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Multi-level Marketing/Pyramid Schemes

56,474 Views | 297 Replies | Last: 6 yr ago by IrishTxAggie
double aught
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AG
quote:
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This thread is enjoyable. I see Thrive a lot too. Terribly annoying.
My friend has been trying to see me Thrive. This may sound like a stupid question, but is that a total pyramid scheme too? I'm super skeptical.
No, Thrive pays a referral fee if you use the link they post. So, basically its for free groceries... We use Thrive, but there is no Pyramid to it, its just a delivery service and that's how they are marketing on social media.
There must be two different Thrives then. The one I'm referring to is a bunch of supplements that according to them give you unlimited energy and make you feel like a million bucks. I'm pretty sure it's MLM. The people that are in on it go on and on about how awesome their lives are now that they're "thriving".
lawless89
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plexus
advocare
it works
kyani
world ventures

I hate them all.

Had a good friend in college that went all in on world ventures. He would constantly be inviting anyone and everyone over to his house to hangout and then all of the sudden flip on the tv and show this presentation about world ventures and how it would make you rich.

I think he got up to making about 40k (not bad for a 21 year old), but I've since lost touch with him and pretty much all of his friends decided to stop hanging out with him.

Sad deal honestly that someone like that would fall for a MLM. He was some sort of space engineer degree at A&M and dropped out for world ventures.


Also what I don't get is how these things supposedly fix ALL of your medical issues. Need to lose weight? Drink plexus. Need to gain weight? Drink plexus.
I mean really?? Frustrates the crap out of me at how stupid people are...and unfortunately I'm related to some of them.
Motis B Totis
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AG
Thrive is a pyramid scheme. If you recruit two people to subscribe monthly you get your products free. If you recruit "promoters" that bring in sales you get a car payment and trips to Cabo.

Bitter Old Man
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Holy crap, you are right.... I'm not talking about that Thrive. I'm talking about Thrive Market......... Totally different. I didn't know that one existed, but it does look like a pyramid....
P.C. Principal
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quote:
Holy crap, you are right.... I'm not talking about that Thrive. I'm talking about Thrive Market......... Totally different. I didn't know that one existed, but it does look like a pyramid....
Yeah I was talking about Thrive by Le-Vel. Nutrition supplements or something.
P.C. Principal
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quote:
plexus
advocare
it works
kyani
world ventures

I hate them all.

Had a good friend in college that went all in on world ventures. He would constantly be inviting anyone and everyone over to his house to hangout and then all of the sudden flip on the tv and show this presentation about world ventures and how it would make you rich.

I think he got up to making about 40k (not bad for a 21 year old), but I've since lost touch with him and pretty much all of his friends decided to stop hanging out with him.

Sad deal honestly that someone like that would fall for a MLM. He was some sort of space engineer degree at A&M and dropped out for world ventures.
I once went on a Tinder date with a girl who took me to a world ventures presentation. Had no idea what it was at first but I left pretty quickly. I guess some people do make money doing that stuff but it definitely sounded like seelling your soul
BustUpAChiffarobe
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AG
people actually use Tinder?
Cancelled
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AG
I lump these MLMs, timeshares and get rich quick real estate schemes all into the same category: taking advantage of idiots.

I see this stuff hitting my clients a lot. I have many people come into my firm trying to get out of timeshares or those vacation rental things. It's just so asinine. These people are paying $850 or more per month for this crap. For that amount, I can take at least 4 or 5 decent vacations with my whole family. I can't believe people fall for the hard sale and inspirational videos. If it wasn't so sad, it would be pretty funny.

I had a client "fire" me because I warned him about an MLM.



diehard03
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quote:
taking advantage of idiots.

And yet, get that powerball above a certain number and even those with college degrees line up for their tickets...at 290M to 1 odds.

I think idiots is a bit harsh. I could do without their arrogance...but people are buying hope, and some are in desperate situations. Some haven't shown an ounce of ambition until they got involved in one.
MosesHallEnforcer
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quote:
I think the most predatory sales pitch I ever went to was cleverly marketed as a "Day of Power" or something like that. I had gotten free tickets to a "convention" at the Toyota Center which featured speakers such as Colin Powell, Rudy Guiliani, Sarah Palin, Mike Ditka, and a few other presentations I'd never heard of. The first couple of speakers were good, and it was all very red blooded, rah-rah America, stuff. The lady who put the conference on (with her husband) gave a moving testimony about how she was a crack addict, and on the street, but through her faith in God and the American dream was now a millionaire.

