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[Foggy Bottom]

mythBuster, on 2010-03-05 17:01:43, said:

One of the biggest sponsors of de Democrat party made his money through a pyramid game, fled to London where the opportunistic British government welcomed him and his enormous fortune. Pyramide schemes are only banned in Thailand when they hit the elite by accident. If you look at the business structure of companies like NU Skin, Geffarine, Amtrac or others you realize that Pyrmaid relates schemes are an accepted marketing strategy in Thailand.

I think you are confusing multi-level marketing with pyramid schemes.

The British Office of Fair Trading and Trading Standards Department's regulations include (paraphrased from memory) that -

A multi-level marketing program is legal if it -
- promotes a genuine product (tangible or intangible) that has genuine marketable value as a product for resale and requires the sale of that product as the primary means of income for the sales person.
- includes the opportunity for the sales person to acquire a level of sales where they purchase direct from the producing / supplying company instead of their upline sales person.
- provides the bulk of the full price discount to the person actually making the sale to the consumer / purchase from the company (whether through upline or direct)
- requires no purchase of product stocks other than minimal samples for demonstration to customers
- requires no more than GBP 25.00 "membership" joining fee which must include a suitable provision of product samples.

A pyramid marketing program is illegal if it -
- requires large value investment in product stock that the "member" cannot return to the company for refund
- requires a membership investment greater than GBP 25.00 for which no tangible product is provided whose retail value is equal to, or exceeds, the membership fee
- involves the sale of informational products, newsletters, or circulars only - products of this nature may only be sold direct from the company creating them, and must include an offer of instant cancellation of any subscriptions, with refund of any subscriptions within the first 30 days of membership.
- involves transactions where the sole financial transaction is payment of, and commissions for, membership fees for recruiting new members.


Some of the world's largest companies are involved in legal multi-level marketing - Dorling Kindersley Books for example, or Amway and Avon for cosmetics and cleaning materials. All forms of manufacture-distribution-wholesale-retail based supply chains are multi-level marketing (though of a price mark-up rather than price-discount format). The old style mail order catalogues - Sears, Littlewoods, Grattans etc, were forms of multi-level marketing. Modern Internet-based affiliate marketing is a form of multi-level marketing based around supplying advertising real estate on websites. Agencies like Adbrite and Commission Junction are the upline salespeople taking a slice of each sale your hosted advert generates.

Chain letters and the like (and their modern equivalent via email) are pyramid selling, generally scams.

Pyramid selling is an emotive and often abused term - too many people are too quick to label too many perfectly good and legal programs with that name. In the 1990s I made good money selling high quality men and women's fragrance products (aftershaves, colognes, perfumes, body care etc.) under a multi-level marketing program, and never once had to buy "for stock" - only to supply customers or myself. I did quite well with DK's children's books too. And my then wife did moderately well with Avon. Nowhere was there the scam element of only getting income by signing up other people. In fact we were pretty pish-poor as recruiters and made almost all of our money from our own direct selling activity.

Please educate yourself regarding such topics before making raging generalisations. I'm not sure about Nu-Skin, which I think would possibly fall foul of the British rules, although it seems to run more akin to a franchise with mandatory shop and product stock holding requirements. Franchises themselves are a form of multi-level marketing too - with franchisees buying their product from the franchising company - think KFC, McDonalds, Pizza Hut etc.

It's a much bigger sector than most people realise, and only a small / tiny segment of schemes fall under the illegal variant of pyramid selling.

Foggy

[vicco]

Don't be too hard on Pyramid schemes.... Egypt had one thousands of years ago and look how successful it turned out.....still pulls in billions a year in tourist revenue...

[YanTree]

Quote

^^^ never heard of Amway, really??

He said Amtrac, not Amway.

Amway is perfectly legit in the USA and I'm sure a lot of other countries. That one gets paid a commission for those they signup under them doesn't make it a 'pyramid scheme' - where the line is drawn is whether most of the money comes from products or from fee's you pay to join. Amway actually sells a lot of product, so it's ok.

Are there legit businesses in Thailand which are operating under a system that would not be allowed in the USA? I.E. most of the money is from the initiation fee's?

[Acharn]

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.

Hey, it's just like selling insurance. You have to be persistent. Do enough cold calls, keep it up, learn the tricks to keep pitching the sucker... the prospect even after he's started saying no, and you'll make a good living. Don't take "no" for an answer. Some people can do that and still live with themselves, because it's not a matter of offering a genuine value, it's about getting people to give you money.

[yllorco]

A pyramid scheme is simply a fraudulent scheme in which people are recruited to make payments to the person who recruited them while expecting to receive payments from the persons they recruit; when the number of new recruits fails to sustain the hierarchical payment structure the scheme collapses with most of the participants losing the money they put in.

