 |
| Author | Post |
|---|
nstaley
Member
|
Posted: Thu Sep 6th, 2007 04:06 pm |
|
Top tips Lazarus! I like the "legal Pyramid plan" Most would steer clear of using the word pyramid at all, but you are taking it head on and making it useful. I like that!
I'm hoping to get an answer on this: One of my main active downline members has built a big downline beneath him, a large chunk of which are from the Phillipines.
Now he is trying to crack into the Phillipines as we are in a new global business and is getting common feedback from the native people there who seem scared to touch mlm with a bargepole as they consider that their government deems it to be illegal.
I wonder if anyone has any experience of this and knows whether there is truth in this or are they confusing mlm with pyramid schemes being illegal?
I've also heard that there are a couple of states in the US who for some reason don't allow mlm?
Anyone?
Thanx,
Nick
Last edited on Thu Sep 6th, 2007 04:08 pm by nstaley
____________________
Red Hot
|
MonavieBabe
Member
|
Posted: Sun Sep 9th, 2007 04:00 pm |
|
Yea! I get that too!
My answer is "It's not a pyramid because you can pass me up, plus I can create more distribution centers next to the one I started - after I reach a set volume." (this is the deal with Monavie, I don't know if they all work like this.)
Also, I see your biz opp has something to do with gaming. It just so happens I was talking to the folks at http://www.gameroom.com the other day, and you may be able to work something out with some traffic. I know they get ALOT of hits. I didn't quite understand what it is that you do...........but it is gaming right?
____________________
http://www.mymonavie.com/save Drink the #1 Most Powerful Antioxidant on Earth - Acai, and save the Rainforest at the same time! 10-30x more anthocyanins than red wine (the stuff thats good for us), 10x more antioxidants than any fruit or veggie!
|
lazarus
Member
| Joined: | Thu Oct 5th, 2006 |
| Location: | Canada |
| Posts: | 13 |
| Mana: |  |
|
Posted: Sun Sep 9th, 2007 05:07 pm |
|
Some very good comments here...I like the one 'MonavieBabe'.
It all comes down again to the value of the product, to the end customer. If the product is real, and they really want it and see the value in it, they won't raise the "pyramid issues" much, in my exprience.
Also, I try not to emphesize that the company pays on multiple levels. Yes, it's a great thing, but since over 90% of people never make any money, many won't even have a chance to build multiple levels. So sometimes it's better to just stick to a simpler explanation..That the company pays for referrals, and that's it.
One of the problems in this industry too, is when we approach people who are looking for ways to make money, and then we are asking them to buy these products (spend money) to have a chance at the business.
The problem is when the prospect sees these products as a new expense for him/her. Then they are not likely to give the biz a fair shot, even if they do get involved, since they won't use much of the products (and if they are forced to buy them, autoships etc they'll look for an excuse to get out, and they start questioning the pay plan etc.)
I think that the whole thing changes once the biz prospect sees the value in the products as well. If it's nutritional, it helps that the prospect is into health and wellness to begin with. Otherwise, again, they'll look at it as something that was imposed on him/her, start questioning the pay plan etc.
We all hear that the company/products don't matter as much as the marketing, but it sure helps if the company has something for everyone, not just a selected target group. Otherwise, it's a bit harder, but it is possible to educate some propects about the importance of nutrition, energy drinks etc. Not as easy as with soemone who's already into it, but it can be done. Still, the business got much easier for me when I got involved with a company offering a wider range of products, not just health and wellness, but a whole range of household products that everyone needs. That way at least I don't have to convince them they need these products. They are already in the habit of buying them.
Either way, if you're dealing with a prospect who's 100% interested in making money only, but not in the habit of buying products/services that your company offers, it's going to be much harder. Just rely on the education (through your web site, email autorespnders messages etc) and hope they'll get into it, otherwise, they might be a pain to work with, and quit soon anyways.
Finally, I recently tried going the other way. In addition to advertising the business opportunity, and then exposing people to products, I started advertising the products, and then convert some of those customers into business builders. It is such a refreshing experience, since you let the product enthusiasts find you first.
