What does "Pyramid scheme" mean? (Vector, ACN, Primerica, etc)

[voltio8836]

I recently went to this ACN meeting. They charged $20 for this 3 hour "training session". Honestly it was pretty entertaining. Some guy come on the stage and talked about struggles and how to be rich and whatever.

Immediately I knew they were MLM and the thought "scam and pyramid scheme" starting hovering over my head.

However, what exactly does pyramid scheme mean?

I mean, people like to buy up Iphone 4s from apple and then quickly resell it to other people at a higher price. Is that a pyramid scheme?

A farmer grows an apple, which he sells it to warehouse store, who then sells it to a big box retailer, who then sells it to a convenience store, who then sells it to some kid selling it at a yardsale. Is that a pyramid scheme?

[rems]

http://en.wikipedia.org/wiki/Pyramid_scheme

[appleb]

Anytime they show a chart representing you as a circle pointing to two or more circles, that each point to two or more other circles, then it's probably a pyramid scheme.

[sedated_xtc]

I recently went to this ACN meeting. They charged $20 for this 3 hour "training session". Honestly it was pretty entertaining. Some guy come on the stage and talked about struggles and how to be rich and whatever.

Immediately I knew they were MLM and the thought "scam and pyramid scheme" starting hovering over my head.

However, what exactly does pyramid scheme mean?

I mean, people like to buy up Iphone 4s from apple and then quickly resell it to other people at a higher price. Is that a pyramid scheme?

A farmer grows an apple, which he sells it to warehouse store, who then sells it to a big box retailer, who then sells it to a convenience store, who then sells it to some kid selling it at a yardsale. Is that a pyramid scheme?

Not the same. Pyramid schemes, are usually these "businesses" that make money not on the "service" or "product" they're supposed to be marketing, rather, on recruiting. So basically the scheme here is that person A is recruiting person B, then person B is expected to pay a fee for being recruited ($X for training or starter kit or whatever). Then Person B is expected to call all his friends to be recruited and all his friends would therefore have to pay the same fee, so Person B would get a cut, and then person A would also get a cut from that. Rinse and repeat; so you can see with this type of buisness practice, that it's benefitial to be on "top" of a bigger pyramid so to maximize the cuts from the monies a "recruiter" can get.

These schemes usually offer seemingly underqualified candidates with big ideas (i.e. someone in their 1st yaer university could be approached and they'll be like "you can be your very own business owner, we'll see you up and as you can see from our leadership board, there's tonnes of people that have made over $1,000,000 since joining this organization!").

[stuntman]

http://en.wikipedia.org/wiki/Pyramid_scheme

beat me to it. I would have said it this way though:

http://lmgtfy.com/?q=pyramid+scheme (http://lmgtfy.com/?q=pyramid+scheme)

[ji2o0k]

only real way to find out what a "pyramid scheme" is to join and find out...

Let me know if you want to join, I can sign you up!



















LOL!

[stuntman]

Not the same.....

I took one look at their website and it screamed "AmWay!!!!"

Are you by chance a member of an organization that has been accused of being MLM or pyramid in type?

[Montague]

Rob one person to pay off another person - that is what it essentially is.

[0xffff]

Rob one person to pay off another person - that is what it essentially is.

That's a ponzi scheme, not quite the same thing.

[5dark]

They charged you to attend? I thought they try to get as many impressionable marks as they can.

I'm guessing hard times have even hit the con-men or they're trying to make it seem more exclusive.

[stuntman]

They charged you to attend? I thought they try to get as many impressionable marks as they can.

I'm guessing hard times have even hit the con-men or they're trying to make it seem more exclusive.

Aside from monetary the scammers benefit:
-If you are naive enough to pay to attend then you are likely not to cause them a problem during the presentation.
-If you are naive enough to pay it means you are an easier mark. The scammers don't want to waste time on the non naive.

They do the same with phone surveys believe it or not. If you are willing enough to help them on the phone for nothing or some stupid timeshare deal you are more susceptable to a scam in the future.

[blainehamilton]

Obvious pyramid scheme troll is obvious.

[anyasok]

Capitalism = pyramid scheme

[zz000ter]

It means that you will rip off your friends to try to make a few dollars

You will more than likely not make any money
but you will lose a few friends

[the_fm]

Capitalism = pyramid scheme

:facepalm:

[stuntman]

CPP = pyramid scheme::D:

[ssbtech]

This clip from The Office sums it up well:

http://videosift.com/video/The-Office-Pyramid-Scheme

[Blockwork]

lol at capitalism being a pyramid scheme..

i can see how that would work, but no.. capitalism is much, MUCH worse..

[umop]

http://www.youtube.com/watch?v=eMklVzT63Rc

[Ottomaddox]

I recently went to this ACN meeting. They charged $20 for this 3 hour "training session".

I'll be running a course called "How to spot a scam". Although the information you'll get will be priceless, I'm charging only $30.

[Powder + park raider]

A farmer grows an apple, which he sells it to warehouse store, who then sells it to a big box retailer, who then sells it to a convenience store, who then sells it to some kid selling it at a yardsale. Is that a pyramid scheme?

this is a supply chain. correct me if im wrong.

