Posted 2010-03-06 07:36:15
 AsiaCheese, on 2010-03-06 00:18:54, said:
Not all pyramid schemes are non-businesses. One of them is called AIA (the fat money-producing ex-daughter of AIG). They have a scheme in which agent sell insurances, and at the same time -- in order to climb up the ladder -- have to acquire sub-agents (repeat from there -- endlessly). Agents receive a cut from sub-agents, the classical pyramid principle. But they also have to push, help educate and sponsor them. A certain number of sub-agents practically prevents the agent from acquiring new insurance contracts themselves (also: having exhaustet the greater circle of friends, that gets very difficult). If you don't climb up the ladder quickly enough, you get bashed over the head and moved sideways, which eventually results in no income at all anymore.
There were a lot of "buts" and "ifs" and "whens" in the story I heard from the lady who made some 300k bath in her first active year (wow), but now finds it difficult to even pay the gas for her newly bought car (let's just not mention the monthly payments for the deal on wheels).
Maybe it doesn't qualify for the term pyramid scheme in the strictest sense, but there's no lack of ruthlessness involved...
An insurance agent sells insurance and makes commissions. If she stops selling insurance because she can't find new clients, that doesn't make it a pyramid scheme. That's called being a sales person.
Posted 2010-03-06 09:22:07
they got one? (Office of the Consumer Protection Board)
BS nuff said on that but!
Stupid is as stupid does
Posted 2010-03-06 09:46:31
anotherpeter, on 2010-03-06 01:36:15, said: AsiaCheese, on 2010-03-06 00:18:54, said: Not all pyramid schemes are non-businesses. One of them is called AIA (the fat money-producing ex-daughter of AIG). They have a scheme in which agent sell insurances, and at the same time -- in order to climb up the ladder -- have to acquire sub-agents (repeat from there -- endlessly). Agents receive a cut from sub-agents, the classical pyramid principle. But they also have to push, help educate and sponsor them. A certain number of sub-agents practically prevents the agent from acquiring new insurance contracts themselves (also: having exhaustet the greater circle of friends, that gets very difficult). If you don't climb up the ladder quickly enough, you get bashed over the head and moved sideways, which eventually results in no income at all anymore.
There were a lot of "buts" and "ifs" and "whens" in the story I heard from the lady who made some 300k bath in her first active year (wow), but now finds it difficult to even pay the gas for her newly bought car (let's just not mention the monthly payments for the deal on wheels).
Maybe it doesn't qualify for the term pyramid scheme in the strictest sense, but there's no lack of ruthlessness involved...
An insurance agent sells insurance and makes commissions. If she stops selling insurance because she can't find new clients, that doesn't make it a pyramid scheme. That's called being a sales person.
But the manager receives a commissioned clip from the sales of their underlings so it is a pyramid in the strictest sense. However, AIA doesn't insist that you purchase product. This is even worse.
Any system that guarantees you a commissioned clip from your direct hires is a pyramid. I would also steer clear of any selling structure that compels you to buy product to be part of the group. Amway, Giffarine, NUlife and many others in Thailand whilst proposing to be MLM are pyramids. They aren't very sophisticated in Thailand and whilst the selling is easy enough to friends and family, it doesn't appear to be extremely heavy handed as it can be in other countries.
Studies have shown that in companies like these, the majority of sales are to new employees or sales people using the products themselves. Anything that uses this type of system is a con.
Posted 2010-03-06 11:55:45
My wife is selling products made by Mitchell KMC.
Is this also a pyramid scheme?
Posted 2010-03-06 12:04:49
May be in India Have More Than One Lakh Schemes like this and out of it 99% Fraud
Posted 2010-03-06 12:11:47
Thai at Heart, on 2010-03-06 09:46:31, said: But the manager receives a commissioned clip from the sales of their underlings so it is a pyramid in the strictest sense. However, AIA doesn't insist that you purchase product. This is even worse.
Any system that guarantees you a commissioned clip from your direct hires is a pyramid. I would also steer clear of any selling structure that compels you to buy product to be part of the group. Amway, Giffarine, NUlife and many others in Thailand whilst proposing to be MLM are pyramids. They aren't very sophisticated in Thailand and whilst the selling is easy enough to friends and family, it doesn't appear to be extremely heavy handed as it can be in other countries.
Studies have shown that in companies like these, the majority of sales are to new employees or sales people using the products themselves. Anything that uses this type of system is a con.