THEN the sales pitches started. $12,000 for trading software which heavily intimated 80% monthly gains and 7 figure annual income. They kept interspersing random bits of Christian or Patriotic sound bites; which were so blatantly obvious but the crowd ate it up. There were people weeping as one of the presenters gave away his pamphlet on how to make millions flipping houses to a disabled vet, and a single mother. They all used the line "Could I have kept this information to myself and made a billion dollars? Yes, but my master isn't of this world, and I am my brother's keeper; so for only $4,999 you can buy this dvd series on how selling blown glass trinkets in your spare time will make you a millionaire".

The saddest part were the very genuine, very gullible low-education masses with their "United We Stand" Shirts giving away all of their savings to the guys on the stage. I was really surprised that Colin Powell, Palin, and others had gotten roped into it.

EDIT: Found an article about it, the "Get Motivated" Seminar series

http://usatoday30.usatoday.com/money/media/2010-09-28-getmotivated28_ST_N.htm

I went to the "Day of Power" bull**** in Phoenix in 2010. The company I was working for at the time got all these "free tickets" to the even. I was excited about it because of the high profile speakers until the bait and switch happened. It was funny though they had these booths all around the stadium to sign up for this or that. And literally people were running to get in line for these things to sign up. I am pretty sure the people running to the booths during the break were planted for social proof.
Cancelled
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AG
quote:
quote:
taking advantage of idiots.

And yet, get that powerball above a certain number and even those with college degrees line up for their tickets...at 290M to 1 odds.

I think idiots is a bit harsh. I could do without their arrogance...but people are buying hope, and some are in desperate situations. Some haven't shown an ounce of ambition until they got involved in one.


My thoughts:

1. $2.00 on powerball =\ $5000 flushed down the toilet on agent rich quick scheme

2. If they want to buy hope, take that $$$ and get an education. Go to state trade school and learn something like HVAC that can make you independent and/or rich.

3. An non-idiot would ask themselves: 1. if this product is so wonderful, then why don't they market it and sell it in stores, 2. Why do I have to pay to sell this product (e.g., seminars, brochures, etc) and 3. Why am I as the vendor encouraged to also purchase the product - this rarely happens in legitimate business, employee discounts aside.
diehard03
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my point is that we all get a little ahead of our skiis sometimes and make bad decisions. I don't find some of the people that are conned by MLM's to be as bad as the MLMs themselves.

I dont really want to sidetrack here.
Ulrich
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It makes a certain amount of sense for someone who makes good money to buy a lottery ticket every once in a while. Yeah, the mathematical expected value on every ticket is below 0, but the asymmetry is huge. The cost of one ticket will not impact your life in any way: practically speaking, the cost is 0. The lottery prize (for someone of reasonable intelligence and self-control and an income within several standard deviations of average) means you can retire immediately and live a more luxurious life than you had ever dreamed of: practically speaking, the payout is infinite. That said, I have never bought a lottery ticket and don't plan to.

It hurts you when you buy tickets routinely enough that you could have legitimately used that money for something else. Buying a ticket every morning before work costs $500 a year. For someone who doesn't make much money, that matters. Now that the ticket comes with a real cost, the math matters, and it says that the (almost) infinitely small probability of winning outweighs the (almost) infinite payout.
TXTransplant
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I absolutely HATE the way these scams prey on women, particularly SAH moms and single moms. I am a member of an international single mom group, and you would not believe how many women promote their "six-figure" incomes from MLMs. I just want to scream at the top of my lungs that this is a short-term solution. I know so many women who have been sucked in only to do really well at the start and then end up losing money after a year or so.

I read a stat not too long ago...and I think I read it on one of these forums...that over 90% of women who make >$100k do so through MLMs. As a woman who has a graduate degree in engineering, that really disappoints me.

