Have I discovered a pyramid scheme? What should I do?

[schnoodleC]

[ QUOTE ]
He then discusses how Starbucks wants each franchise to succeed (obv.)

[/ QUOTE ]

FYI, Starbucks doesn't franchise. All their normal stores are company owned. They even in-source the construction of new stores in major markets.

"Starbucks" in airports, groceries, book stores, etc are licencies (still not franchises).

I think this further shows the ignorance of the guy you met with.

[DWarrior]

Sniper+heater:

Thanks for your input, but yeah, I understand the kind of stuff that goes on, but I also think that might be my edge as an IBO. I understand that the top guys have a separate business that taints the Amway/Quixtar name, and that's really what the Dateline Expose was about (I think otherwise Amway/Quixtar would be much better opportunities). I also know better than to buy overpriced motivational books from them. I've already been reading motivational/personal development stuff for ~6 months, so I have a good idea of what's good and what's not, and I can either find it for free on the net/library or get it for cheap on ebay/amazon. I'll never buy a $12 copy of Think and Grow Rich.

I realize the percentages, I saw their presentation on making $5k/year after 2 months of 10-15 hours/week. I then saw the packet with the same info and saw the fine print, .05% or so actually accomplish those numbers in that time. But I also realize that most IBOs think it makes sense to recruit anybody who has a pulse. When a company hires an employee, they screen for competence and other factors because they then have to pay him. When an IBO recruits another person, that person ends up paying the IBO, so obviously all screening goes out the window. I think that's why the mean/median gross earnings are so low for IBOs, because a lot of incompetent and delusional people join. I also think the net is negative because of that reason, they don't bother doing the research, they don't think for themselves, so the top Amway/Quixtar people take them to cleaners.

I also think their sales pitches and the program is geared to appeal to people like this. I see it being the same as casino deposit bonuses where they try to attract the greedy unthinking masses, that's why I think if I take the time to understand it and learn to circumvent the pitfalls, I can extract the value without falling for the side scam (I think the side business can properly be labeled as a scam).

schnoodle: I think in my case they used Subway and McDonald's. But if they used Starbucks, I wouldn't know the difference since I've never looked into franchising. They also mentioned that their concept is similar to Walmart (according to them, Walmart made money by cutting out the middlemen and passing the savings on to the consumer, Quixtar makes money by cutting out the advertising and passing the savings on to the consumer).

The one thing I'll be looking at when I review the IBO level to see if the -EV stuff are built in. For example, if to reach their Ruby I have to bring X people to attend their motivational conferences or something, then I know I can't win.

heater: and yes, I have my eye on a couple of their products.

This is the major reason I think this might have some value. The problem with a pyramid scheme is the very last guys to join get stiffed because they just lose money. I see MLM as having the potential to be valuable because the last guys to join still see value by being able to buy cheaper products. But again, it could have the same problem as communism, where the few power/money hungry guys at the top inevitably ruin the whole thing by getting greedy.

[KidLifeCrisis]

Just want to say thanks for this whole thread. I got the Quixtar pitch last night [img]/images/graemlins/cool.gif[/img]

[BruinEric]

Cool bump, hadn't read this.

Over 10 years ago, I went to a couple recruitment meetings after getting the same pitch OP got at Starbucks (mine was at a Marie Callender's restaurant).

I never signed up, though through totally unrelated contact, a cousin did.

Some points no one has really added here:

-Some people think "yeah, I'm not gonna buy those tapes." But they're understimating the peer pressure and "management pressure" to do this.

-Some people think "I'm not gonna have to listen to that hype about making $5k/month." Yeah -- you are. You ARE going to buy tapes. You ARE going to listen to tapes about people "living the dream." You ARE going to sit through other recruiting meetings in hotel rooms for YOUR potential downline. You will smile along with your invited "guest speaker," and you WILL talk about riches riches riches!!!! (what I mean is, you will be told you need to do this or you will be called a failure, not a positive thinker, etc.)

-My cousin and his wife used to keep vanishing to go off to "family reunion" weekends of their upline. They'd miss important family occasions and spend money they didn't have to fly somewhere on "very important" business meetings. You don't HAVE to go -- but if you don't you're not a "winner."

-All this talk about "passing the savings on to the consumer" is silly. What savings are being passed? The consumer pays a price loaded to meet the manufacturers' cost along with margin to pay a mega-downline full of people. Assuming you live in a reasonably metropolitan area, there's not much there you can't find less expensive / better quality at sales, Costco, WalMart, Target, etc.

-I don't know the details, but there's actually schlepping of product that goes on. I know all of you are dying to "keep store."