EVERY sales company in the world rewards managers for the efforts of thier staff (direct hires). That doesn't make them pyramid schemes.
The fraudulent schemes are the ones where most of the money made is from people paying to join, not from sales commissions.
Posted 2010-03-06 12:31:18
The life insurance distribution system has always been open to abuse. It is called churning. Agents with some companies could receive commissions at 50-100% of the annual premium in the first year. The commission in the following years would drop to a "service" commission of between 1 and 5%. In year 2 or 3 the agent would return to say, hey I found a better price on the annual premium and convince the client to switch carriers. Reputable life insurers started moved away from these commission formats years ago. Every client has the right to ask his or her commission paid on a policy. The commission can even be declared on the policy application with some carriers. Remember that the life insurance application forms a part of the insurance contract and that there is no coverage until the application is accepted and the premium is paid. If the agent is unwilling to disclose the commission, then seek out an alternative distribution point. An agent that earns his or her commission/fee will not be afraid to disclose compensation and to answer the question.
In respect to these pyramid schemes, I have little sympathy for many of the victims. The return on an investment is commensurate with the risk assumed. It should set off warning bells in any rational person's head when returns of 20%+ are promised in a market where base rates are hovering near 2%. People are indeed motivated by greed. However, there are also those, particularly the elderly that are put into these positions by their children that do not manage the parents money properly. there are also a great many elderly ladies that have to deal with the results of a stupid husband's poor choice of investment. These are the people that need to be protected.
Posted 2010-03-06 15:28:43
ignis, on 2010-03-05 06:06:02, said: Pyramid Schemes
What is it?
Is every Business that sells a product to another, then they sell it and so on, down level after level a Pyramid Scheme ?
No is the simple answer,
In UK BT sell there phone lines direct + sell to other companies that have agents then come knocking + or and advertize, all the different home phone companies, still use the BT phone line..
Insurance Companies here and most places in the world do the same, Kleen-Eze, Amway, Avon, Tupperware... the list is endless
I think lots of people get muddled, I was told years ago that a Person/Company that sells a product is not classed as Pyramid Scheme..
It get confussing, Take Honda, Private people open a garage/Showroom and sell Honda cars, they have people selling cars many on Commission only, when I boubht a new Honda here I was also given a list of what to say to friends and if I got someone to buy a Honda then I would receive 10,000 baht, for each car. It is the same thing is that Pyramid Selling ?
Pyramid selling, as I understand it is:
I join the "club" and have to pay - say 10,000 baht, but I am also required to recruit lets say another five members of the "club". I receive say 25% of their 10,000 baht so I have already made 2,500 baht. They in turn are required to recruit five members each to the club and I might receive say 20% of their 10,000 baht giving me a return of 10,000 baht and so on.
The other method you mention is more commonly known as Network Marketing. The Company has one or more products to sell. I join the Company, but to become accredited I need to sell say 50,000 baht of product. I am then allowed to develop my own Team or Teams as a result of which I manage them and receive a % of their sales. Likewise they need to sell say 50,000 baht of products and then can also be authorised to set up their own Team or Teams. Your Team Members are often called "Down Liners", because they are directly descendant from my management line and likewise, their Teams become their "Down Liners". As I am further up the chain of management, I am termed as an "Up Liner". As before, I receive a descending % of the "Down Liners" sales and the further removed they are from me, the less % I receive. Some of the better Companies get the "Up Liners" to hold teach-ins to both teach their people about the products, sales techniques, how to place orders and the Company administration system etc. Some also have some very catching incentive schemes like if you achieve a certain level they will lease hire something like a Mercedes SLK and on up to Porche 911/Massaratis etc. In a Country like Thailand which is overtly status orientated (face), this as you can imagine is highly popular. You effectively end up running your own direct sale business. You end up working as much or as little as you want with the financial rewards depending on your direct input. A few of the Net Work Marketers are earning incredible sums of money and you can effectively stop working and still be receiving an income because your "Down Liners" are still working. An interesting concept, but unfortunately has been tied in with the Pyramid Sales label.
Hope that helps?