Lazarus
____________________
GO GREEN AND SAVE!....An average family can save over $1K/year on everyday household products
Free Video Here
|
bizdog
Member
| Joined: | Mon Sep 10th, 2007 |
| Location: | Singapore |
| Posts: | 8 |
| Mana: | |
|
Posted: Mon Sep 10th, 2007 08:48 am |
|
Hello,
Can anyone kindly explain the differences between MLMs and Pyramid schemes? I mean, are there any fundamental differences that allow one to spot if a scheme is an MLM or Pyramid? And for MLM schemes, are there ways to check if they are legal?
All suggestions and opinions are welcome. Thanks! 
____________________
Business ideas from home, with global customers. Try it today!
Sign up FREE to know more
|
MonavieBabe
Member
|
Posted: Mon Sep 10th, 2007 12:41 pm |
|
What is a Pyramid Scheme and What is Legitimate Marketing?
Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. There are two tell-tale signs that a product is simply being used to disguise a pyramid scheme: inventory loading and a lack of retail sales. Inventory loading occurs when a company's incentive program forces recruits to buy more products than they could ever sell, often at inflated prices. If this occurs throughout the company's distribution system, the people at the top of the pyramid reap substantial profits, even though little or no product moves to market. The people at the bottom make excessive payments for inventory that simply accumulates in their basements. A lack of retail sales is also a red flag that a pyramid exists. Many pyramid schemes will claim that their product is selling like hot cakes. However, on closer examination, the sales occur only between people inside the pyramid structure or to new recruits joining the structure, not to consumers out in the general public.
A Ponzi scheme is closely related to a pyramid because it revolves around continuous recruiting, but in a Ponzi scheme the promoter generally has no product to sell and pays no commission to investors who recruit new "members." Instead, the promoter collects payments from a stream of people, promising them all the same high rate of return on a short-term investment. In the typical Ponzi scheme, there is no real investment opportunity, and the promoter just uses the money from new recruits to pay obligations owed to longer-standing members of the program. In English, there is an expression that nicely summarizes this scheme: It's called "stealing from Peter to pay Paul." In fact some law enforcement officers call Ponzi schemes "Peter-Paul" scams. Many of you may be familiar with Ponzi schemes reported in the international financial news. For example, the MMM fund in Russia, which issued investors shares of stock and suddenly collapsed in 1994, was characterized as a Ponzi scheme.(2)
Both Ponzi schemes and pyramids are quite seductive because they may be able to deliver a high rate of return to a few early investors for a short period of time. Yet, both pyramid and Ponzi schemes are illegal because they inevitably must fall apart. No program can recruit new members forever. Every pyramid or Ponzi scheme collapses because it cannot expand beyond the size of the earth's population.(3) When the scheme collapses, most investors find themselves at the bottom, unable to recoup their losses.
Some people confuse pyramid and Ponzi schemes with legitimate multilevel marketing. Multilevel marketing programs are known as MLM's,(4) and unlike pyramid or Ponzi schemes, MLM's have a real product to sell. More importantly, MLM's actually sell their product to members of the general public, without requiring these consumers to pay anything extra or to join the MLM system. MLM's may pay commissions to a long string of distributors, but these commission are paid for real retail sales, not for new recruits.
How Pyramid Schemes Operate
Let's look at how a pyramid scheme operates from three points of view: the potential investor, the promoter or con artist, and the victim. Many pyramid schemes will present a payout formula or matrix much like this one:
# Payment of $500
Level 1 $150 x 3 = $450
#
#
#
Level 2 $30 x 9 = $270
# # #
# # #
# # #
Level 3 $30 x 27 = $810
# # # # # # # # #
# # # # # # # # #
# # # # # # # # #
Level 4 $30 x 81 = $2430
etc. # # # # # # # # #
# # # # # # # # #
# # # # # # # # #etc.
--------
$3960
This example illustrates what is known as a three by four matrix. Each investor pays $500 to the promoter and is told to build a "downline" by recruiting three new members, who then each should recruit three more members. The investor is told that he will be paid $150 for each of the three members whom he enlists at the first level. The investor is also promised a $30 commission for each recruit at the next three levels. Thus, the investor should receive commissions for four levels of recruits below him, each of whom must recruit three more members, hence the name -- a three by four matrix.
