What is a pyramid scheme?
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products or services.So, if it looks like a pyramid, is it? Click To Tweet
The short answer is NO.
Because everything looks like a pyramid.
Most companies have a format like this. Most companies are not pyramid schemes.
But you buy in?
Nope. When you BUY a product and that, in turn, gives you a title, your investment was in the product. Not a buy in. (Lawyers, however, buy in to be a partner, as do many principals of ad agencies. These are also not a pyramid scheme, but a way to build a firm and build assets- and just two examples of buy ins. Something to think about.)
Why can’t I get it in store?
Like many MLMs, the people who sell through them are trained- and the good ones take their training seriously. This is, after all, their job. A career chosen because of a belief in their product. To simply put this product on the shelf would be a disservice to you, as a customer.
Were you to just have a bunch of skincare products on the shelf, would you be inclined to use the whole system? Would you even know why the whole system would work for you? Would taking parts of one system for acne and combining with a product from a sun care line be better for you? Why? Buying something off the shelf does not give you access to someone who knows how products will interact with your current medications, or access to sunlight, or if you’re pregnant or breastfeeding? Rodan + Fields, for instance, has access to a nurse to answer consultant questions in a timely fashion so you, the customer, can know what you’re using. This is a FREE service that comes with your products. Your consultant is there to get these answers for you- without your needing to search, call, email or message.
When you go to the store and see weight loss shakes, protein powders, vitamins, supplements, remedies and tonics, do you know how they interact? How they will fit into your goals? If you can take them with certain health concerns like diabetes, IBS, or even how they can affect psoriasis? Do any of these product off the shelf come with a personal coach to give you motivation, a community, and a customized plan to reach your goals? These are FREE services that come with your purchase of the superfood meal replacement, Shakeology, from Beachbody. With programs built and designed for all fitness levels, right from home, guided from videos, live workouts, community events, DVDs- all for less than a gym membership.
These are real products, and yes, there are real commissions and yes, the commissions are structured. Most sales are structured commissions with structured discounts and bonuses. Companies, even hospitals, have sign on bonuses, holiday incentives, and the like. Working in a sales environment with a flat-rate doesn’t celebrate those who do better- work harder to sever their customers. Would a car salesman be excited about going to work- even if s/he LOVES their cars, if they made the same money and benefits after selling 4 cars in a week, than someone who doesn’t try, isn’t excited, and never makes a sale?
In an MLM, the goal of the representative is, generally, to help more people. Help more people find health, or a desired look, beauty, confidence- and the company is based on customer satisfaction and demand.
A more public example?
If Johnson & Johnson makes a product, they sell it to as many stores as they can, like Walmart, Target, Stop & Shop, Babies r Us…
Those stores, in turn, sell it to their customers.
The more the customers demand, the more the stores will buy.
The deeper the discount on the store’s purchasing price (sometimes that pass that onto you in coupons, monthly specials, flash sales, 24-hour deals, etc.).
The more employees they have to “bring in” (ie hire) to stock those shelves and sell those products.
The more Johnson & Johnson wants to make more products for babies that sell well and that people like and, most importantly, that work well and make baby and caretaker feel good.
The more advertising they do → The more employees they hire. →The more money is made from what they sell to the stores who sell it to the consumer.
These are monies made off of people buying products at multiple levels of commerce.
Not buy-ins. Not schemes.
Does it work?
If you start anything from doing nothing it will work. OF COURSE! However, how many people out there have been doing. Been trying to eat better, find a workout they don’t hate, buying every new product to care for their skin? All to no avail.
For me, I was running 3 or 4 days a week 3 to 6 miles at a time. I spent at least 7 hours running a week, plus yoga videos I found on YouTube, and yet 1.5 years after having my 2nd child, I was still close to 150 pounds… 18 pounds heavier than when I first started having children.
A woman came along and talked to me at Addie’s t-ball. I was new to the city, and enjoyed the conversation. We started to delve into how unhappy I was with how I felt.. how tired I was… how my clothes looked… how I felt in my own body. And she had a “solution” and I was skeptical.
I’d heard of oils and wraps and shakes and pills and I wanted nothing to do with it. I worked hard for what I had. I ran long miles that lingered in my joints. I braved the weather and often ran out of the safety of daylight and into the night because that’s when Dave was here and I had the time. But this program was different. There were no pills, no wraps.
Maybe not immediately, but like The Compound Effect reiterates, if I did all the right little things and made all the right habits a part of my life, I would find success. And I did.
Without the pain in my knees, with the best nutrition (no more nauseating multivitamin, either), with fun workouts, complete with a plan of action, and a community surrounding me, I busted through 7. Then 10. Then 15 pounds.
And I believed in what I was doing, because somehow it was
less different, than what I had been doing my whole life, and I was getting the results I’d never gotten before. I’ve never been so defined, energized, happy, or satisfied after my workouts. So yes, I share them. And I want to share that success with people around me. I want this feeling to be had by more people, because I believe in in. I love the sustainability and support of my community and the passion my company has in keeping our country (and its expansion into Canada) on the path to health and wellness!
They are out there.
Yes, pyramid schemes are real. Signing up with any company that promises you wealth? Sounds like a pipe dream. Who can really guarantee anything in life?
As a Beachbody coach, I’ve never been promised anything except a supportive community- and I’ve got that. Am I rolling in money? Nope. But I am happy and love my fit community (and yes, I operate in the black, not red).
Is someone not excited about something, but about an idea they’re selling? Be wary. Want a story that will change your life? Check out Wake Up Now, from NPR.
I’m a little embarrassed to admit this,” said reporter Brian Reed, “but even after being at this conference for several hours, if you put a gun to my head and asked me what WakeUpNow is, what it does, I still don’t think I could have told you.”
The other reporter, Bianca Giaever, said “We talked to dozens of participants, and what we learned is that people were incredibly excited about something they weren’t terribly good at explaining.”
MLMs are not perfect, rarely is a business plan of any kind flawless, but is real estate a scam because an agent never sells a single house, but has invested in training, a license, and marketing materials? Are restaurants a scam because 95% go out of business within 3 yrs? The MLM business plan may not be for you, but those who choose not to or can’t, don’t need to jump on the negativity band wagon, either.
Sure your Facebook is full of leggings, skin care, weight loss, hair products and fitness programs that you [may] find clogs your feed… your TV is also full of sales in the meat department at your local grocer, the new Fall brews, the same movie trailer, all the things you need NOW for all the things you need fixed, changed, better, better, better!
Social media is the new means of connecting with an audience, the world is evolving, sales are becoming more personal- even when done from hundreds of miles away. Fitting a customer to their perfect program, regimen, or connecting them with comfortable fashions or books the whole family will enjoy gives people a way to earn an income. It’s a job, just like any other, and though becoming more prevalent, this form of work is not new.
So, before you look at a pyramid and claim it must be a pyramid scheme, consider it may just be a good plan with a solid base, a lot of workers looking to do good, and some people at the top, helping direct a vision of goodness, community, and selfcare from the inside out.