I wanted to see if I could verify this stat, so I did a Google search tonight for "women who make six figures." The very first result is a website called momsmakingsixfigures.com. The website has a lot of very vague information and big promises, and I'm almost certain it's an MLM for selling "non-toxic" household cleaning products (ugh...let's use scare science to sell people over-priced crap).

There are a bunch of profiles of women who claim to be doctors, pharmacists, lawyers, etc who quit their demanding, stressful jobs because they just couldn't manage the responsibilities of work and having kids, only to join this group and make more money than ever before by working 20 hours a week from home. I just can't even.
AngryAG
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Team National is another.
bmks270
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AG
These are primarily sold as free seminars, but the seminar is really a well designed hypnosis and psychological persuasion triggers by expert con men. Then the attendees believe they will get rich and will do and pay whatever is asked.

When I was like 18 my parents took me to some 2 day $300 market and options course, but by the end of it they were up selling these $5,000 trading classes and even like $20,000 multi class packages with "1 year personal mentorship" and all this stuff. And at the end of day 1 they asked people that night to call their credit card company and raise their limit.... "You take 2 more of our classes for $10,000 you will be a trading millionaire!"

Last day the guy has people standing who were signing up for these $5,000 classes, it was crazy.

Now, the info in the 2 days on stocks and options was pretty good intro for a novice and probably worth the cost for the 2 days to have an instructor there but it was a mass hypnosis con sales pitch at the same time.

I have seen this type of sales tactics quite a bit, free information and seminars or whatever underlying rope a dope sales pitch.

There is some percentage of the population that is just hypnotized by these sales men and fall for it. I do believe it really is some form of hypnosis, the rah rah feel good speeches.

The people who do well in these pyramid schemes are the cons who organize these free seminars, get a room at a hotel of 30 gullible people with some flyers, radio ads, whatever, then can hypnotize their audience and get them all.to sign up, then they just travel around a few cities doing this. Thst is how you make money. Give free seminars target at gullible people, tell them your product will make their dreams come true, go to next town and repeat.



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moses1084ever
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AG
My parents tried talking my wife into Rodan and Fields, I promptly shut down that conversation. They got suckered into Melaleuca back in the day. I still remember having to use the shampoo... f'ng terrible.

quote:
Iraqi Dinars

Yes, people are THAT dumb

This is amusing. What do you think all those emerging market funds in your 401k are comprised of? Currencies, stocks, and bonds from sh****y countries.

My freshman roommate ran a "MLM" from the dorm room... the old "want to make 25$ a day?" in the classifieds.
Hoyt Ag
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AG
quote:
I read a stat not too long ago...and I think I read it on one of these forums...that over 90% of women who make >$100k do so through MLMs. As a woman who has a graduate degree in engineering, that really disappoints me.
I'm having a hard time believing this. Not an attack on you, the stat itself. I know quite a few women that make over 100K a year, but it might be that the majority of people I know are either in medicine or engineers that have done very well in their respective careers. If the stat is true, that is disappointing.
ATM9000
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AG
quote:

quote:
Iraqi Dinars

Yes, people are THAT dumb

This is amusing. What do you think all those emerging market funds in your 401k are comprised of? Currencies, stocks, and bonds from sh****y countries.


A diversified set of them and not ones attained for 20-50% mark ups over retail exchange rates.
TXTransplant
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quote:
quote:
I read a stat not too long ago...and I think I read it on one of these forums...that over 90% of women who make >$100k do so through MLMs. As a woman who has a graduate degree in engineering, that really disappoints me.
I'm having a hard time believing this. Not an attack on you, the stat itself. I know quite a few women that make over 100K a year, but it might be that the majority of people I know are either in medicine or engineers that have done very well in their respective careers. If the stat is true, that is disappointing.


Oh, no offense taken. I don't want to believe it either, but my circle of successful/high-earning women also includes a lot of engineers, doctors, lawyers, etc., so I'm not seeing a broad cross-section. That's why I tried to do a search last night to verify...and the first hit was MLM garbage.