Posted 2010-03-07 08:54:26
YanTree, on 2010-03-05 16:33:47, said: "Greed...is on the rise" 
My exact thought. I guess I am just so naive b/c I thought it could "barely" get much higher in LOS(Land of Scams). Guess I was wrong. Oh my FACE!!!!! lololooll
Posted 2010-03-07 10:27:40
YanTree, on 2010-03-05 17:22:37, said: Garry, on 2010-03-05 16:48:03, said: YanTree, on 2010-03-05 17:33:47, said: "Greed...is on the rise"
I remember one time in Chiang Mai, I was sitting at a bar and this western guy (who I don't know from my next beer) sidles over all chummy like. Talks the normal bar BS to me for half an hour or so then he hits me up with an investment scheme. I started laughing my head off and politley told him to try it on someone else, I'm not interested. Then the prick takes offense because I wouldn't hear him out. I ended up finishing my beer and walking out. What part of 'no I'm not interested' didn't this guy understand.
The same part the touts at the end of my street don't understand when I tell them I don't want a sexy lady or a massage even though I have been saying no to them every day, multiple times a day, for several years.
In many forms of sales your job is to keep asking until they hang up on you (or walk away) - because some small % of people will change their mind if they keep pressing.
I hear that. I once took a tuktuk to see what CM Muy Thai had to offer, but was taken to not one, but two brothels in a row against my wishes.
Some would try to sell tap shoes to dead men if they somehow believe they can turn a profit. Both greed and slavery seem to share a rise around the world. O my brothers.
Posted 2010-03-07 14:23:02
ignis, on 2010-03-05 18:06:02, said: Pyramid Schemes
What is it?
Is every Business that sells a product to another, then they sell it and so on, down level after level a Pyramid Scheme ?
No is the simple answer,
In UK BT sell there phone lines direct + sell to other companies that have agents then come knocking + or and advertize, all the different home phone companies, still use the BT phone line..
Insurance Companies here and most places in the world do the same, Kleen-Eze, Amway, Avon, Tupperware... the list is endless
I think lots of people get muddled, I was told years ago that a Person/Company that sells a product is not classed as Pyramid Scheme..
It get confussing, Take Honda, Private people open a garage/Showroom and sell Honda cars, they have people selling cars many on Commission only, when I boubht a new Honda here I was also given a list of what to say to friends and if I got someone to buy a Honda then I would receive 10,000 baht, for each car. It is the same thing is that Pyramid Selling ?
Most of the so called legitimate sellers who work on commissions structures and compensation plans are simply sophisticated Pyramid Schemes. Yes they DO have a product or two and YES they are way over priced.
Do the maths on the way the commissions are structured and realise they can't pay out %ages like 50-60% without having LOADED the original price. The NuSkins and Amway's have been successfully doing it for years but the people who get sucked into these schemes do not realise the pricing is far above retails. Once product leaves factories or warehouses of these MLM companies they simply have already made their profit. You as a 'distributor' get commissions on top of their profit structured into their pricing structure.
Cosmetics cost zilch to make and sell for stupid money - 10 cents of ingredients and sells for 30 dollars to some consumer who feels they look better because of that product and yes some are good, but way over-priced. Take water filters from Amway at around 30,000 Baht - you can buy them for under 15,000 or less at any retail outlet but the over pricing pays the margin split to the poor fools who sell them. YES it makes money.
But under these quasi legitimate MLM schemes, when you fail to reach certain levels or minimum monthly volumes, your 'business' rolls over you to the man above and you start again (if you are that stupid). Nu Sin is notorious for that ploy.
These companies have been doing this for ages and yet they can still recruit members and sell a 'business in a box' to get suckers started. Glitz, glamour and bordering on fraud. Caveat Emptor - let the buyer beware...
But a TRUE Pyramid scheme is when a seller sells nothing or 'an idea' for cash and then on reselling the same idea, pays commissions from the next 'investor. Madhoff did this! Boiler rooms in Bangkok sell shares that don't exist and simply close when the heat is on. People invest their savings and it simply evaporates. Commissions get paid to 'coolers', 'openers' and so on and usually around 50% of monies collected and then the owner shuts the 'room' and simply opens another. Same brokers, different name and so on. Philippines, Cambodia and Thailand are rife due to lax laws to protect consumers.
Pyramids have been around for years like the "Plane Game" where you buy a seat from passenger to Pilot. After you collect from the pool you simply rise to the top and drop out as the pilot and earn from other people buying 'seats'. There is no product and never was! 
Posted 2010-03-07 20:54:56
Quick Ways to spot an MLM (Multi Level Marketing).
1. a. A person you don't know wants to become your best friend.
It's like hitting on a girl in a bar,
but they approach you in an airport or grocery store.
b. A person you know very well just discovered a great way to make a ton of money.