To the potential investor/recruit this may look like a very appealing opportunity. The pyramid promoter is likely to persuade the investor that he is "getting in early" and that he should consider himself at the top of the matrix. From this perspective, it appears that he can earn $3,960 on an investment of $500, a whopping 792 percent return. You can do the math easily: $150 from the first level of 3 recruits is $450; $30 from the next 3 levels of recruits is $270 ($30 x 9), plus $810 ($30 x 27), plus $2,430 ($30 x 81). Not a bad deal.
Yet, consider the matrix from the promoter/con artist's point of view. He is the person at the top of the pyramid but in fact looks at the scheme from the bottom. He views each new investor as a predicable set of revenues and expenses, with the revenues flowing down to him. The con artist receives $500 for each new member, and at most he will have to pay $240 in commissions to earlier investors in the new recruit's "upline," i.e. those people responsible for bringing him into the system. So when an investor joins the system in the last level, the promoter will receive $500, but he will pay only $150 to the person who recruited the new investor, and $30 each to three longer-standing members in the new investor's "upline," for a total of $240. Thus, the con artist will keep over half of every $500 membership fee paid.
Let's assume that this scheme collapses after the fourth level of recruits is filled. The con artist will have made $500 from the first investor in the pyramid ($500 with no commissions paid out), $350 from the 3 at the next level ($500 minus commission of $150), $320 from the 9 at the next level ($500 minus commissions of $150 + $30), $290 from the 27 at the next level ($500 minus $150 + $30 + $30), and $260 from the 81 newest investors ($500 minus commissions of $150 + $30 + $30 + $30). The simple math -- $33,320 flowed down to the con artist -- and all he did was attract one investor!
Now consider the pyramid from the investor/victim's perspective -- after the entire scheme has collapsed around him. The victim, like the first investor, thought of himself at the top of the pyramid but suddenly realizes that he is actually at the bottom, unable to find people interested in the program to build out his downline. He is not alone because mathematics shows that MOST investors will find themselves at the bottom of the pyramid when it collapses. The very structure of this matrix dictates that whenever the collapse occurs, at least 70 percent will be in the bottom level with no means to make a profit. They all will be out $500. In our example, even those people one level above the bottom will not have recouped their investment. They each will have paid a membership fee of $500 and collected commissions of $150 for each of three recruits, leaving each investor in the second-from-the-bottom tier at least $50 shy of his break-even point. In short, when the pyramid collapses all the investors in the bottom two levels will be losers. Adding together the number of victims from these bottom two levels shows that 89 percent of all the pyramid's participants (108 of 121 investors) are doomed to lose money
____________________
http://www.mymonavie.com/save Drink the #1 Most Powerful Antioxidant on Earth - Acai, and save the Rainforest at the same time! 10-30x more anthocyanins than red wine (the stuff thats good for us), 10x more antioxidants than any fruit or veggie!
|
MonavieBabe
Member
|
Posted: Tue Sep 11th, 2007 04:18 pm |
|
| Biz Dog, Also since you're in Singapore - your govt. may have different rules as to what a pyramid is. I do know Singapore is one of the few countries Monavie is currently available in, since its a newer company, but it is expanding globally very fast. (as fast as they can get government approval in each country, and keep us with the changes to marketing material, bottling requirements, website, labeling, etc. ) If you're getting into network marketing as a business, (and not just to order a limited amount of product for personal use at wholesale prices) one thing to consider is get on good active supportive team. You want to align yourself with a team (or upline) that is active in the business as you will dramatically benefit, rather than under your Aunt Martha just because she said it is good. If your upline is active, and agressive they will help you build your retail business, and add distributors.
