http://www.falseprofits.com/
http://www.usps.gov/websites/depart/inspect/pyramid.htm
-- How to get rich? read
Why Nearly Everyone Loses Money in MLM, but So Many Keep Trying
The Ten Big Lies of Multi-Level MarketingEquinox International Was Shut Down by FTC and 8 States, Charged as an Illegal Pyramid Scheme. What can we learn?
10 Lessons for Consumers
FTC Announcement
FTC Complaint, Ruling
Days/Levels
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Dollars/People
$.01
$.02
.$04
$.08
$.16
$.32
$.64
$1.28
$2.56
$5.12
$10.24
$20.48
$40.96
$81.92
$163.84
$327.68
$655.36
$1,310.72
$2,621.44
$5,242.88
$10,485.76
$20,971.52
$41,943.04
$83,386.08
$167,772.16
$335,544.32
$671,088.64
$1,342,177.28
$2,684,354.56
$5,368,709.12
Lesson from the Pyramids
Why Nearly Everyone Loses Money in MLM, but So Many Keep Trying
What few people realize about "duplication" in MLM sales schemes (Recruiting other distributors who recruit other distributors, who recruit others, and so on) is that it places the vast majority of enrollees always at the bottom levels. This is where nearly all the members permanently are who pay the money that goes to the top.
The doubling of the penny each day for just 30 days illustrates the mathematical trick that MLM companies perpetrate on the new recruits
A penny doubled every day for 30 days amounts to over $5 million. However, note that it takes 25 days (levels) before it amounts to just one hundred thousand dollars. Then, in the last 5 days, it soars to over 5 million.
Such is the pattern of "duplication." Like MLM, most of the money is at the end of the chain. The source of that money is the newest enrollees who make up the vast majority of the entire chain.
The big numbers are at the deepest level of the "downline", but many levels must be assembled and maintained long before the numbers starting adding up. In MLM, only a few can ever achieve this. This is mathematically predetermined from the start by the MLM pay plan.
The trick of the trade is to cover up this reality and to convince each and every enrollee that he/she can succeed. Recruits are told that the program is a formula for wealth, even though it is mathematically impossible for any but a few to succeed.
The way the mathematical limitation works itself out is in the pattern of dropouts. MLMs don't totally saturate areas with members because most people quit within a year. All MLMs experience a 50-90% annual dropout rate.
Dropouts thwart the recruitment process at every level. The people trying to build the downline are always dependent on others below to "duplicate" the process. When their new recruits become discouraged and drop out, the rebuilding process must start yet again. And while the hopefuls engage in this constant rebuilding effort, they are also continuously paying money to the MLM for products and training as well as incurring other business expenses. Eventually, they drop out too.
On each "sale" or enrollment, MLM pay plans specify that the highest percentage of bonus money goes to the top ranks. The futile effort of the new recruits pumps nearly all of the bonus payments to those few people in the top ranks. The bottom levels, where the vast majority of members are, become a revolving door with new people cycling in and out every month.
Could someone ever build a large enough downline to continuously earn money? Yes, a rare few could, but only by grossly deceiving others with stories about "extraordinary opportunity," and "anyone can do it." Success is based on the losses of nearly all they enroll. Also, it will require continuous recruitment involving a great amount of time and cost in order to keep replacing those "losers." Retiring on "annuities" will never be possible unless you are at the very top.
http://www.usps.gov/websites/depart/inspect/pyramid.htm
-- How to get rich? read
Why Nearly Everyone Loses Money in MLM, but So Many Keep Trying
The Ten Big Lies of Multi-Level MarketingEquinox International Was Shut Down by FTC and 8 States, Charged as an Illegal Pyramid Scheme. What can we learn?
10 Lessons for Consumers
FTC Announcement
FTC Complaint, Ruling
Days/Levels
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Dollars/People
$.01
$.02
.$04
$.08
$.16
$.32
$.64
$1.28
$2.56
$5.12
$10.24
$20.48
$40.96
$81.92
$163.84
$327.68
$655.36
$1,310.72
$2,621.44
$5,242.88
$10,485.76
$20,971.52
$41,943.04
$83,386.08
$167,772.16
$335,544.32
$671,088.64
$1,342,177.28
$2,684,354.56
$5,368,709.12
Lesson from the Pyramids
Why Nearly Everyone Loses Money in MLM, but So Many Keep Trying
What few people realize about "duplication" in MLM sales schemes (Recruiting other distributors who recruit other distributors, who recruit others, and so on) is that it places the vast majority of enrollees always at the bottom levels. This is where nearly all the members permanently are who pay the money that goes to the top.
The doubling of the penny each day for just 30 days illustrates the mathematical trick that MLM companies perpetrate on the new recruits
A penny doubled every day for 30 days amounts to over $5 million. However, note that it takes 25 days (levels) before it amounts to just one hundred thousand dollars. Then, in the last 5 days, it soars to over 5 million.
Such is the pattern of "duplication." Like MLM, most of the money is at the end of the chain. The source of that money is the newest enrollees who make up the vast majority of the entire chain.
The big numbers are at the deepest level of the "downline", but many levels must be assembled and maintained long before the numbers starting adding up. In MLM, only a few can ever achieve this. This is mathematically predetermined from the start by the MLM pay plan.
The trick of the trade is to cover up this reality and to convince each and every enrollee that he/she can succeed. Recruits are told that the program is a formula for wealth, even though it is mathematically impossible for any but a few to succeed.
The way the mathematical limitation works itself out is in the pattern of dropouts. MLMs don't totally saturate areas with members because most people quit within a year. All MLMs experience a 50-90% annual dropout rate.
Dropouts thwart the recruitment process at every level. The people trying to build the downline are always dependent on others below to "duplicate" the process. When their new recruits become discouraged and drop out, the rebuilding process must start yet again. And while the hopefuls engage in this constant rebuilding effort, they are also continuously paying money to the MLM for products and training as well as incurring other business expenses. Eventually, they drop out too.
On each "sale" or enrollment, MLM pay plans specify that the highest percentage of bonus money goes to the top ranks. The futile effort of the new recruits pumps nearly all of the bonus payments to those few people in the top ranks. The bottom levels, where the vast majority of members are, become a revolving door with new people cycling in and out every month.
Could someone ever build a large enough downline to continuously earn money? Yes, a rare few could, but only by grossly deceiving others with stories about "extraordinary opportunity," and "anyone can do it." Success is based on the losses of nearly all they enroll. Also, it will require continuous recruitment involving a great amount of time and cost in order to keep replacing those "losers." Retiring on "annuities" will never be possible unless you are at the very top.
