This IS WORTH debating about. Pyramid Time Folks.

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Pyramid scheme - Wikipedia, the free encyclopedia

Okay, lets be mature in this conversation. Pyramid systems, illegal right? I know they are, and I've seen many shut down by the feds especially here in the United States of America. I just had a guy on skype try to convince me otherwise lol, but I want YOUR opinion so others can watch out for this nonsense.
#main internet marketing discussion forum #debating #folks #pyramid #time #worth
  • There is nothing to debate.

    Pyramid schemes are illegal, and are mathematically doomed to fail. You gave the link.

    The difficulty isn't knowing that, but determining which so-called business opportunities are actually disguised pyramid schemes.
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  • Here where I am (Kenya), pyramid schemes were BIG in about 2008. Billions of dollars were scammed off people. I know some people who re-mortgaged their homes to put money into the schemes and were burnt when their cheques started bouncing.

    Luckily I personally was not caught up in it through a little luck and a little prudence. My simple key is, "if it is too good to be true, it probably is". It's not an original phrase, but it has worked for me.
  • Now maybe I am about to stir up the hornet's nest here, but what do you guys think about Empower Network? Is it pyramid? Seemed like one to me, I just can't make up my mind though.
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    • Yes Empower network seems to be the talk of the town, all the big marketers are launching their products based on empower network.

      Recently i saw 5 Minute Mogul and two days ago shakir husseyin launched something as well.

      So it's a starting point of pyramid, as you know pyramid schemes work in start and as it grows, the problems start to arise.

      So if you want you can get in empower network and make some cash but don't base your business around it.

      Thanks

      Tumbi
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    • Banned
      That one is kind of obvious considering all they do is talk BS (money talk) on the Home page of the site. They're selling hype.
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    • It is not a pyramid scheme,some pople think it is but I know it is not. Because how can something be a pyramidscheme when the products can help people be successful in any business,and the basic product is of course a blogging platform,

      Otherwise i certainly agree that pyramid schemes are illegal.
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  • Illegal - clearly this guy was trying to scam you.

    Multi-Level Marketing or Network Marketing is fine, Ponzi schemes are illegal.

    If there was something for sale, other than buying into the scheme then it might be okay, if not, then it's a Ponzi.
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  • Multilevel systems do work if you get in the system from the beggining, pyramid schemme are illegal

    Even these 2 systems are similar in shape they are totally different in te way they work.
  • Banned
    [DELETED]
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  • Well talking to this guy on Skype, I called him out on it, Ive had friends get burned on Pyramids. He was like, but wait sir, you cant walk away from good money. I said..No...I can walk away from BAD money. What a push over.
  • If you think about it, every big business in America is a pyramid.

    Think about the last bag of potato chips you bought at 7-11: Some chip company made them and sold them to a bunch of distributors. Each distributor sold them to a bunch of warehouses. Each warehouse sells to a bunch of stores. Each store sells them to a bunch of customers. It's a pyramid.

    "Only the people at the top make any money". Same thing in every business. Do you make as much as your boss, or the owner? Think about somebody stocking the bag of chips at a grocery store. They don't make as much as the Grocery Manager who doesn't make as much as the Assistant Store Manager who doesn't make as much as the Store Manager who doesn't make as much as the District Manager......

    It all comes down to the product being offered. If the product being offered is the chance to make money offering the chance to someone else, it's going to fail. And, is the product worth the money.

    I am not in Empower Network, but the product they offer seems to make it legal. If the person at the bottom of the business organization is happy paying $25 a month for a system to blog on then there is no problem. There has to be a final consumer somewhere, just like the bag of chips. If you go to 7-11 and buy the bag of chips with the hope of selling them to someone else you will probably be very disappointed and quit the potato chip business.

    Just my thoughts, your mileage may vary...
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    • Well that's exactly the problem. If people are only buying the product because of the opportunity, then there is the problem. The product is just cover for a money shuffling game. And the last reps are mathematically doomed to fail.

      It's not the same as potato chips example, because with chips, people do buy chips for reasons other than to resell them. They buy them to eat them!

      Now the first issue with empower, is anybody buying the blog for it's own sake? Or are they only buying it to become reps to resell to others? If less 50% of people buying the product are retail customers, that is people not in the bizop, I'd say they have a major problem.

      The issue
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    • Great post. Good enough to mislead and distract atleast a bunch of readers of this thread..


      But below is a good example of a "REAL" business.


    • That is flat out WRONG, and hopefully you KNOW that!

      WRONG! Not everyone will make chips. They won't sell to everyone. Even the STORES are LIMITED. Startup costs and all. And WHAT are they selling? The business? ****NOPE**** They are selling CHIPS! You want chips? YOU must source and prepare, or BUY! and if you source and prepare, it can get to be very expensive unless you go to a STORE to buy goods.