____________________
http://www.mymonavie.com/save Drink the #1 Most Powerful Antioxidant on Earth - Acai, and save the Rainforest at the same time! 10-30x more anthocyanins than red wine (the stuff thats good for us), 10x more antioxidants than any fruit or veggie!
|
expectthebest
Member
| Joined: | Sat Sep 22nd, 2007 |
| Location: | USA |
| Posts: | 4 |
| Mana: | |
|
Posted: Sat Sep 22nd, 2007 06:38 pm |
|
I am currently trying to decide whether or not to sign up in an mlm. I have actually had a lot of experiences in mlm before and have generaly not done very well but I have had some successes. This new opportunity, however, is quite inexpensive with a product that looks good and the person who contacted me is quite respectable. Therefore I would like to give it a try. I have been doing a lot of research and reading both the pro and con information out there in regards to mlm in general. There is a lot of information!
This seems to be a site which has experienced mlm'ers posting. I am hoping I can get an answer to a question that I can't seem to rectify.
1. What exactly constitutes a legal mlm from an illegal pyramid. I have read that in order to be legal, each distributor must have at least 10 retail customers. Quite frankly, I have never been involved with an mlm that focused more than just slightly on retail if at all. This one is no different.
I would be very appreciative to have the thoughts, recommendations, philosophy and advice from you experts on this topic.
Thanks!!
|
expectthebest
Member
| Joined: | Sat Sep 22nd, 2007 |
| Location: | USA |
| Posts: | 4 |
| Mana: | |
|
Posted: Mon Sep 24th, 2007 12:22 am |
|
expectthebest wrote: I am currently trying to decide whether or not to sign up in an mlm. I have actually had a lot of experiences in mlm before and have generaly not done very well but I have had some successes. This new opportunity, however, is quite inexpensive with a product that looks good and the person who contacted me is quite respectable. Therefore I would like to give it a try. I have been doing a lot of research and reading both the pro and con information out there in regards to mlm in general. There is a lot of information!
This seems to be a site which has experienced mlm'ers posting. I am hoping I can get an answer to a question that I can't seem to rectify.
1. What exactly constitutes a legal mlm from an illegal pyramid. I have read that in order to be legal, each distributor must have at least 10 retail customers. Quite frankly, I have never been involved with an mlm that focused more than just slightly on retail if at all. This one is no different.
I would be very appreciative to have the thoughts, recommendations, philosophy and advice from you experts on this topic.
Thanks!! Nobody has any comments???? Please let me know your thoughts...........
|
nstaley
Member
|
Posted: Mon Sep 24th, 2007 09:29 am |
|
I have comments! Sorry I have been sunning it up on holiday! lucky me.
Here's an article from the Trading Standards Department in Nottingham UK addressing the issue of what MLM is. You can see the difference between MLM and Pyramid Schemes:
Multi Level Marketing - Article by Trading Standards
MULTI-LEVEL MARKETING - WHAT IS IT?
Trading Standards Department
Nottinghamshire County Council
Trent Bridge House
Fox Road, West Bridgford
Nottingham, NG2 6BJ
Often the subject of enquiries and complaints by members of the public to trading standards departments, Multi-Level Marketing (MLM) has for too long been shrouded in mystery and misunderstanding. In this article I attempt to give you the facts about this successful, legal and increasingly popular method of doing business, for your interest and for the benefit of persons seeking advice from our service.
What is it?
Also known as Network Marketing, MLM is a rapidly expanding method of selling goods and services which is now firmly established in most countries of the free world. It is big business, probably offering the opportunity for wealth to more people than any other form of business.
Worldwide sales through MLM are over #7,000,000 annually. 20% of the 500,000 plus millionaires in the USA made their fortune in the last ten years through MLM, and the concept is being taught at Harvard Business School in the USA. The basic principle of MLM which makes it different to conventional businesses is that, instead of a manufacturer constructing a large administrative and sales organisation comprised of employees, self employed distributors are encouraged to build a sales organisation of persons like themselves by their own efforts.