I was counting in my head all of the MLMs that women I've known have gotten sucked into...Jamberry, Pampered Chef, Mary Kay, Southern Living at Home, Wildtree, another convenience/prepackaged food one that I can't remember the name of, Younique, Tyra Beauty, Stella and Dot, two other jewelry ones that I can't remember the names of, Rodan and Fields, Plexus, various essential oils, Beachbody/Shakeology, 31 Bags (or something like that), Scentsy, one or two that sell clothing, and I'm sure there are more that I'm not remembering right now
MAS444
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Back when I first got out of law school I handled a bunch of MLM cases for my boss at the time. We represented a bunch of distributors (or whatever they were called) that believe they were screwed by higher ups. The Amway case which I did most of the work on eventually went up to the 5th Circuit on Amway's BS retroactive arbitration clause. That case ultimately settled for decent money (I think...I was gone by then). We tried a case against Melaleuca for 2 weeks and lost (I believe our folks were screwed around...but they really couldn't prove it). And there were several others... The psychology of it all was very fascinating.
aggiesq
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AG
quote:
My parents tried talking my wife into Rodan and Fields, I promptly shut down that conversation. They got suckered into Melaleuca back in the day. I still remember having to use the shampoo... f'ng terrible.

quote:
Iraqi Dinars

Yes, people are THAT dumb

This is amusing. What do you think all those emerging market funds in your 401k are comprised of? Currencies, stocks, and bonds from sh****y countries.


check out the iraqi dinar scam in particular. this isnt the same as emerging market funds.
The Fife
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The amount of junk science associated with MLM crap is astounding. We're going to have our first in under 4 months and it blows my mind how many other stay at home types we know where the wife has been suckered into this crap, and I could our blessings that she can see through it and I won't have to start hearing about it at home.

I don't know if the stay at home mom group has more free time to fall for junk science since they aren't busy at work all day or if maybe people in general are more gullible than I thought maybe? It makes no sense to me.
Bitter Old Man
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The amount of junk science associated with MLM crap is astounding. We're going to have our first in under 4 months and it blows my mind how many other stay at home types we know where the wife has been suckered into this crap, and I could our blessings that she can see through it and I won't have to start hearing about it at home.

I don't know if the stay at home mom group has more free time to fall for junk science since they aren't busy at work all day or if maybe people in general are more gullible than I thought maybe? It makes no sense to me.
I think you may be being a little over-pessimistic here. The fact is that many of these products actually work. Rodan and Fields products work pretty well. Now, the long term effects of them may be up for debate and I'm betting there are some negative effects. The JuicePlus, etc are just vitamin supplements. Vitamins are important and the fact is that most Americans don't get the vitamins they need from the crap food we eat. Naturally, when you take vitamins you feel better and are healthier. Of course, you could probably go pick up a bottle of Centrum at HEB and get the same effects. Essential Oils do have some beneficial properties, and they are used all the time in traditional retail products. The rest of MLM's is packaging and pricing.

The term "Wives Tale" is a real term and it came from somewhere. They talk about stuff and if there is some anecdotal evidence that might fix a problem they are having, they will try it.
Bitter Old Man
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AG
The real problem with MLM's is that there are a few people in them who do make crazy money. I know one who is at the top of one of them, and she DOES make crazy money and lives in a $2 Million house, and her husband quit his job to stay home. So, they tout these few people to these SAHM's who are college educated and have insecurities about not making money. Then the beauty products prey on their physical insecurities about getting older, and its a perfect storm.
TXTransplant
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The real problem with MLM's is that there are a few people in them who do make crazy money. I know one who is at the top of one of them, and she DOES make crazy money and lives in a $2 Million house, and her husband quit his job to stay home. So, they tout these few people to these SAHM's who are college educated and have insecurities about not making money. Then the beauty products prey on their physical insecurities about getting older, and its a perfect storm.


This. And I'd bet my house that someone who is this successful with an MLM did a lot more than work from home 20 hours a week.

There are also social and competitive aspects to these cults. A lot of these women plan their social time around these "parties." So many of them are selling, that they all feel like they have to buy from each other to be "supportive." They don't realize what they are actually doing is cannibalizing each others' savings accounts.

