander of competitors - is undoubtedly yes.
Over the past two decades, some Amway distributors spread rumors persist that the company Proctor & Gamble is satanic, simply because Proctor & Gamble sells a lot of competing products. All this culminated in 2007, when Proctor & Gamble received compensation in the amount of 19, 25 million dollars for loss of business, which resulted in such rumors.
And remember, as in the past, all were worried because of the Ebola virus? Tweets sellers essential oils, working in two MLM-companies, doTERRA and Young Living, says that their oil can help in "treating the symptoms of Ebola." And although later these companies had the sense to say that they never said anything like that, another MLM-company, Natural Solutions Foundation, has supported their initial statement, and said that the products of the two companies "to effectively kill the Ebola virus».
4. Saturation of the market faster than you dumaete
In the 80 years the actress Heather Locklear was selling Faberge Organics shampoo and urged all to try it. And then tell two friends, so they can tell two friends, "and so on and so on and so forth." The idea was to gradually everyone in the world started using this amazing shampoo.
Soon, in one place there is a lot of people selling the same thing.
Even if you live in a relatively large city, it will take a little time, this city will be flooded with people selling your product. Price it is not determined by you - so you can not offer him discounts, that would turn it into a competition to normal business and, therefore, you have to play all on equal terms.
And to win in this game, no one can, because ...
5. No zarabatyvaetDavayte wager. If you can make money in any MLM-company, I'll give you $ 100. If you get a loss, the $ 100 you give me. You know how much money I will have in a year, according to one government report? 9800 dollars.
Because by the time the 99 of you will pay me, and I will need to pay only one of you. According to the report, even in gambling probability of profit is higher than when the scheme MLM.
Of all sellers Herbalife 99 companies, 92% are losing their money. Even after they finally came out of the game, they still had a huge amount of unsold goods. But the company refused to take the goods back.
So please note the errors of those who are already obzhёgsya.
via www.cracked.com/blog/5-reason-pyramid-schemes-are-even-worse-than-you-thought/
The idea of these companies is very simple: they sell you some food, and you will then resells these products to their friends or relatives. In addition, you can earn more money if they will attract other sellers (your "subordinates") and will receive a percentage of their sales. At first glance, everything looks fine, but in fact similar schemes better get round.
1. They fool people Alwaysor currently MLM profits of 30 billion dollars a year. Still, none of the actual sellers involved in the scheme, does not earn serious money.
These schemes exist as much as there are direct sales. Traders long ago realized that a lot easier to earn money by selling part of the goods in bulk for those who then will take on all the hard work on their resale to final consumers. That is a direct marketing company, there are already thousands of years.
But finally, this business model was formed when in 1919 Charles Ponzi came with his famous scheme in which old investors were paid with money obtained from new investors. Finally in 1930 the company launched the Charles Renborg Nutrilite, which combines the philosophy of direct sales and a Ponzi scheme, thus creating a multi-level marketing.
One of the reasons that people are involved in it for decades - is recruitment methods used by MLM-companies.
The network business attracts people for whom it is important to a sense of community, of community, personal relationships are important. But if you suddenly decide to get out of this "business", all of these factors will be used against you. Users agree to lose their own money, if only to prevent the destruction of their friends and keep the whole structure is already created. Some families whose members were in MLM-company is so desperate that hire special people who help a relative to wrest from the clutches of the pyramid. Roughly the same thing happens in religious sects.
2. They are, as a rule, almost legalnyMezhdu pyramid and MLM a lot in common, although there are certain differences, so we use these terms almost interchangeably.
However, pyramid schemes are illegal in most countries, while MLM companies in many countries allowed. And all participants from the pyramids to the people who make the laws, still can not understand where the line between MLM-company and a pyramid scheme. The result is a lot of lawsuits.
Most recently, Herbalife has agreed to meet a class action lawsuit brought by her in the amount of $ 15 million, which voiced claims to the methods of its work, due to which the company has become very similar to a pyramid scheme. And even after the amount was paid, the Federal Trade Commission have stayed a number of questions to the leadership.
MLM-companies do not comply with generally accepted standards of accounting. So the recruiter of the question of the size of their earnings can call you any sort of figure. And this lie - part of the business model of MLM-companies.
Once the company reaches a saturation of the market in any one area, she appeared "daughter" of the company under a new brand, despite the fact that they often work the same people. For example, the company Nu Skin also known as IDN, Big Planet, Pharmanex and Photomax. And all of this is perfectly legal!
3. Some of them - indeed zloPolzuyas that the laws in the US and other countries regulate everything bad that is associated with MLM-companies, their management can do whatever they wish. And they do, as a rule, the bad things.
For example, in China, members of the group, engaged in saving people from the financial pyramids, were attacked, which was organized by the leaders of these criminal schemes.
In Albania, two-thirds of the population have invested their money in a pyramid scheme running Ponzi, which appeared with the tacit consent of the government. In 1997, this led to riots, after which people lost all their money.
And in the US are truly scary MLM-companies.
By Amway because of the incredible dedication of its members and pravohristianskoy direction is called differently by the sect to "private political army." Of course, political and religious views is not yet a crime, but slander of competitors - is undoubtedly yes.
Over the past two decades, some Amway distributors spread rumors persist that the company Proctor & Gamble is satanic, simply because Proctor & Gamble sells a lot of competing products. All this culminated in 2007, when Proctor & Gamble received compensation in the amount of 19, 25 million dollars for loss of business, which resulted in such rumors.
And remember, as in the past, all were worried because of the Ebola virus? Tweets sellers essential oils, working in two MLM-companies, doTERRA and Young Living, says that their oil can help in "treating the symptoms of Ebola." And although later these companies had the sense to say that they never said anything like that, another MLM-company, Natural Solutions Foundation, has supported their initial statement, and said that the products of the two companies "to effectively kill the Ebola virus».
4. Saturation of the market faster than you dumaete
In the 80 years the actress Heather Locklear was selling Faberge Organics shampoo and urged all to try it. And then tell two friends, so they can tell two friends, "and so on and so on and so forth." The idea was to gradually everyone in the world started using this amazing shampoo.
Soon, in one place there is a lot of people selling the same thing.
Even if you live in a relatively large city, it will take a little time, this city will be flooded with people selling your product. Price it is not determined by you - so you can not offer him discounts, that would turn it into a competition to normal business and, therefore, you have to play all on equal terms.
And to win in this game, no one can, because ...
5. No zarabatyvaetDavayte wager. If you can make money in any MLM-company, I'll give you $ 100. If you get a loss, the $ 100 you give me. You know how much money I will have in a year, according to one government report? 9800 dollars.
Because by the time the 99 of you will pay me, and I will need to pay only one of you. According to the report, even in gambling probability of profit is higher than when the scheme MLM.
Of all sellers Herbalife 99 companies, 92% are losing their money. Even after they finally came out of the game, they still had a huge amount of unsold goods. But the company refused to take the goods back.
So please note the errors of those who are already obzhёgsya.
via www.cracked.com/blog/5-reason-pyramid-schemes-are-even-worse-than-you-thought/
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