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

[zuluking]

Standard MLM scheme. You get recruited by someone above you in the pyramid. The product to sell is either worthless or standard stuff you can get anywhere, but its the companys way of avoiding pyramid scam laws.

They try and get you to buy in for 7 'businesses', but will settle for 3 if you don't have enough cash (they'll also take credit cards). Then its your turn to recruit people under your 'businesses'.

If you bought in for 7, then the bottom 4 need 2 'businesses' each to begin making money. Meanwhile, your making money for the guy 'above' you.

Again, standard MLM. They eventually collapse with only the people who got in early making money. The rest are left holding worthless pamphlets.

Stay away, stay very far away.

[bills217]

You guys who suggested Quixtar were spot on. He specifically mentioned the products in the first paragraph in the Wiki article - apparently part of the standard sell.

http://en.wikipedia.org/wiki/Quixtar

Apparently they are legal but still somewhat dubious.

I'll use this stuff and the dateline piece referenced on the wiki page to hopefully convince my friend not to buy anything from them...thanks guys.

[bills217]

Why do reputable companies such as Dell, Circuit City, etc. allow themselves to be associated with Quixtar? Is it good enough for business to make it worth whatever tiny amount of criticism they may be subject to?

[Jimbo232]

[ QUOTE ]
Why do reputable companies such as Dell, Circuit City, etc. allow themselves to be associated with Quixtar? Is it good enough for business to make it worth whatever tiny amount of criticism they may be subject to?

[/ QUOTE ]

Quixtar is not inherently "bad". There are many individuals who will swear to the legitimacy of Quixtar. While they do suffer from the negative conotations of MLM, it is in no way a "scheme".

As to why major corporations would associate themselves with Quixtar in spite of the existing perceptions - I believe their MLM network has a few 100,000 members, and that is a significant customer base for a company of any size.

[KajunKenny]

[ QUOTE ]
This is a complete waste of your time, most likely, and I wouldn't get involved.

As for your legality question...

Multi-Level Marketing, or pyramid schemes, are not inherently illegal, and most that are operating illegally get away with it.

[/ QUOTE ]

This is the most assinine statement I read today. Multi-Level Marketing is a legal. Pyramid schemes are not. They are not the same thing. Comparing them is like comparing apples and oranges. In MLM you get paid a commision based on the sale of a product. A pyramid scheme usually has no product or grossly over-priced products. Which make it illegal. Saying that all MLM's are pyramid schemes is wrong and is like saying that all car salesmen are thiefs.

As someone who has worked in MLM and is known as a repuatable guy, this guy who called you is known as an MLM pimp. In other words, he doesn't care about you at all. All he cares about is filling his next level or making a sale. This is the reason I walked away from MLM. When someone doesn't describe the product to you and the wonderful things about it, that should be a definite turn off for you. Some mlm's are wonderful and actually help people, for example Herbal Life and Synergy. The products prices aren't jacked up to make the commisions crazy and the products actually have medicinal purposes.

Considering that this guys company sells well know goods, reporting them to the FBI or SEC won't do much good. Even if they contact the company, they will just report one reps "illegal activities". Actually it is illegal to promise or indicate that people will make money. IF anything, all that will happen is this one rep will be booted from the company.

It won't hurt him, however, he will just join another one and go back to his slimy tactics.

[Freakin]

[ QUOTE ]
[ QUOTE ]
Why do reputable companies such as Dell, Circuit City, etc. allow themselves to be associated with Quixtar? Is it good enough for business to make it worth whatever tiny amount of criticism they may be subject to?

[/ QUOTE ]

Quixtar is not inherently "bad". There are many individuals who will swear to the legitimacy of Quixtar. While they do suffer from the negative conotations of MLM, it is in no way a "scheme".

As to why major corporations would associate themselves with Quixtar in spite of the existing perceptions - I believe their MLM network has a few 100,000 members, and that is a significant customer base for a company of any size.

[/ QUOTE ]

Quixtar is not a bad company by any means. Their branded products are all perfectly usable, and MLM can work for some people.

Most of the problems come about because it is a sales job and no one wants to hear about MLM. I sold Life Insurance for a summer and it doesn't matter if people need the product--they don't want you calling them and trying to sell it to them.

[elus2]

There's also the whole cult experience that they try to force on new recruits

[hanster]

Why do reputable companies such as Dell, Circuit City, etc. allow themselves to be associated with Quixtar? Is it good enough for business to make it worth whatever tiny amount of criticism they may be subject to?

Because they increase their business without really having a bad rep. It's salesmen worknig for them for free! (Without having to pay them healthcare, 401(k), etc)

[DWarrior]

So what happened with your friend, did he drink the kool aid?

I was approached by one of these guys and I actually went to two of their meetings. Same tactics as you and the web described. However, I don't want to brush it off as a scam yet just because mlm and amway/quixtar have negative connotations.

I did some research on the web and I'm supposed to go to one of their "training sessions" where they show me how to call people and their pitch that you guys have all heard and that's available verbatim on the net.

I have not put any money into this thing yet, like others have said, Quixtar wants $200 + $100 for their training package.

I told my recruiter (sponsor is the term I think) that I first want to get a packet of all the details and requirements for each IBO level (IBO = guys who sign up). The major reason IBOs get burned seems to be the motivational materials, just watch the Dateline Expose on Quixtar. However, the people in those videos seem to be retarded. What kind of an M.D. dumps 30 grand on motivational tapes and then goes on national tv to tell about it, if anything I think it's proof of the failure of the med school she went to. Another guy quit his job and left in a limo, shot his alarm clock and went full time Quixtar then realized he couldn't make what his old job paid...another idiot. Why on earth would you quit your job for Quixtar if you didn't even see any significant profits? Needless to say, I don't think Dateline had the whole story.

Another thing I requested was a catalog of their products and their prices. Their products seem to be legit and I got to taste some of their stuff at the meeting, they were pretty good. I definitely see how this can be of value to the people I'd be selling it to. The biggest problem is the price, I need to see that the products can effectively replace the ones I currently buy (or the products my potential customers currently buy), obviously if this stuff costs too much I won't bother with this.

I'll also be requesting their refund policy for the money I invest and reasons why an IBO could get kicked out of the organization. After all, I don't want to spend time to build something I can lose because of fine print.

So anyway, I'm trying to approach this opportunity with an open mind, but objectively. I'm very surprised and disappointed with all the 2+2ers screaming "scam" without ever looking at the company closely. How did you guys get started in poker? Google "poker scam" and you'll find 1.2 million pages touting rigged sites and colluding players.

There is obviously an aspect to Quixtar that exploits people's greed. The meetings spoke of get-rich-quick, owning rolexes and lamgorghinis while putting in "10 to 15 hours a week". That's not what I want, and I know it will take a lot more work to get the results. I'm willing to put in 20-30 hours a week to slowly build a little bit of residual income if this opportunity is good.

If I review their policies and guidelines and don't see potential value, I'll politely tell my sponsor no thank you and move on. If the sponsor starts to change the subject and refuses to give me specific information I ask for, I'll just leave. Unfortunately, it's impossible to find an objective analysis on the web, since the critics are often as mindless and ignorant as the people losing their shirts to Quixtar.

PS, I thought this was funny:
the site bills posted: www.hendricks-intl.com
my sponsor's "business": www.ebusinesswaves.com

I guess it's because nobody actually goes to these sites, they're all part of Quixtar. You won't get any google info on them aside from their own links.

[johnnyrocket]

get out immediately, clearly a scam