[j_mack]

eljeque, on 2010-03-05 18:23:21, said:

Amway, not Amtrac, but absolutely right you are.

''SCAMWAY'' not Amway as decribed on Oz TV tonight, it on the Rise [nose] again

[richieudon]

You don't get nuffink for nuffink.. when will people learn?

[Brewsta]

YanTree, on 2010-03-05 18:33:47, said:

"Greed...is on the rise"

Encroyable......such stunning Journalism or is that Yawnalissom? Complete waste of ink.

[thurien]

paully, on 2010-03-05 17:34:10, said:

I think one of the reasons why these sorts of schemes appear to thrive in Thailand is the Thai social structure itself. Family members and 'friends' can easily bring pressure on individuals to invest and the whole loss of 'face' thing comes into play, they just find it very difficult to say no or to change their mind and go back on a 'promise' of cash even if the scheme looks hopelessly dodgy.

absolutely right here; it should be added that this kind of social / family- type / "amongst friends" pressure has been the success also in Western countries: "tupper ware parties", cosmetics marketing, diet products, home fashion shows and the like

[andyptrav]

The largest pyramid schemes that will fail in the next 10 years are western governments. If you expect to live off a government paid pension outside of this period then think again and make alternative plans.

Western politicians will not even acknowledge let alone deal with the problems, they just kick the can and line there own pockets.

In the UK the interest on government borrowings is now over £40 billion a year which is more than the £32 billion we spend on defence - one of the few things any government should be actually engaged in - this is nearly £600 a year for every man woman and child in the country (officially not actually) or more frighteningly nearly £1,200 a year for every taxpayer -- this is just the interest. The debt itself can never be repaid as neither can the pensions, healthcare and other promises made to the current generation be paid by the next generation. They can't pay and they won't. The only way these promises could be paid, now that our birthrate is so low, is vast continuous immigration (assuming these immigrants work, pay tax and also don't bring all their dependent relatives with them - some assumption!), the system is a Ponzi scheme and requires evermore participants.

Other western governments are in similar positions, some better some worse like Greece. Japan also is a fly looking for a windsceen -- massive debt (200% of GDP), falling population but a rising proportion of elderly dependents and no immigration. They have kicked the can to the end of the road.

A few scams here are neither here nor there compared to the above.

[anotherpeter]

Navalator, on 2010-03-05 18:04:59, said:

anotherpeter, on 2010-03-05 17:22:08, said:

gotlost, on 2010-03-05 13:21:25, said:

With the morals of the government is it a wonder?

Yes ... it's amazing how the morals of the whole country have been affected by a government that have only been there for a year.

What a CHEAP SHOT! What about the morals of the previous administration under Thaksin? You must be one of those Red Shirt morons.

sarcasm !!!

Morals are generally learnt as children. It's not something the people investing in these things are going to pick up in the year that Abhisit has been PM ... or probably not even the 10 years or so that Thaksin has been around. This is ingrained in the Thai phsyche.

[anotherpeter]

j_mack, on 2010-03-05 19:50:08, said:

eljeque, on 2010-03-05 18:23:21, said:

Amway, not Amtrac, but absolutely right you are.

''SCAMWAY'' not Amway as decribed on Oz TV tonight, it on the Rise [nose] again

There is nothing wrong with Amway, except that a lot of people don't understand it or can't do it.


I was with Amway for a couple of years, but it wasn't for me because I wasn't a salesman. The products that Amway sell are usually very good quality, but maybe a little on the expensive side. You can make good money selling the products, and you can also make good money recruiting others to use or sell the products. The products were good. The people I sold products to also liked them.

There is no scamming involved.

[gemini81]

thaibkk, on 2010-03-05 16:51:57, said:

i guess the amount of stupid people wanting a quick buck only increases...

when it sounds too good to be true ...

true indeed! watch out for that in terms of naturopathy and homeopathy..had some thai students trying to tell me how i get rich in their pyramid scheme. I asked them how many people are involved..they told me there are 4,000 new trainees at the Chonburi training center. Obviously, how would 4,000 of them get rich overnight. Be wary of this, and buying into any scheme where you have to "buy so much per-month" ...i can see this is the easy path to getting shafted..or paying more than you bargained for. I'll leave the companies' names anonymous..

[SomchaiFuhlang]

scorecard, on 2010-03-05 17:04:10, said:

gotlost, on 2010-03-05 13:21:25, said:

With the morals of the government is it a wonder?

What does that mean, care to share your reasons for your statement?