      WRONG! The head guys put out a RISK! The guys at the bottom get paid the same even in hard times.

      Well, where I work, I COULD easily make 4 times as much for the same job. I DON'T! WHY? Because THIS way I get paid even during hard times!

      EXACTLY!!

      That's fine, as long as they aren't limited or promised a huge income, etc....

      Steve
    • As Mark Twain is credited with saying, the difference between a word and the right word is the difference between lightning and a lightning bug.

      Or, in this case, between a pyramid and a pyramid scheme.

      Yes, every big business' table of organization is narrower at the top than at the bottom. And some might say that CEOs making 7, 8 or even 9-figure bonuses while a company loses money is a legalized form of theft.

      But to categorize all businesses with triangular-shaped organizational structures with illegal pyramid swindles is silly...
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  • i have a multi level marketing idea that is solid (no cash investments needed, just buying a very cheap product and no its not my product nor it has anything to do with Pyramid schemes) and people can earn a lot of money. i will earn 4 times what they make.

    ive talked to people and got around 20 people interested but they were so lazy and didnt do a good job of inviting more people.
  • Let me tell you a little story... many years ago I got a call out of the blue from a cousin of mine, asking me to have lunch with he and his wife. Now, these two hadn't bothered to contact me in years, so I was curious as to why suddenly out of the blue, here they were asking to have lunch. Imagine my surprise when after a nice lunch, they launched into a recruiting pitch for what amounted to a pyramid scheme (IMHO) -- not naming names here. They sat there reeling it off with glassy eyes and these odd smiles...I had this overwhelming temptation to grab them each and check the back of their necks for a protruding alien symbiant or some such .

    I always judge a pyramid scheme by how people talk about it. If they sound like cultists, then I assume it's one .

    Regards,
    jim
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  • Banned
    It is, but such discussions are held here almost continuously.

    At the moment, there are two active threads discussing exactly the same question.

    Here they are ...

    http://www.warriorforum.com/main-int...ting-help.html

    http://www.warriorforum.com/main-int...-warriors.html
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  • My understanding is that in a pyramid, there is always someone who is losing out - until they pass on the "losing out" to the next poor guy.
    Not legal and not moral.
    Multi level is a bit different - but people tend to go "no thanks" more often than not from my experience - it all has a bad taste from the days when pyramids were big.
  • The potato chips example is just irrelevant and is nothing like a pyramid scheme at all.

    The last person who ends up with those chips get to eat them and gets value from those chips. The last person in a pyramid scheme always gets nothing and misses out. That's one of the defining factors of a pyramid scheme. If everything stopped tomorrow the last person would miss out and have not received value for their money.

    The other defining factor of a pyramid scheme is that the product/service being sold would not stand on it's own two feet and be as valuable if the opportunity to resell it was not there.

    So ask yourself this question. Would you be joining any of these networks if the opportunity to resell them on to others did not exist? If the answer is no then you have more than likely stumbled upon a pyramid my friend.
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  • My parents fell for quite a few pyramid schemes already. Luckily they didn't invest too much cash but it was still a loss.
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    • Pyramids are illegal. I personally hate them. There are so many of them, so people fall for them and having a big losses.
      They are such a big issue, so people are scared to join not only genuine MLM businesses, but IM businesses as well.
      And for some reasons those scams are more attractive that normal businesses. They offer better income, easier way of getting it and people fall for it easily.
      Empower Network looks suspicious to me this may be for a reason, or may be just because me too suspect every thing that I can not check.
      However if business can not be checked I am getting even more suspicious that it is a scam.
      Real business, what ever it is never easy. You have to work and make sales, no matter if that is offline business, IM or MLM in order to be paid. Business should be registered and pay taxes, same as you as a seller. And if fact every genuine MLM company would request your Tax ID (or what ever it is called in that country) in order to register as affiliate. If they don't, then there is something wrong there, because that is a legal requirement and can not be ignored.
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  • Pyramids are deff illegal. MLM's are not. I remember talking to a P.H.D marketing professor at a university and I asked him about this. I forgot what he said exactly, something about one level markets certain products second level markets other products funneling into 1 product...I can't really recall on exactly what he said.

    But to end this mlm vs anti-mlm...Weather you are pro mlm or anti mlm either way your right!
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    • You mean like an up-sell?
  • Pyramids are illegal unless the government operates them. Then they call them names like Social Security, National Health and the Federal Reserve. Those are a few that come to mind but there are many more. And unlike private enterprise pyramids the government can pass laws that force you to participate.
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  • SORRY FOR NEBIES QUESTION BUT CAN ANYONE TELL ME WHAT ARE PYRAMID SCHEMES? Till now i know only about LINK PYRAMIDS.... LOL
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    • Fake businesses...
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    • As I understand it, a pyramid works as follows:

      Lets say the pyramid charges a joining fee of $20. You pay your $20 to the scheme. You are on level 1. You then recruit others to join. When you persaude someone to join (level 2), you get $10 of their $20 joining fee.