Unless you have an extensive sales network that reaches long distances, there are only so many people in the 'hood who are going to buy all this stuff, and it eventually becomes unsustainable.
Cancelled
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MLMs are not designed to make money for anyone other than those at the top.
JJxvi
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Right. If the product was amazing and set to be profitable, they would sell it through all channels (ie it would be on the shelves at WalMart). But the fact is that the outlook isn't great, so the way for the manufacturer and the big wigs to make money is to stack it so they can be winners at the top, while they get suckers to take all the risk on the downside. The "enterprise" selling the product including EVERYONE involved is losing money or at best breaking even, but the manufacturer and the few who build themselves cozy pyramids below them get all the profits while the flunkies at the bottom all take losses.
BustUpAChiffarobe
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quote:
Right. If the product was amazing and set to be profitable, they would sell it through all channels (ie it would be on the shelves at WalMart). But the fact is that the outlook isn't great, so the way for the manufacturer and the big wigs to make money is to stack it so they can be winners at the top, while they get suckers to take all the risk on the downside. The "enterprise" selling the product including EVERYONE involved is losing money or at best breaking even, but the manufacturer and the few who build themselves cozy pyramids below them get all the profits while the flunkies at the bottom all take losses.
This is also evident because they try to get you to leverage all of your contacts, and have them leverage all of their contacts; it's because the product freaking sucks; and you have to burn your good-will you have with your family, and your friends, and your fellow church-goers in order to get them to buy your ****ty product. Who actually dreams of inventing something that can only be sold by tricking people into coming to your house party, which is actually a demonstration?
Bitter Old Man
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I don't know. On the contrary, I see some of it as an effective marketing strategy. Take Rodan and Fields, their product is geared towards the insecurities of women in their 30's and 40's. What I have seen is that they basically use Peer Pressure to sell. One women uses the product, and their wrinkles are now gone as evidenced with before/after photos that they post on FB. They use words like "look how UGLY she was, and look how PRETTY she is now..." That is very effective in the social media circles which is all about comparing your life to others.

Other women want to try it, so they do and keep coming back for more. They figure out that its cheaper for them to buy product if they are a distributor, so they join on and try to do the same thing, eventually the model fails because the social circle get exhausted.
JJxvi
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AG
A product that legitimately makes 30-50 year old women look better wouldn't need peer pressure to sell I assure you.
TXTransplant
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I'll bring up another annoying/shady feature of some of these MLMs - Rodan and Fields included.

Despite the fact that I generally despise MLMs, I have purchased R&F products. And the products I purchased did give great results. But here is the thing, to get the product for a decent price and to avoid all sorts of ridiculous shipping and handling charges, you have to sign up (and pay a "one-time fee") for a "perks club". In doing so, you authorize them to ship you a refill of product (and charge you cc accordingly) every 90 days. What could be more convenient for a busy working or SAHM mom who wants to look her best than getting your fantastic, much needed product conveniently shipped to your house every 90 days, right?

Well, here is the thing...you get way more than 90 days worth of product. It's more like 6-9 months of product. But unless you go in and delay your shipment, you will be charged for a product you don't need. And then in another 90 days (when you still probably have a partially-used first order and an untouched second order), you get notified of another shipment (and cc charge)! Once you cancel a shipment, you are kicked out of the "club", and either have to pay significantly more for the product or pay the "one time fee" again to get back in the club.

This is exactly why I will not be buying anymore of their products. The shipments come too frequently, and it's a PITA to keep delaying shipments (not to mention you have a small window to delay shipment and you are limited in how many times in a row you can delay). I don't need to be paying $100+ every 90 days for something I need to buy maybe only twice a year. This scam is convenient for no one but the MLM company who now has your cc on file and can charge it at will.
Bitter Old Man
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It does to people who don't need it or don't usually use those kind of products.... My wife for instance is pretty organic, so doesn't use a bunch of chemical based products, but the way R+F has a strangle-hold on our community she is constantly bombarded with it. She has told me that she feels the pressure and sees its effect on others..... The R+F model in our area has become more of a sorority than anything. Women buy it just to be included in the social gatherings, etc..... That's damned powerful marketing there, and they aren't paying out the nose for national TV spots that are minimally effective...
Token
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when i was in college i worked for "vector marketing" which was Cutco. I made good money (about $3K) over the summer, but i was 18 and had no idea what the hell a pyramid scheme was. Now, being 28, i wonder, how the hell i was so stupid to be a part of something like cutco. bunch of con men preying on impressionable fresh out of high school kids
 
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