If you don't know the answer to that, you obviously know nothing about Thailand or the Thai government. A better question is: What segment of the Thai government is run with high morals? Hardly a day goes by that you don't hear of some Thai government official getting caught for accepting bribes or involved in some underhanded dealing. Of course, then there's the former Prime Minister tried in absentia for corruption. Besides the big headline grabbing events there are many smaller examples happening all around us. Here are a few:

A buddy was having a devil of a time trying to get his Yellow Book, the standard address confirmation addendum to a Thai homeowner's Blue registration book (tabien bahn). This particular female employee and her boss refused to issue him a Yellow Book after even two months of sending him on wild goose chases all the way from Isaan to Bangkok for translations, etc. He jumped through hoops giving them every additional document they requested each time. It didn't matter as there was always something else he didn't have. Of course, they neglected to mention it before hand. His problem was he didn't offer money under the table. I got my Yellow Book from the next umpher in the same jungwat and it took around three days. And no, I didn't have to bribe the government employees as they were straight up.

Another buddy, a teacher, got a job at a local university and went through complete H*E*L*L trying to get a work permit. The university that hired him didn't help him to get the work permit at all. He ended up making many trips to Bangkok and always never had all the "correct" documents. It took him months, but he finally got it. There was absolutely no excuse for the Thai government employee to jerk him around like he did, over and over and over.

It's also common for some of the few Thais that actually have a driver's license to have bribed the examiner so they wouldn't have to take the required written and driving tests. When I got my Thai license I didn't have an international license and had to sit through the driver's education movie presented in Thai, take two exams, one for the car, the other for the motorbike, then take two driver's tests, one in a car, the other on a motorbike. It was a pain in the ass, but now I'm glad I did it as I learned quite a bit.

Let's see...what do most Thais and "fuhlangs" usually do when pulled by the Thai police for even a tiny infraction? It doesn't matter how outrageous the charge might be you just hand the guy a couple of hundred baht. He sticks it in his pocket and you're on your way.


You didn't ask me, but I felt compelled to answer. Does that clear it up for you, Sparky?

[gr8fldanielle]

All kinds of comments floating around here, I think some people are just uniformed as to the facts. Amway at one time made more millionaires out of people than any other company in the world. Thailand has around 50, or maybe 80 i don't remember Amway stores. Most of the products do come from the US, so i would expect the quality to be better than what one finds at Big C. I do know in the states, one can purchase cars through their Amway distributor license, no dickering, just the best price, salespersons hate it, low profit. Amway rice is a higher grade, organic, and only 91 baht for 2 kilos and no sand. There is nothing wrong with MLM systems other than the fact most people just have no idea how to work them, thus the 98%+ failure rate. MLM's are easier than ever because of the Internet, but you have to be a skilled marketer. As a marketing trainer, and an expert with these types of systems, maybe some would like to learn the difference.
I'm sure money making scams are on the rise in Thailand. More and more people are making money to spend and more and more are getting more desperate, and all those rich people do look like they have the perfect lives. Abhisit did not take Taksin's money, the red shirts will continue to lessen in strength. The point is, easy to trash something one doesn't understand. Don't confuse the scams with the legitimate company's, Pepsi and MCI have both used MLM compensation plans to explode their businesses, good marketing.

[JackSterling]

That is a good point.. I sell "XYZ" and everyone gets all weird about it.. but sell ABC and you are home free??? Get it??

[eastlight]

eljeque, on 2010-03-05 17:23:21, said:

Amway, not Amtrac, but absolutely right you are.

There's nothing wrong with Amway

[basjke]

gr8fldanielle, on 2010-03-05 22:54:56, said:

All kinds of comments floating around here, I think some people are just uniformed as to the facts. Amway at one time made more millionaires out of people than any other company in the world. Thailand has around 50, or maybe 80 i don't remember Amway stores. Most of the products do come from the US, so i would expect the quality to be better than what one finds at Big C. I do know in the states, one can purchase cars through their Amway distributor license, no dickering, just the best price, salespersons hate it, low profit. Amway rice is a higher grade, organic, and only 91 baht for 2 kilos and no sand.

Maybe a bit of topic but in a previous life,some 30 years ago,i had a business in cleaning products.At one time a Amway sales person visited one of my customers and offered him a product with wich you could clean floors,wash clothes,remove nicotine from walls and ceilings and so much more things.And last but not least it was even drinkable and to prove it he drunk of it in front of my customer..................They have never seen him again

[eastlight]

anotherpeter, on 2010-03-05 21:37:23, said:

j_mack, on 2010-03-05 19:50:08, said:

eljeque, on 2010-03-05 18:23:21, said:

Amway, not Amtrac, but absolutely right you are.