      When they get someone to join (level 3) the person you introduced gets $10 and you get $5.

      When level 3 gets someone to join (level 4), level 3 gets $10, level 2 gets $5, and level 1 (you) gets $2.50

      So basically, the money is halved as it goes up the pyramid.

      The sales pitch usually runs along the lines that if you introduce 2 people who each introduce 2 people who each introduce 2 people ... and so on, by the 20th level or so you will be a millionaire.

      But they forget to tell you that you will also have recruited 3 x the population of the planet

      I think there are lots of variations on the theme but that's the general idea.

      MLM (multi-level marketing) is a similar idea, but instead of paying a fee to join the scheme, you buy a product.

      Some of the dodgier MLM schemes are run like cults from what I've read - i.e. they gear it towards newbies being able to make money quickly to hook them in, but then they make them feel like failures when it dries up and persaude their members to pay for expensive training courses etc.

      btw I'm no expert on this field so please feel free to correct me
  • Banned
    Regarding MLM and pyramid schemes:

    There is nothing to debate.

    There is only what you want to see.

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    • Can't help but think of something similar to your picture here...



      Do you see the above statement as a positive or a negative comment?

      This actually shows a person's perspective on life by what they think the above run-on actually says.

      I was recently introduced to an opportunity to sell coffee! It sounded great, and the coffee was supposedly better than Starbucks and for less than half the price. But something didn't quite sound right with me, even though it had not just a product but a product that people would have to return in order to buy again and again, since it was a consumable.

      So I started to bargain-hunt. Here's what I mean.

      The product had a certain wholesale level, and you had to buy in to get the starter kit with the first wholesale product purchase and some training aids. Sounds OK, as you are supposed to only be able to get the product at wholesale through your local distributor people through their system and then sell it at the retail price to the public.

      Now I don't know about you, but I like to bargain hunt on eBay and Amazon. And when I went there, lo and behold I found people selling the product at the wholesale price without my having to buy into the whole system and become a distributor and make the big up-front payment. Both on eBay AND on Amazon. And yes, I could just buy it from them...a couple of their distributors had set up Fulfillment By Amazon!

      This showed me that while this coffee might be a big seller, somebody was having trouble meeting their monthly minimums in order to stay at a certain level, likely the level that pays additional money or covers the car payment that was shown in the video shown at the first meeting I went to. (In the applicable video it was supposed to be a Mercedes 600 series S Class, by the way...)

      So even though this MLM or network marketing thing might actually be legit, it started to look more and more like I would likely have problems selling it myself, because others were already having problems selling the stuff without bending the rules...

      Do you want to invest in a network marketing system where some of the product sellers are having an obvious hard time keeping their sales levels up?

      I know I didn't! So for me even though the product could have been legit, in my eyes it was a "pass" as far as the opportunity was concerned. And when it comes to the coffee, the product was OK, but it wasn't going to change my life if I started to drink it!

      Because if the product is being sold to the public at the wholesale price, then that wholesale price is not a real "wholesale" price and the so-called retail price is inflated.

      And that's hazardous to your wealth even if the coffee is not hazardous to your health, LOL.

      So what does this have to do with that Empower Network, you ask?

      Everything!

      Because you see, if they are selling the ability to build a blog for $25 per month, then the product is priced unrealistically high. And when your downline customers realize that they can go to Hostgator or BlueHost or some other web hosting company and possibly buy the ability to create an infinite number of blogs by setting up a webhosting reseller account for that same $25 or possibly even less, they are likely to become dissatisfied customers if they have not also signed on for the opportunity part.

      So the fact that you can create a blog sounds more like a smoke screen to distract from the opportunity part just enough to attempt to duck the FTC and other government regulatory bodies by saying "But we offer them a PRODUCT."

      And believe me, the FTC does not take kindly to finding a smoke screen when a legitimate product should be in its place...

      What a lot of people do not realize is, what happens to everyone involved when a pyramid scheme AKA Ponzi scheme is unwound when the thing fails. If you want to know, you can look up Bernie Madoff and see what happened when they went to recover for the people who lost out.

      Believe it or not, some people actually made money with Madoff. And they took their profits and then some of them actually left Madoff before the whole thing came crashing down at the end.

      Life for someone who does good up front in a pyramid scheme can end up being worse than those who lose out when they join near the end. Why? Because when the government or other asset recovery agency goes out to attempt to make things right, they come after those who have profited from the Ponzi. In other words, those who made money and withdrew the profits (and likely spent them) and brought others into it who later lost out. That means that even if you don't lose money from the Ponzi itself you could find yourself losing money at the end due to the clawback powers granted the recovery agent or trustee!