Financial rewards are paid based upon total sales of all distributors within the organisation developed by any particular distributor. In such a way distributors are paid in proportion to their efforts in selling and sponsoring others (recruiting).
The types of goods and services available through MLM cover virtually every area of consumer spending: household necessities; slimming products; perfumes; cosmetics; books; food; property development; fitness equipment; financial services etc.
The attractions of MLM include:
1) the availability of a very high income from part-time work
2) the lack of any significant financial or other risks
3) for the companies; a highly motivated sales force. Stockholding is unnecessary and products are obtained in response to retail orders.
We are not talking about 'get-rich-quick' schemes here, although exceptional people may be able to do so. The vast amount of company profits which would normally be spent on employees, marketing and advertising in conventional businesses, are available instead to pass on to distributors in commission and bonuses. The high incomes possible are due to residual income, i.e. income based upon previous efforts. Insurance agents, writers, actors musicians earn residual income, provided the policies continue, the books & records still sell and so on. So in MLM, as long as the products sell regularly and your organisation grows, then your residual income increases due to your past efforts in sponsoring. Linear income, i.e. a month's work, is always limited to certain levels whereas residual income is in theory unlimited.
However, it must be remembered that MLM is like any other business in as much as high rewards are solely the product of hard work. Safeguards are built in to the more reputable schemes to ensure that there are no short cuts to success and that the cornerstone of the business consists of retail sales to the public. Some schemes require regular purchases by distributors for their own use, thereby increasing the business volume and therefore profit of each distributor's group. The most stable and successful companies schemes are firmly based on repeat purchasing of quality products by satisfied customers.
Complaints & Enquiries
Most justifiable complaints relating to MLM are caused by the over-enthusiastic and occasionally deceptive activities of distributors who are excited at the potential of their business.
Problems are usually related to
a) exaggerated claims about the products
b) misleading invitations to meetings where the business opportunity is to be presented
c) reluctance to honour money back guarantees given by the companies
d) misleading information given at business presentations
e) misleading advertising for product sales or recruits.
Invariably, contact with the relevant promoting company will result in swift action against the problem distributor, who would certainly be flouting the company's rules of conduct in most cases. Of course there is always the possibility that the distributor and/or the company have committed offences.
Common questions about MLM are
Isn't it pyramid selling? - The Oxford English Dictionary defines the term as .....a form of financial trickery...... Although the term is often used to describe MLM, it is more appropriate to reserve its use for the highly undesirable and now illegal schemes which surfaced in the early 1970.s where participants were required to pay large sums to enter schemes and were encouraged to purchase large consignments of goods - the larger the quantity the bigger the discount - before ensuring that they had the customers and the additional participants to supply them to. Naturally, many people were left considerably out of pocket with vast stocks of unsold product.
Won't it saturate?
The Department of Trade and Industry in an advisory leaflet describes how, within six months there could be 67,000,000 distributors in any one scheme. This is fine in theory, but a dubious statement when some facts are considered
a) the largest MLM company in the world has steadily been expanding for 30 years and its UK distributors number less than 1 in a 1,000 of the population
b) the UK birth rate is many times higher than the rate of increase in numbers of distributors in any major MLM scheme
c) saturation of any particular area is unlikely due to the facility of being able to sponsor persons living anywhere in the UK (or internationally in some cases) without undue difficulty
d) it has never yet happened.
Is it better to get in at the start?
Again the DTI says yes but I am not sure that this is correct. Following on from the arguments above, there will always be a certain proportion of the population which want to participate in any particular scheme and because of the dynamics of populations I suggest that it is no more difficult to find prospective distributors or customers at a later stage of a scheme than it is at the start. It is also true that some of the most successful distributors started their businesses very recently in terms of the age of the companies concerned. It is possible that a prospective distributor may be better off dealing with an established, stable and financially sound company than a brand new one.
Legislation
Apart from legislation covering many aspects of specific products, Part XI of the Fair Trading Act 1973 and regulations thereunder govern certain aspects of the operations of MLM schemes.
