Pyramid Schemes

[OOhsoflyDELTA#9]

Wow...its crazy that this thread was posted tonight because today is the one year anniversary of my joining a Cashflow to Wealth marketing company...I know there are some useless companies out there but not all of them are....I know more now then I ever I thought I would about my finances and how to break the cycle of debt so many Americans are caught up in...but thats what my company is about..I sometimes get misty thinking what my financial future would have been like without one of my friends introducing me to our system..I was clueless and probably would have had to work until I died....I know some companies try to get you to push huge amounts of household products or what not and other useless stuff...as far as being pushy, I'm not at all when it comes to my business, I feel like this, I mention it to people I feel like can truly understand the concept because IMO everyone who isn't wealthy needs it, but everyone can't and will not be able to grasp it, it takes a great deal of discipline....I guess maybe its because we don't sell anything...this is the first time I've even mentioned it on GC and I post almost everyday...

ETA: businesses formed in a pyramid formation are common...take Mickey Ds for example...corporate is on top, you buy a franchise you fall under the top...you pay a fee and a percentage of your sells go to corporate...its a pyramid structure...every store opened makes up the body of the pyramid...the scheme thing comes in with companies where only the top brackets make any money because the requirements, quotas, or whatever are too difficult to reach for the people in the "body" of the pyramid...

[AGDee]

What makes a franchise different than a pyramid is that there is only one level below corporate. Each franchise doesn't try to get others to buy franchises from them to make money off of them. Your own success isn't dependent on how many other people you get to buy franchises. It's only dependent on how well you run your business and if you made a smart business decision in the first place (chose a good location, in an area where there was a need, etc).

[bluefish81]

Originally Posted by OOhsoflyDELTA#9

ETA: businesses formed in a pyramid formation are common...take Mickey Ds for example...corporate is on top, you buy a franchise you fall under the top...you pay a fee and a percentage of your sells go to corporate...its a pyramid structure...every store opened makes up the body of the pyramid...the scheme thing comes in with companies where only the top brackets make any money because the requirements, quotas, or whatever are too difficult to reach for the people in the "body" of the pyramid...

Ya lost me here.
I see McDonalds as this:
McDonalds Corporation
Franchises Franchises Franchises

I don't see other middle people here. Only the corp is getting a cut of your profits

Something like, Amway works like this doesn't it? A will be the top person. B is the next person in the line and so on. They all get a cut of E's profits. E needs to bring on more people to make $$.
--A--
B--B--B
C--C--C--C
D--D--D--D--D
E--E--E--E--E--E

Am I wrong with my thinking?

[OOhsoflyDELTA#9]

^^^^^^^^^^

true enough which is why I called it a pyramid structure...I used McDonalds only to show that theres a corporate on top and franschises underneath...I guess Mary Kay would be a more appropiate example of the trickle down effect in a pyramid structured business where a person can benefit from the efforts of the people that fall under them...I was only trying to point out that the mere structure wasn't bad, only the companies that make empty promises...at one point Amway made more cash money millionaries then any other company in the US but I don't know if thats still true...as far as their philosphy, I've actually never encountered anyone selling their stuff so I can't speak on it....

[cheerfulgreek]

Originally Posted by bluefish81

Ya lost me here.
I see McDonalds as this:
McDonalds Corporation
Franchises Franchises Franchises

I don't see other middle people here. Only the corp is getting a cut of your profits

Something like, Amway works like this doesn't it? A will be the top person. B is the next person in the line and so on. They all get a cut of E's profits. E needs to bring on more people to make $$.
--A--
B--B--B
C--C--C--C
D--D--D--D--D
E--E--E--E--E--E

Am I wrong with my thinking?

lol lol lol Nope.

[Koios]

Has anyone ever heard of Equinox? It was started by this crook named Bill Gould. I remember I got talked into joining this about 10 years ago. I was young, broke and stupid, but anyway it was a huge scam. Here's how it worked. They sold these supposedly health care products. Hair products, toothpaste, mouth wash, detergent, water purifiers ect ect. They even sold breath freshener. Anyway, the goal was to move up. In order to move up to the next rank, you had to buy $15,000 worth of products. First off before anyone calls me dumb as a box of rocks, I never stayed in it long enough to buy anything. But anyway you had to buy the $15,000 worth of products and then sell them. Then you would start getting money from the other people you brought into the organization. Same as Amway. One time they told us Bill Gould and some other scam artists were going to be speaking in Atlanta GA, and in order for us to go we had to pay $300.00 to see him speak. They told us that we would need to see him speak in order to be an effective seller. Now this is what was so crazy. I paid the $300.00, or so I thought. I drove down to Atlanta, but I never made it. My car stopped on me, somewhere in Chattanooga TN. I needed an alternator. I ended up finding a mechanic who fixed it. I had to buy the part, but he put it in for only $50.00. He told me he was a Christian and as he was putting the alternator in, we started talking about the Bible. This guy was one of the nicest people I had ever met. The bad thing, at 1st I wasn't uncomfortable, because these were complete strangers to me. On top of that, I don't know why, but my credit card was never charged. The money was available too, but I still don't know why it was never charged. I guess God was looking out for me. Listen to this. Once I became a member, they would tell us to make sure we're really into what the speaker was saying in the seminar so the new members would also take interest. They would say "sit forward on the edge of your chair and seem really interested." LOL. No lie. There's no way I could do that. They also talked about how much money they had, but looking at their shoes and attire, I couldn't tell. To make a long story short, I got out with no money spent. I'll try to find the info on Bill, because he got busted for scamming.

[Koios]

After making the #1 spot on the 1996 Inc. 500, multilevel marketer Bill Gouldd slid and folded in a settlement with the Federal Trade Commission.
Legacies
Equinox: Class of 1996
Multilevel marketer slides from top rank and folds in a settlement with the Federal Trade Commission...
...It also prompted Gouldd to file a $10-million lawsuit against the 19 former Equinox distributors and the company they joined, Trek Alliance.
A 10-month investigation by the Federal Trade Commission culminated in a trial that began six months ago in federal district court, in which prosecutors accused Gouldd of operating a fraudulent "pyramid" scheme. As part of the settlement, Gouldd (who never admitted to any wrongdoing) agreed to close Equinox permanently and refrain from working in the multilevel-marketing industry again. The settlement also called for liquidating an estimated $40 million in assets from Equinox and two of its sister companies and from Gouldd himself, with the proceeds earmarked for former Equinox distributors...
...The central charge was that Equinox was operating a pyramid scheme, meaning that it was selling distributors the right to recruit other distributors and rewarding them in ways unrelated to the sale of products to the ultimate users... April 25, 2000 Equinox International Settles Case with FTC, Eight States Nearly $40 Million in Restitution for Alleged Pyramid Victims - Federal Trade Commission Consumers who lost money investing in a pyramid scheme they thought was a legitimate multi-level marketing business, will share in as much as $40 million dollars under the terms of a settlement between the Federal Trade Commission and law enforcement authorities from eight states, and William Gouldd and Equinox International of Las Vegas, Nevada. The settlement also will bar Gouldd from any future involvement in any multi-level marketing scheme, for life, and requires dissolution of Equinox, Advanced Marketing Seminars, Inc. and BG Management, Inc. Gouldd and Equinox faced charges by the FTC and law enforcement authorities from Hawaii, Maryland, Michigan, Nevada, North Carolina, Pennsylvania, Tennessee, and Virginia...