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jadedog  ·  2697 days ago  ·  link  ·    ·  parent  ·  post: #thisisapyramidscheme

I can see this is #3 in trending on youtube right now, so I may be wasting my typing. If this were an entertainment site or a snark site, I probably wouldn't bother.

I'm not a fan of snark that glosses over the facts with innuendo. This is pure snark with no facts. MLMs are an easy target because they're annoying, but glossing over facts is trolling.

The difference between legal pyramid schemes and illegal pyramid schemes are that legal "pyramid schemes" sell an actual product while illegal pyramid schemes lack products all the way down the line. There are multiple court cases on this. The fact that the organization is hierarchical in structure doesn't have a bearing on the legality of the organization and implying that it does is just pure snark tactics.

Many other organizations work on this same hierarchical structure, even in pay distribution such as insurance companies. Managers take a percentage of their sales agents' percentage of sales. The person at the top makes the most money.

He's trying to make a big point of the woman who said the word "pyramid schemes" in her talk. He doesn't mention that she put air quotes around those words when she said them. She was just satirizing the people who claim that MLMs are a pyramid scheme.

His point about the math doesn't make sense. All he's saying is that not everyone is guaranteed to make money under this plan if everyone decided to do it. The fact that some people are making money disproves that it's not possible. While it is true that all products will hit saturation, the fact that many of these companies have been around for decades proves that there's money in it. Not everyone will be successful in it, mostly because of the high turnover of people required to keep people selling the product below that person.

That's also the reason for the over-the-top sales presentations. Motivating people to do something voluntary isn't an easy task. Like commercials, there needs to be an emotional sales pitch. Appealing to people's desires (and sometimes guilt) is no different than motivating someone through an ad.

The next part where he tries to prove that it is a pyramid scheme based on one company and a grammatical non-distinction of the FTC spokesperson is really weak. If it's a pyramid scheme as a concept, then all those businesses would be under fire equally, not just Herbalife.

The difficulty is that there are two pieces to the concept. There's the piece where there are actual retail sales with very low margins. There's also the piece where recruiting people becomes key because you can lock them into retail buyers and sell them unrelated merchandise. That piece is more pyramid-like, but the two pieces are often inseparable.

All the testimonials are personal experiences. None of them made claims that it would work for everyone.

While it's sad (and that's where this pitch is playing on the heartstrings just as much as any pitch of a sales opportunity), almost any business opportunity has the potential for loss of time and money.

The funniest part is that this attempt only shows how ineffective it will be in changing any part of the MLM business plan. That only shows how low the viewership of youtube is compared to the reach of the business. If it does actually make a dent, I'll be surprised and interested.

I used to read a forum that tried to share this exact same message. It is now virtually gone. It was ineffectual. The business model got the last laugh over the satirists, who weren't actually that funny.

I'm surprised that these same arguments are getting rehashed when the business models of some online activities like youtube and blogging, among others, have some basic similarities. Not everyone is guaranteed success. Success is based on social reach. Upfront investment of time and money can be high. Some people will get burned by that. Some other people will have an investment in making the opportunity as attractive as possible.

I guess I should state here that I'm not in any MLM business.