Most of the larger companies schemes come within the scope of section 118 of the 1973 Act and are therefore obliged to operate within the rules set down in the Pyramid Selling Schemes Regulations 1973 and in Section 120 of the Act. These requirements are directed principally to providing full details of the schemes and the rights of participants to any prospective distributor and to the avoidance of the undesirable aspects of pyramid selling., e.g. payments or rewards based upon matters other than completed retail sales.
A review of the current legislation by the DTI has been proceeding for a number of years. This may result, among other matters, in restrictions upon schemes where sales to distributors are given more prominence than sales to the public.
Finally, what advice can be given it to a prospective distributor who wants to know whether to join an MLM scheme? I suggest the following:
Look at some of the numerous other MLM companies besides the one that you are are being asked to join. Compare the quality, range and price of the products and the different marketing plans of each company. Then ask yourself these questions:
(1) Would you buy the products yourself?
(2) Are you satisfied with the integrity and stability of the company and the marketing plan?
(3) Are you willing to put in a significant amount of consistent effort?
If all three answers are yes, there is a lot of money waiting for you, so get started. If you are less sure about the answers say No.
Consider making a small income by selling only or even joining up solely to obtain product for your own use at less than retail price.
Further information and company details can be obtained from the Direct Selling Association, of which most reputable company's are members.
I hope this helps you out.
Nick 
____________________
Red Hot
|
expectthebest
Member
| Joined: | Sat Sep 22nd, 2007 |
| Location: | USA |
| Posts: | 4 |
| Mana: | |
|
Posted: Tue Sep 25th, 2007 05:12 am |
|
Thank you nstaley for the response. This is some very good information. I have done some additional reading and it seems that the FTC requires 10 non-distributor sales per month for each distributor in order to be considered a legal mlm. Otherwise, FTC considers it an illegal pyramid. I'm curious if my understanding is correct and what the rest of you on this board think about this.
In taking this even further, what if a business was structured like the following:
I will not mention the business because this is not an attemp to advertise!
What if the in order to become a distributor, you had to go on a monthly auto-ship for a relatively inexpensive product (< $30.00 including shipping). The distributor would then receive $5 monthly from each auto-ship that was personally sponsored. What if the retail price was 3 times that. In that case, wouldn't you guide retail sales prospects to become a distributor just for the cost savings even if they were never to build the business? (product would have a 60 day return policy).
In the case I have described, the distributor has guided retail sales prospect to sign up as a distributor in order to get the discount. Because the rest of the business is based on a matrix plan, the distributor would get credited with volume on some level from this sign up in addition to the initial $5. So, in reality, the new sign up is a retail/consumer sale but it wouldn't be counted by FTC because technically the new sign up if a distributor now.
A few comments about this business that I am considering..........There is no sign up fee. The only stipulation to remain a distributor is the montly autoship for less than $30 with shipping.
I would very much appreciate opinions from this board. The good, the bad and the ugly. Am I going down the right path? Does this plan sound legal?
Expectthebest
Last edited on Tue Sep 25th, 2007 05:16 am by expectthebest
|
m2cmentor
Member
|
Posted: Tue Sep 25th, 2007 05:29 am |
|
The biggest thing that probably got that response from your friend is you told him you were "doing this thing"
Had you referred to it as a real business, you might have gotten a different response. Of course we don't know what you sent this person in the email either.
I think by also telling him how many people joined under you also made him make those comments as he is clearly against mlm or nwm.
____________________
DrinkACT.com - A.C.T. Healthy Energy Drink & Effective Weight Loss Programs
|
nstaley
Member
|
Posted: Tue Sep 25th, 2007 08:46 am |
|
Yes m2cmentor, that's true "I'm doing this thing" does sound a bit wrong!
I hadn't been doing this that long then. I will ensure I refer to it as a business always from now on, thanks.
I do now stand tall and proud of this "business" and I suppose on retrospect back then I still had my own doubts which may have inadvertantly led me to have described it as "this thing"
I had never spotted this error before though, what a simple thing!