2. The salesman is furtive, very careful to be totally polite and cheery.
They will do anything to avoid answering the question,
Is this an MLM?
Well, No actually, it is networking, it is membership, it is anything but Multi Level Marketing
3. The product is some obscure purpose miracle deal...but always overpriced.
It is always something you can live very nicely without...they sell mainly the sizzle.
Something that the claims are difficult to prove don't work.
Fuel additive tablets
Odor elimination spray
3-D Camera
4. You are asked for money in order to be able to sell this amazing product yourself.
Yes it costs $300 to join, but as soon as you sign up 5 of your friends you get it all back.
And you will sell a lot of this product to people all over town.
But the big news is that you get 10% of everything those 5 friends sell too....this really adds up!
5. It preys on friendship and family...
Sign up your Mom, she knows a lot of people.
If a friend approaches me with an MLM, I say straight up,
Sure wish my friendship was important enough to you,
that you'd never think of asking me to join an MLM with you EVER again.
Yes, they act offended, because it's vital that they enlist family and friends,
depending on friendship to cover their gross encroachment on that tie.
If that friend declines, it's another lost prospect, and he only has so many friends.
It's kind of like the lottery, but in the private sector...
a tax on people with poor math skills.
It is a huge favor to your friends to slam them very harshly,
the first time they try an MLM on you,
because you will save them the humiliation of asking another person
and wasting their good name on a fraud.
Proposing an MLM is the same as telling your smart friends you are an idiot.
Only your dumb friends will believe you,
and if your smart friends don't give you an answer,
it's because they just wrote you off as a prospect for future friendship.
Afterward, you will have only dumb friends.
Friends don't let Friends do MLM!
Posted 2010-03-07 21:16:10
WatersEdge, on 2010-03-07 20:54:56, said: Quick Ways to spot an MLM (Multi Level Marketing).
Is MLM the same as Pyramid schemes? I don't think so.
Everyone can make money out of MLM, if you can sell. If you're not a salesman then you can't sell anything whether you are paid a salary in a retail store or are in MLM.
If MLM is selling actual product, then it comes down to being a salesman. If you can't sell, you can't make money. That doesn't mean the MLM is bad (yes, there are bad ones that dump you if you don't meet there very high expectations).
The fraudulent pyramid schemes are the ones where the sole aim (and the only way to make money) is to get other people to pay to join.
Posted 2010-03-09 08:44:58
There has been mentioned some companies here in the context of Pyramid schemes. I do not know of the others, but I do not see Amway as a pyramid scheme. I do not like the way their products are sold and the way they gather in conventions like some religious gatherings and so on, its all very silly and I would be much happier if the stuff was sold in shops. As I understand there is a pyramid like structure of the dealers, but there are actual products being sold and actual profits are made.
On the other hand I like their products enough to tolerate buying the stuff from my Amway acquaintance. The core products are really good stuff, Everything is organic like the vitamins, Protein powder, Toothpaste, water filter etc.. The cost is usually higher than comparative shop items, but last about 3 - 4 times longer due to no fillers in the product.
I do'nt care for the cream and makeup rubbish which is not really the core but has been added because Thai people are crazy about external care rather than internal.
Posted 2010-03-09 08:57:40
anotherpeter, on 2010-03-06 06:11:47, said: EVERY sales company in the world rewards managers for the efforts of thier staff (direct hires). That doesn't make them pyramid schemes.
The fraudulent schemes are the ones where most of the money made is from people paying to join, not from sales commissions.
Guaranteeing a clip to the person who hired you is very different from incentivising you to manage people. Paying the person for hiring you is also a big no no. Compelling them to purchase stock of products is a red flag too.
Of course people are incentivised to produce, however, another part of the issue is whether the person who hires you discloses at the very beginning that they are going to get a direct clip on your ticket. It is theoretically possible to make a wonderful living from many of these systems by selling nothing yourself and simply hiring more and more people and that is a pyramid.
I know that wikepedia isn't 100% but on this it is close enough.
http://en.wikipedia....level_marketing
Quote Because pyramiding (getting commissions from recruiting new members including "sign-up fees") is illegal in most states,[14] to remain legitimate in the U.S. a company that uses multi-level marketing has to make sure commissions are earned only on sales of the company's products or services if they cross state boundaries. If participants are paid primarily from money received from new recruits, or if they are required to buy more product than they are likely to sell, then the company may be a pyramid scheme, which is illegal in most countries.
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