      Another thing that is unique when some alphabet-soup-lettered US government agency goes after people is, they usually will seize company records to get a list of ALL CUSTOMERS and send out a letter to each and every one of them informing them that the thing was determined to be a scam and to encourage them to file complaints and seek to get their money back, EVEN IF THE PRODUCT IS LEGIT AND THE CUSTOMERS ARE SATISFIED. And let's face it, under those kinds of circumstances people will likely file to get their money back even if they used the product and it benefited them, all just because some government agency said they are ENTITLED to their money back.

      So even if the product seems to be legit, there are dangers in getting involved in something that can later be determined to be a pyramid scheme, if for no other reason than the potential for clawback to return money to those who may have lost out later.

      Not exactly the safest way to grow your wealth!

      Just my two dollars (inflation, you know?).

      (Plus, you guys know IANAL and all, right? Don't even play an attorney on TV!)



      EDIT Almost forgot!

      OPPORTUNITY IS NOW HERE sounds a lot better than OPPORTUNITY IS NOWHERE, but the letters above can be used to spell either one...some things are all about your point of view in life!
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  • Well, of course pyramid schemes are illegal here in the U.S. - nothing to debate there, it's the law. Asking the question if they should be illegal is another question. I've seen good and feedback about Empower (and MLM, in general). Good, healthy debate thread. Thanks for posting!
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    • pyramid schemes was outlawed in th 80s, as long as you have a product and a company your fine
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  • Ponzi Schemes and Pyramids are basically the same thing.

    You are spending money with no product involved. You can get a return on your investment by recruiting others into the scam er scheme.

    Many years ago (I was in my teens), I got a "chain" letter. Basically it was a list of 10 people, with their names and addresses. The letter explained it was a magic letter that would give me riches beyond my wildest imagination.

    I was to send $2.00 to the top person on the list, make 20 copies, and remove the top person on the list and put my name on the bottom of the list. Then send out the 20 copies to people I know. all I had to do was wait...and the money would come rolling in.

    I was so excited, I showed my Dad and told him I was going to be rich...
    "Don't be an idiot" he explained..."these chain letters are totally illegal. Plus he said you will never make any money from this. It is a fraud and illegal."

    I followed his advice. And I'm glad I listened.

    When I first got online, I got lots of email "chain" letters explaining the same thing. These emails were cleverly disguised scams, all had different explanations of why the system would work. Except this time, you could use your Paypal address, and never send any money. And the money would flow in... RIGHT...

    SCAM!!!

    About 7 or 8 years ago a friend came to me urging me to get involved in his "Investment Club". Only $5,000 to join. You show up at a meeting and invest your $5,000 cash with other people at the meeting..."You have the possibility of turning that $5,000 into a $100,000 overnight..." he explained. Thank God I remembered my Dad's advice.

    I saw my friend the next week. He was extremely upset. He had lost the entire $5,000 in cash...He ate the whole thing.....

    SCAM!!!

    I know very little about Empower Network, (I am NOT affiliated with them) but I do know you pay $25.00 per month and you get a blog. So in my view, you are getting something. They are not a Ponzi Scheme or Pyramid.

    But for me, I can set up a dozen blogs for $25.00 per month. So for my money I am not interested.

    MLM's can be legitimate businesses and a lucrative business model...But like anything else:
    "Buyer beware!" (Here is a legal definition: caveat emptor)

    Many many people fall for Ponzi's and Pyramids....A lot of it has to do with wanting to get unrealistic returns on investments. The best TV show which shows this in action is: American Greed...

    And don't forget...if something appears to good to be true...it probably is...
  • So, since there's no more need to debate about whether pyramid schemes are illegal or not, and if MLM is legitimate or not, can we now request the admin to close this thread before some "anti-MLM" air their negativity here?
  • The biggest pyramid scheme is Social Security. It will be devastating to millions and millions.
  • just so we all know, by pyramids do you mean empowered network. LOL.

    Just saying, someone had to ask. LOL
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    • And/or the "pro-MLM" make sure their sig (and opportunity) is present and displayed? :rolleyes:
  • My advice to us is DONT GET INTO ANYTHING THAT EVEN SOUNDS LIKE A PYRAMID!

    I was involved in one called Zeekrewards which you probably have heard about. I was so convinced I even started a google ppc campaign to get people to sign up under me! Sure enough the thing crashed and me and my family lost around $3,000!
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  • 62

    This IS WORTH debating about. Pyramid Time Folks.

    Pyramid scheme - Wikipedia, the free encyclopedia Okay, lets be mature in this conversation. Pyramid systems, illegal right? I know they are, and I've seen many shut down by the feds especially here in the United States of America. I just had a guy on skype try to convince me otherwise lol, but I want YOUR opinion so others can watch out for this nonsense.