With regards to what I sent, (I just had to go and check as you had me curious as to what it was that I had sent) it was a very short email with a web address and an arrow to say "my new website." They must have clicked through the link and not liked what they saw from the company rather than what I had written. Can't please everyone though eh!
He clearly had preconceived ideas about mlm, nwm and tarnished it as pyramid selling - yes! Also people are only ever interested in WIFM "What's in it for ME?" So I suppose by me telling him how many I had sponsored in such a quick time did nothing to reassure him that HE could do it, moreover it probably cemented further his thoughts that he wouldn't be able to get that success with it.
I remember now that he said that I hardly know anyone anyway, I think the old school network marketing techniques of hammering friends and family with your biz opp had clearly left a BAD taste in his mouth from a decade beforehand. Nowadays with all the new methods of attracting people to you that we have at our fingertips, this approach is left a little redundant and rightly so!
Thanks,
Nick
____________________
Red Hot
|
expectthebest
Member
| Joined: | Sat Sep 22nd, 2007 |
| Location: | USA |
| Posts: | 4 |
| Mana: | |
|
Posted: Wed Sep 26th, 2007 12:30 am |
|
expectthebest wrote: Thank you nstaley for the response. This is some very good information. I have done some additional reading and it seems that the FTC requires 10 non-distributor sales per month for each distributor in order to be considered a legal mlm. Otherwise, FTC considers it an illegal pyramid. I'm curious if my understanding is correct and what the rest of you on this board think about this.
In taking this even further, what if a business was structured like the following:
I will not mention the business because this is not an attemp to advertise!
What if the in order to become a distributor, you had to go on a monthly auto-ship for a relatively inexpensive product (< $30.00 including shipping). The distributor would then receive $5 monthly from each auto-ship that was personally sponsored. What if the retail price was 3 times that. In that case, wouldn't you guide retail sales prospects to become a distributor just for the cost savings even if they were never to build the business? (product would have a 60 day return policy).
In the case I have described, the distributor has guided retail sales prospect to sign up as a distributor in order to get the discount. Because the rest of the business is based on a matrix plan, the distributor would get credited with volume on some level from this sign up in addition to the initial $5. So, in reality, the new sign up is a retail/consumer sale but it wouldn't be counted by FTC because technically the new sign up if a distributor now.
A few comments about this business that I am considering..........There is no sign up fee. The only stipulation to remain a distributor is the montly autoship for less than $30 with shipping.
I would very much appreciate opinions from this board. The good, the bad and the ugly. Am I going down the right path? Does this plan sound legal?
Expectthebest Bump.....Does anyone have adivce for me? Thanks!!
|
nstaley
Member
|
Posted: Wed Sep 26th, 2007 08:55 am |
|
Hey Expectthebest,
I'm no legal expert and it's difficult to ascertain what this opportunity is that you are questioning. Laws from the UK differ from the US of course as well.
If I were you, I would contact Trading Standards and ask? If there is no Trading Standards in the US then there must be an equivalent governing body which regulates such opportunities as you are querying. A google search should point you in the right direction for that.
The fact that you aren't getting answers here may just be because people don't know if what you are asking about is legal or not, I doubt if there are lawyers here for instance and the people who may have half an idea whether it's legal or not may not want to state categorically that it is or isn't in case they give you a bum steer!
If your gut is telling you that this might not be legal then maybe there is something more to it. If it's not sitting comfortably with you then look around, there are plenty more bonified opportunities out there in the mlm arena.
Here in the UK for instance there is the Direct Selling Assosciation where information and company details can be obtained, of which most reputable company's are members.
I hope this helps.
Nick
____________________
Red Hot
|
Joetrevison
Member
|
Posted: Wed Sep 26th, 2007 03:30 pm |
|
I know a few people in Pyramid Marketing but I don't know what they really did to get them in trouble.
Glen Truner
And the late William Patrick
Are two that got into deep trouble with that type of marketing.
I know Stanley Products and Avon are not pyramid marketing. Put to make the big money you need a huge downline.