[dragon_drift]

You had to pay $30 for this garbage session?

[Siefer999]

wow, you paid to see the presentation?

i've seen many people go down the pyramid scheme path and all the people that i warned didn't care what I had to say. apparently all of them are doing "great" but I know they are struggling and gave up on it a long time ago. some of them even tried to get me to go to their stupid meetings by saying that they weren't with the company and needed someone to go with so they don't get suckered in if it was a scam. Then they say how smart you are and they start complimenting you about your street smarts and how I would be doing them a favour if I went with them to the meeting "just to go check it out." nice try...

EDIT: I wouldn't be surprised if this thread itself had a secret underlying meaning:

I recently went to this ACN meeting. They charged $20 for this 3 hour "training session". Honestly it was pretty entertaining. Some guy come on the stage and talked about struggles and how to be rich and whatever.

Immediately I knew they were MLM and the thought "scam and pyramid scheme" starting hovering over my head.

However, what exactly does pyramid scheme mean?

So you thought "scam and pyramid scheme" but you don't know what a pyramid scheme is? how could you think it? and also, every presentation of the sort carefully explains how they are "not" a pyramid scheme and how "pyramids" can be found in real life through the normal hierarchical structure of a business. owner - management - employees, whatever. Then they go on to tell you that you are your own boss, you only work for yourself, and the limit to the amount of money you can make is directly related to how much you really want.

Are you just trying to gauge the interest on RFD?

BTW: Once you've completely drained your contacts, you will have no choice but to host some stupid meeting and pay for guest speakers from the company in hopes that there are more suckers out there stupid enough to invest in something stupid.

[dragon_drift]

i went to one with a friend i trust who said it'll be a good experience. it was so dumb. they keep saying how they can make a lot of money (magically) by buying their overpriced insurance plans.

[zz000ter]

this is a supply chain. correct me if im wrong.

You may as well be trying to teach differential calculus to a kindergartener.

Odd how people hunting for a deal does not understand how the products get to the store.
Maybe they should all go to the apple farmer and buy the apples direct and cut out the "pyramid scheme" middle man

PYRAMID SCHEME

One of your friends recruits 5 or 6 chumps (you are one of he chumps) so that he can go up one level in the pyramid. Now each one of the 6 chumps he recruited needs to recruit 6 chumps. That is now you have to recruit 6 suckers. Each of these suckers pays an entrance fee which you pay to the guys above you. Once you move up a level then you get a cut of the entrance fees from the chumps that your chumps recruit

If you get in early into the pyramid you can make money
If you are one of the late comers you will not make any money

... but you can lose friends

Some Pyramid schemes try to look like an MLM - but you buy some lame way overpriced product like "how to succeed" books or how to get rich seminars. So you buy "something" for $500 and then you have to find 6 more friends to buy the same junk for $500 and then you start getting "commissions".

[Jucius Maximus]

OP, it sounds like you are asking about the difference between a Pyramid Scheme and Multi-Level-Marketing (MLM) Scheme.

The difference is that MLM schemes actually do have a product, however dubious it may be. Primerica, Vector Marketing, etc, are Multi-Level because they have a product.

On the other hand, those schemes to collect up PayPay new user bonuses and stuff are just Pyramids.

[Powder + park raider]

Some Pyramid schemes try to look like an MLM - but you buy some lame way overpriced product like "how to succeed" books or how to get rich seminars. So you buy "something" for $500 and then you have to find 6 more friends to buy the same junk for $500 and then you start getting "commissions".

one thing i find absurd about MLM is that, the company puts an inflated retail price on their products, then sells it to it's "agents" at like 50% off. now suddenly the members think they're getting a great deal so they end up using the products themselves. not realizing or just being plain ignorant about the fact that even at 50% off the products are overpriced.

[anyasok]

lol at capitalism being a pyramid scheme..

i can see how that would work, but no.. capitalism is much, MUCH worse..
Oh I agree. I just wanted to make a quick comment to get all the facepalms from the capitalists here. It's a truism by now that capitalism is an outdated system that will lead to the downfall of humanity pretty soon. Thankfully, asteroids that will wipe all life on earth don't really care about it which makes me happy that Earth will recover while this verminous system is finally demolished for good.

[king_george]

We had this discussion a few years ago about ACN.

Immediately thereafter the ACN Trollbot brigade showed up to proclaim how rich they were working just a few hours per week.:D

I received about 100 or so private messages after I laughed and mocked them from the trollbots threatening to sue me, have me beat up, etc etc unless I recanted.

Didn't work. ACN is a huge huge scam and anyone who signs up is too stupid and simply wastes oxygen.

<waits for the trollbots to appear>

[Abel4Life]

I think people are confused.

Ponzi Scheme, Pyramid Scheme, and Multi-Level Marketing are not the same things. Related in some areas but not the same.

Would you say AVON and Mary Kay are Pryamid Scheme's just because they distribute their products through MLM?