''SCAMWAY'' not Amway as decribed on Oz TV tonight, it on the Rise [nose] again

There is nothing wrong with Amway, except that a lot of people don't understand it or can't do it.


I was with Amway for a couple of years, but it wasn't for me because I wasn't a salesman. The products that Amway sell are usually very good quality, but maybe a little on the expensive side. You can make good money selling the products, and you can also make good money recruiting others to use or sell the products. The products were good. The people I sold products to also liked them.

There is no scamming involved.

Totally agree - back in the UK I sought out Amway dealers so that I could buy their products.

[AsiaCheese]

What? Consumer protection in Thailand? What do they do -- print brochures & have meetings in fancy resorts??

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...

[pisico]

screamingeagle, on 2010-03-05 17:27:09, said:

There's a sucker born every minute!!!

...and two to get him !!!

[Grey11]

andyptrav, on 2010-03-05 20:46:51, said:

The largest pyramid schemes that will fail in the next 10 years are western governments. If you expect to live off a government paid pension outside of this period then think again and make alternative plans.

Western politicians will not even acknowledge let alone deal with the problems, they just kick the can and line there own pockets.

In the UK the interest on government borrowings is now over £40 billion a year which is more than the £32 billion we spend on defence - one of the few things any government should be actually engaged in - this is nearly £600 a year for every man woman and child in the country (officially not actually) or more frighteningly nearly £1,200 a year for every taxpayer -- this is just the interest. The debt itself can never be repaid as neither can the pensions, healthcare and other promises made to the current generation be paid by the next generation. They can't pay and they won't. The only way these promises could be paid, now that our birthrate is so low, is vast continuous immigration (assuming these immigrants work, pay tax and also don't bring all their dependent relatives with them - some assumption!), the system is a Ponzi scheme and requires evermore participants.

Other western governments are in similar positions, some better some worse like Greece. Japan also is a fly looking for a windsceen -- massive debt (200% of GDP), falling population but a rising proportion of elderly dependents and no immigration. They have kicked the can to the end of the road.

A few scams here are neither here nor there compared to the above.

The strength & hope that Japan has is that it is a homogeneous nation composed of people with a common language, culture, heritage,religion, etc. Japan is not overrun by immigrants who speak different languages, have different religions,, and do not assimilate as immigrants in the West tend not to do. The U.S. is fast becoming a Tower of Babel & that weakens a nation. We also see the major problems today in Britain & France b/c of massive immigration.

[eggomaniac]

Are you really asking for your confusion to cleared up? or do you think you've made a 'statement'. Pyramid schemes and companies BOTH have hierarchies, yes, you are correct, if that is what you are saying.
If you are, also, stating the hierarchies are the same, you are greatly mistaken.
Companies know where the water meets the sand; in pyramid schemes the beach goes out, impossibly, forever.
Car salesmen and 7/11 clerks sell products. They do not represent themselves as private owners, as all pyramid schemes do AND they do not try to sell you the NEXT franchise across the street, by which you can become rich by getting everyone else you know to open THEIR own franchises.
They both have 'structures', yes, but the structures are way, way different.
The end result is the that 7/11 clerks, at the bottom of that 'pyramid' earn a salary to pay rent and buy food. Those at the bottom of pyramid SCHEMES, [i think scheme is the key word in all of this] waste their time and lose money they could have used for useful things in their lives. Inherently, by economy of scale, those that get roped into the bottom of the schemes will never make any money, let alone a fortune, or even a decent salary.
All of the top Nabobs of the pyramid scheme industry keep creating new ones, every year. By the time the suckers at the bottom are buying in, they are already launching the latest one.
Unless you have an unepolored planet to market to, don't even think you are going to find enough downliners to get that Emerald ring or reach the Platinum level.
go Mary Kay GO!

ignis, on 2010-03-05 03:06:02, 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 ?

[roietrory]

Has anyone heard of Neolife. Are they a pyramid scheme? The wife seems to think her father is going to me very rich one day because he works for this mob. I am of the opinion he won't be as he has been working for them for 3 years and he still drives a clapped out 10 year old motorcycle.

[Sabre]

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.

It is often said that the people you really need to be wary of in Thailand are the long-term sexpat/criminal westerners who are basically willing to do anything to stay rather than face the prospect of going back to their own country and getting a job. The scams are numerous and can range from condo sales in a project that will never be built, to boiler rooms selling shares in companies that do not exist, to wealth 'managers' who simply take your money and run.

An unscrupulous bargirl can clean a guy out if he's stupid enough but even bargirls will give something to the guy in return. It's the rotten westerners who will really clean you out if you are foolish enough to trust them.