____________________
http://tstolz.avonrepresentative.com/
|
VacationBrothers
Member
| Joined: | Thu Oct 18th, 2007 |
| Location: | USA |
| Posts: | 5 |
| Mana: | |
|
Posted: Thu Oct 18th, 2007 12:16 pm |
|
Thje best thing I found that works is ask people to watch Brilliant Compensation. It is a great tool and it is extremly effective.
John
____________________
If you will do what most people will never do, you can have what most people will never have.
http://www.vacationpresentation.com
|
TimStephens
Member
|
Posted: Thu Oct 18th, 2007 05:26 pm |
|
Hello All!
If you want to see a true pyramid. Look at most Corporate Organizational charts.
It always makes me laugh (right in their face) when someone says that to me when I am talking to them about my opportunity. I can only make money if I am helping my downline succeed.
In the corporate world, the guy at the top makes all of the money and quite frankly does not care about you, your family or your life.
Just ask my brother-in-law. After 27 years with a company, making close to $100,000 a year, he was wrongly accused of something that I know he wouldn't do. He is now 48 years old and out of work. No severance package, nothing!
Work on your job full time, work on your fortune part-time. Then you can be the one telling your job: "I am overqualified for anything that you have for me here, so I hereby tender my resignation...thanks for nothing and pound salt!"
It feels so good!
Tim
____________________
Give Tim Stephens 7 days and he will show you how to generate your own leads, build a business without cold calling and become the "Hunted" instead of the "Hunter" http://www.huntedvshunter.com
|
JFulker
Member
|
Posted: Sat Oct 20th, 2007 02:08 pm |
|
The old way of doing MLM is what your friend is talking about. He has probably had a bad experience or knows somebody who has had a bad experience. I hear this all the time, in fact, when friends and family find out what I am doing, they immediately tell me, "don't talk to me about this, I am not interested!!! BLAH BLAH BLAH!" I tell them right of the bat, I am only marketing online and that their being in my business or not is irrelevant to my success. They have been conditioned to think like this:
MLM = sell and bother friends and family (and their friends and family)
MLM = spend hundreds of dollars to start
MLM = spend hundreds of dollars on worthless tapes, CD's and books
MLM = noisy hotel RAH RAH meetings
MLM = overpriced annual conventions that everyone swears that if
you don't go, you will never make it in your business
All of these were the case at one time will OLD MLM companies, but even some really old ones have moved to internet marketing.
Unfortunately, there are some businesses that follow the above and even discourage
online marketing. "IT'S NOT DUPLICATIBLE" "IT'S NOT PART OF THE SYSTEM"
"If you ever buy a MacDonald's Franchise, you would move the french fry machine, wouldn't you." "Then they would take your franchise from you!!!"
It's the 21st Century, we have the internet and almost everybody uses it. It's a far better way to promote your business than the OLD SCHOOL ways.
____________________
Get Paid To Give Away The Golden Ticket Movie, Click Here For FREE Details & A Copy Of The Movie!
|
delta
Member
|
Posted: Mon Oct 22nd, 2007 01:24 pm |
|
I think you hit the nail on the head, davidbachelor! Educate the people, then most likely they just come to you and you don't even have to approach them.
Mainly, you just need to check on yourself. What are your motives? Are you genuinally interested in helping others? If you are sincere about wanting to help others, they'll realize it and then come to you for help.
Helping others is the way to help yourself!
At least that's what I think about it, I could be wrong for some people in some situations; all I know is that it's right for me! 
____________________
Blessings,
Delta
Find Out How To Make $100.00 A Day
http://www.paysmewell.com
|
Tommy17
Banned
|
Posted: Mon Nov 12th, 2007 01:26 pm |
|
| You can't say the right things to the wrong person or the Wrong things to the right person!
____________________
Tommy Moore
Independent Associate
Director
PrePaid Legal Services, Inc
(910) 554-4635
http://www.ctmoore.com
http://tommymoore.buildlastingsuccess.com
I Get paid DAILY!!
|
Current time is 01:13 am | Page:   1 2 3   |
|
|
|
|