[anyasok]

I think people are confused.

Ponzi Scheme, Pyramid Scheme, and Multi-Level Marketing are not the same things. Related in some areas but not the same.

Would you say AVON and Mary Kay are Pryamid Scheme's just because they distribute their products through MLM?
We all know capitalism combines the worst of all three so...

[5dark]

I think people are confused.

Ponzi Scheme, Pyramid Scheme, and Multi-Level Marketing are not the same things. Related in some areas but not the same.

Would you say AVON and Mary Kay are Pryamid Scheme's just because they distribute their products through MLM?

How big is the demand for their products compared to other sources (Safora, MAC etc)?

How much do the reward you for recruiting another member?

How much do they charge for joining them?

[Syne]

If the revenue gained from recruiting people under you exceeds the revenue from an actual product or service you're providing, then it's a pyramid scheme.

[MrKap]

But all the people who you;ve recruited need to have the same or similar pay structure.

Essentially, if all the recruiting were to stop, the pyramid would collapse.

There is nothing illegal about that is there? So long as you are selling stuff alongside recruiting right?

I mean what do scientologists or churches sell? One sells books, and the other asks for donations.

If this were illegal, surely half of the North American economy would collapse overnight.

[masterhapposai]

We had this discussion a few years ago about ACN.

Immediately thereafter the ACN Trollbot brigade showed up to proclaim how rich they were working just a few hours per week.:D

I received about 100 or so private messages after I laughed and mocked them from the trollbots threatening to sue me, have me beat up, etc etc unless I recanted.

Didn't work. ACN is a huge huge scam and anyone who signs up is too stupid and simply wastes oxygen.

<waits for the trollbots to appear>

LOL

king_george and I rarely agree. if we both say ACV is a huge scam and full of ****, then it definitely is.

And although I don't particularly like king_george, if you threaten to beat him up I am going to mock you till you cry, if not get your IP sent to the cops for more lulz.

[masterhapposai]

How big is the demand for their products compared to other sources (Safora, MAC etc)?

How much do the reward you for recruiting another member?

How much do they charge for joining them?

I can't remember, but Avon, Mary Kay, Tupperware are better than this crap like ACN/Primerica/WFG, etc.

At least with the 3 physical products you're getting something substantial, cheap, useful and their prices in the 1980's and 1990's were on par or sometimes better than say Shoppers Drug Mart. It was also hand delivered to you for free.

These days, all these services are ******** to use when you can order online with cheap/free shipping and get better deals. MLMs are just a "stupid tax" now to take advantage of those with low IQ, or for people with low IQ to guilt trip their family/friends into purchases until they lose all their family/friends then are forced to make new friends until they go broke and blacklisted from humans.

And if you buy insurance and other financial products from untrained people, you deserve to get wrecked later and overcharged in the long run.

[Abel4Life]

Avon is about an $11 billion publicly traded company that relies on 'direct selling'. Their charmain/CEO is from Toronto (Andrea Jung) and is listed in the top powerful women list.

I mean, they must be doing something right if people are buying their beauty products.

There is no 'pyramid that can collapse' model. People either buy their products/services or not and their annual/quarterly reports like any other publicly traded company will provide us a sense of their financial stability and growth.

According to the definition (if we go by Wikpedia)

'A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.[1][2]'

Avon and similiar companies such as Mary Kay would NOT be a pyramid scheme just because they use direct sales people. Their business model is pretty open.

http://www.avoncompany.com/earningsopportunity/directselling.html

[king_george]

LOL

king_george and I rarely agree. if we both say ACV is a huge scam and full of ****, then it definitely is.

And although I don't particularly like king_george, if you threaten to beat him up I am going to mock you till you cry, if not get your IP sent to the cops for more lulz.

I wish I had saved the messages. It was a huge laugh fest.

The wife and I and my kids thoroughly enjoyed taunting them. And my youngest was 13 at the time. We would take turns replying to them with the best reply winning an ice cream from DQ.:lol: My treat even.

They filled up the inbox pretty quick and I had to delete them. I wish I would have thought of saving them first. :cry:

My sister sold Mary Kay for years and made a fair chunk of cash but no pink car. That and Avon is in no way shape or form a pyramid. Their business model depends on sales, not recruitment.

[onlineharvest]

In these kinds of schemes, the people at or near the top make all the money.
When the primary source of income, in order to become wealthy, relies on recruiting others to sell/distribute the same, then run.
You get a percentage of the 1st tier, 2nd tier, and so on.
The market would conceivably get saturated, so that you are forced into even greater effort placed on recruitment to make money.

I've seen families get sucked into 'parties' to sell products that are garbage or sub-par.
They have bogus email letters claiming to have a 'friend' that is making millions.
They say they have a great product to show, but then get to the real juice, 'pay $1000 for the right to do what I do, and you could be rich'

Stay as far away from this as possible.

[dcyeung]

It's kind of odd that in real life, your employer pays you.

In the MLM/pyramid scheme world, you pay your employer.

If you have to pay your employer and the people below you pay you, it's a pyramid scheme