TigerWu
TigerWu
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July 26th, 2017 at 12:42:17 PM permalink
Quote: Wizard

The lowest point of my life was the year following college.



Hey, same here. Then again, I had an art degree, so I shouldn't have been surprised.
Wizard
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Wizard
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July 26th, 2017 at 12:50:57 PM permalink
Quote: TigerWu

Hey, same here. Then again, I had an art degree, so I shouldn't have been surprised.



What did you end up doing with it?
It's not whether you win or lose; it's whether or not you had a good bet.
Ayecarumba
Ayecarumba
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July 26th, 2017 at 12:52:09 PM permalink
But isn't this the mechanism behind casinos? Lots of people pay for the opportunity, lured in by promises of "Quick Hits", "Mega Millions" and such, but only a few walk away winners.
Voice of the Announcer: Meanwhile, at an abandoned gold mine, a sinister figure lurks. Snidley Whiplash: I love to lurk. It's so me
gamerfreak
gamerfreak
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Thanks for this post from:
Romes
July 26th, 2017 at 12:56:59 PM permalink
Quote: RS

HOWEVER, yes, they absolutely can (I did not say DO) make money, I think. At least the one I was "introduced" to, you buy like $500 or some BS amount of some nonsense every month. I think the theory or something is that you can sell that $500 worth of nonsense to regular folk who aren't part of the pyramid system. IF you can sell that much, then you're making money.


Multi-Level Marketing is basically a legal pyramid scheme. It's the same exact concept at it's core, but is legal because it's all based around a real product. A few people do make good money, which is exactly what fuels the fire. I've seen a few Mary-Kay pink Cadillacs on the road ... which is a gift you get after selling something like $10,000,000 of their product.

These companies have a legitimate product, but almost always poor quality and/or expensive. To sell the product, they recruit independent salespeople, who are usually required to purchase a sample kit for $500-$1000. The catch is, they are selling this BS at an absurdly low commission of 5-10%. So all of a sudden, they find themselves needing to sell $5000+ of smart juice chalk powder just to break even. BUT WAIT THERE'S MORE ... the company tells the salesperson there's much more money to be made if they build a team. Because when you build a team, you not only get 5% of the product you sell, but 5% of the sales of each person you recruit, and then 5% of whatever your recruit's recruits sell, and so on. Which is where it starts looking very similar (identical) to a pyramid scheme. Say everyone had to recruit 15 team members to make a profit on their original investment of a sample kit. By level 9 of the recruitment tree (pyramid), you'd exceed the number of humans on earth.

The slimiest part of all of this is that it attracts people who are having a rough go in their careers or financial life, promising they can be a self-employed business owner for a small $500 investment. Then these people start giving the sales pitch to friends and family, who know the person is struggling and they can't say no.
lilredrooster
lilredrooster
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July 26th, 2017 at 12:59:24 PM permalink
Quote: Wizard

So, I answered a couple and they turned out to be multi-level companies, not offering a job, but to join their commission-based sales force. One was for Herbalife



hedge fund manager bill ackman made and lost a billion dollar short bet against herbalife in 2012 and his fund has lost hundreds of millions. the ftc fined herbalife but did not call it a pyramid scheme. meanwhile it's stock in the last 6 months has gone from about 56 to about 68. most analysts are neutral towards it but some are calling it a buy. herbalife has changed its tune a little bit but it's still rocking and rolling. last year it claimed revenue of close to 5 billion and a gross profit of about 3.5 billion.

https://www.bloomberg.com/view/articles/2017-03-01/for-better-and-worse-ackman-s-still-betting-against-herbalife
I've got 2 grand in my pocket that's itchin to become 12 bucks and a hangover. ɢᴀᴍʙʟᴇʀ'ꜱ ꜱᴏɴɢ
FleaStiff
FleaStiff
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July 26th, 2017 at 1:01:14 PM permalink
Yeah, I've steered people away from Scamway and other products that have lots of adjectives but cost so much more than comparable products.

I knew one woman who invested ten grand in a scheme one week before a circuit court certified the class action at the scheme collapsed. Bad timing. Wondered how she ever got the money if she was so dumb.
Spoke to one guy handing out cards on the street for a lecture, he wasn't an investor just a broke guy working in the hot sun. He had asked if it was legal and I told him its legal to hand out the cards for a lecture but the entire program is fraudulent.

Some people ar wary some are not.
gamerfreak
gamerfreak
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July 26th, 2017 at 1:05:15 PM permalink
Quote: lilredrooster

hedge fund manager bill ackman made and lost a billion dollar short bet against herbalife in 2012 and his fund has lost hundreds of millions. the ftc fined herbalife but did not call it a pyramid scheme. meanwhile it's stock in the last 6 months has gone from about 56 to about 68. most analysts are neutral towards it but some are calling it a buy. herbalife has changed its tune a little bit but it's still rocking and rolling.

https://www.bloomberg.com/view/articles/2017-03-01/for-better-and-worse-ackman-s-still-betting-against-herbalife


When I was living in the dorms in college, some cute girl down the hall started selling herbalife. I found out because my roomate was trying to smash, but only came back to our room with several cases of shake powder.
TigerWu
TigerWu
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July 26th, 2017 at 1:14:45 PM permalink
Quote: Wizard

What did you end up doing with it?



Nothing.

After I realized an art degree wasn't terribly useful, I joined the Army then used the G.I. Bill years later to go back to school and get a somewhat more useful degree, which led to the job I'm in now.
Wizard
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Wizard
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July 26th, 2017 at 1:16:53 PM permalink
The girlfriend of a friend of mine (I hope he doesn't see this) sells for Mary Kay and hit me up to by lotion when I mentioned I suffer from dry skin in the winter. So, I've been buying it. I have a difficult time saying "no" to women. To be honest, I find the lotion no better than what I can get at Target but it is 5x more expensive.

At the risk of going off on a target, she has been pressing me to buy this whole kit where you scrub off dead skin cells and then moisturize with something else. I asked my dermatologist about a similar product some girl tried to sell me at the Fashion Show Mall and he said "What's wrong with dead skin sells?" When I had no idea he explained that they protect the living skin cells.
It's not whether you win or lose; it's whether or not you had a good bet.
Romes
Romes
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July 26th, 2017 at 1:24:28 PM permalink
Quote: billryan

While I am against Pyramid schemes and multilevel marketing plans as well, you can succeed in some...

Define succeed. If you mean sell tens or hundreds of thousands of dollars worth of product, then you're correct. If you mean work 40 hours per week and make an 'average' salary, then you are incorrect. As mentioned prior almost ALL of these "companies" have you sign a contract that states you MUST buy a 'resupply' each and every month, regardless if you sell your previous one or not. Combine that with min/max selling rates and a saturated market after 1-2 months and 99.54% of the time you'll find a want-ra-paneur with a garage full of overpriced product they can't sell. So while for the first few months (or even longer pending market saturation) it might look like they're making TONS of money, they're really not.

1) they have a cap on what they can sell it at
2) they don't actually make very much commission at all on it
3) they must put any money they make towards their contractually obligated re-orders
4) eventually the market stops buying (can only hold so many 'parties') and you're left with the inevitable garage of unsold product pissing money down the drain.
Playing it correctly means you've already won.

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