[Paboo]

I did the Amway think about 10-12 years ago... My buddy was supermotivated about it and gave it a shot. It think we did do a 'weekend' out of town at one of the Yeager meetings.

The one lasting think I remember is on day #2 of the meeting they stressed the importance of having "faith" in Amway with high religious overtones.

He finally fizzled out after about 6 months and I can't really recall if he every got anyone else signed up, I certainly didn't try hard and did not.

[ QUOTE ]
Thanks for your input, but yeah, I understand the kind of stuff that goes on, but I also think that might be my edge as an IBO.

[/ QUOTE ]

Curious about what you think your edge is?

I think you should take the responses you are getting to this thread to heart. Everyone is telling you to stay away from it and they wouldn't touch it with a 8 foot pole.

The real question is how are you going to motivate other people that this isn't a scam? I don't think MLM's are a scam, but there certainly don't have any sort of public credibility. Most people avoid Amway and MLMs like the plague.

You might be able to motivate some folks to signup, but how are you going to get those folks to motivate others to signup to build up your business?

MLM are hard work. Good luck to you if you make the attempt.

Paboo

P.S. I just finally finished using the last of my Amway product this last year. I had purchased a 4 pack of mega-size dental floss way back when. LOL.

[HajiShirazu]

http://www.mlmsurvivor.com/

[KidLifeCrisis]

I'm trying to think of the easiest way to turn this down without getting pressured too hard. It's basically a husband and wife, so it's two on one. (We're supposed to be meeting up a second time tomorrow night, because they wanted to give me time to do my own research and come up with questions and whatnot.) I don't have experience in situations like this, and I know I won't be joining in the MLM "job", but I hate that feeling of being cornered. Hopefully my head won't asplode.

[shaftman11]

Being around this for some time (though I've never built it) I've come to learn that they are legitimate. They do require work and an idea of what you want out of life. If your not getting what you want out of life than this is a great way to get it. If its not for you than don't do it! If your friend wants to be a part of why would anyone discourage a friend? That's not true friendship is it? In regards to the MLM; Mary Kay and tupperware are just a couple of examples. But all of the women that wear that kind of make-up must have been scammed because some one had an idea...every time I had leftovers as a kid and put them in the fridge, I just couldn't help to think on how my mother was scammed by keeping our food fresh! Same ideas!!! But you should be careful, there are some very legit businesses out there, but there are also the crappy ones!!!!

[Sniper]

[ QUOTE ]
I'm trying to think of the easiest way to turn this down without getting pressured too hard. It's basically a husband and wife, so it's two on one. (We're supposed to be meeting up a second time tomorrow night, because they wanted to give me time to do my own research and come up with questions and whatnot.) I don't have experience in situations like this, and I know I won't be joining in the MLM "job", but I hate that feeling of being cornered. Hopefully my head won't asplode.

[/ QUOTE ]

KLC... here is my suggestion.

If you are bored and looking to do a little socializing and listen to some motivational [censored]...

Keep your wallet at home.
Let them wine and dine you.
Keep asking interesting questions about the business.
Ask them for sample tapes and books.
Get all you can out of it without spending a penny.
Keep telling them you are really successful at what you do now, and are not sure that making the change is right for you; but you know a lot of people who might find this interesting if you did get involved.
[censored] Starbucks, you want to see the dream in action...
When you get tired of being wined and dined up the MLM foodchain.. stop taking their calls [img]/images/graemlins/wink.gif[/img]

[Sniper]

[ QUOTE ]
Being around this for some time (though I've never built it) I've come to learn that they are legitimate. They do require work and an idea of what you want out of life. If your not getting what you want out of life than this is a great way to get it. If its not for you than don't do it! If your friend wants to be a part of why would anyone discourage a friend? That's not true friendship is it? In regards to the MLM; Mary Kay and tupperware are just a couple of examples. But all of the women that wear that kind of make-up must have been scammed because some one had an idea...every time I had leftovers as a kid and put them in the fridge, I just couldn't help to think on how my mother was scammed by keeping our food fresh! Same ideas!!! But you should be careful, there are some very legit businesses out there, but there are also the crappy ones!!!!

[/ QUOTE ]

Shaftman,

Covincing people to start a business is hard

Teaching those few that do, how to be successful and motivated is even harder.

Trying to do this with a business concept that most you would speak to, have heard about the business and already made a yes/no decision... really really difficult.

Especially in light of the fact that you are getting people into a negative cash flow business for quite some time, even if they are the type that could be somewhat successful, eventually.