Wednesday, February 23, 2011

Um yeah, it's a pyramid scheme...but so is everything else!

"If you can't beat 'em, join 'em", or so the saying goes.  Yesterday, I dispatched the first of two hackneyed stock-phrases the Ambot will employ when he's confronted with the words "pyramid scheme"--in short by flat denial, supported by the erroneous reasoning that since you can make more money than your upline, it cannot be a pyramid scheme.  It's not uncommon for the bemused Ambot to abandon this line of reasoning when he becomes uncomfortable, opting for the opposite approach:  to embrace pyramid schemes!  Yep, that's right.  Often times in the same conversation, an Ambot will argue both sides and pray something sticks.  "Sure, Amway's a pyramid scheme, but so what?  Everything else is, too!"  Generally, corporations, the military, and the government are then compared to Amway in terms of their hierarchical or pyramidal structure.  It's as if those who employ this argument believe the problem with pyramid schemes is the shape, and if it can be shown that other credible systems share it, then pyramid schemes must be OK.

I encounter this reasoning frequently, and it's not just with Amway.  Apparently, members of many MLM schemes are taught this counter-argument to the pyramid scheme challenge.  Just last week, I posted a link on my facebook page, asking friends to sign a petition on for FTC investigation into Amway.  As you may know, Amway has failed to comply with the regulations the FTC put in place in the late 70's after their first investigation.  Anyhow, it didn't take long for a fellow to respond to my request with the following haughty, disrespectful comment.  Bear in mind, this fellow hadn't spoken to me in 13 years, but I've found that people are passionate about their MLM, almost as much as their political views and religions.  Here's the comment:

I own a company, so I am on the top of a pyramid, I have investors under me, they have agents under them and the property managers under them then the office workers, then I guess at the bottom would be the cleaning crew and maintenance workers. If you disect [sic] every company in America, you will find the pyramid structure! If every pyramid was shut down it would have to start with the government, Obama is on top of that pyramid LOL!

What do these two men have in common?
Yes, LOL.  This same argument is regurgitated in many an Amway meeting by many an ambitious IBO trying to sponsor many a naive recruit.  When I was prospected 9 years ago, I heard this same reasoning.  As I mentioned before, it's as if those who use this argument believe that the problem with a pyramid scheme is the shape.  But of course, that's just asinine.  It's not the shape, it's the concept, and that is that very few people get very rich from the modest losses of very many, and those very many only comply because of false promises of wealth.  The crucial obvious point that these IBO's miss, for all their recycled stock quips, is that in any of these other hierarchical systems, those on the bottom level are all fairly compensated for their work.  They're paid an agreed upon wage, and there are no false promises of wealth to dupe them into participation.  Not only that, but in any of these other examples, it is possible for an appropriately qualified individual to be hired or elected into a lofty position on his own merits, bypassing the lower ranks.  In a pyramid scheme, on the other hand, the prevailing principle of success is "dibs".  Those who get in early get rich.  There's a lot to be said for charisma, ability to motivate, and willingness to deceive, but there's no substitute for getting in early, and that's why in a saturated market, such as the US, new diamonds are far more scarce than lottery winners. 

There are a lot of things wrong with pyramid schemes, especially the massive global fraud known as Amway, but none of these is the shape.  Fortunately, the similarities between legitimate corporations and pyramid schemes end there.  Nice try Ambots.


  1. IBOs get confused about hierarchy and a pyramid. It's not about the organizational structure but where the money comes from into the organization. In a job, even the lowest man on the totem pole gets a paycheck. In the Amway organizations, the lowest guys usually lose money and their losses flow upwards to the pharoahs otherwise known as diamonds, in the form of product bonuses and tool sales. It gets worse for Amway groups that teach "buy from yourself" as little outside money comes in from customer, thus IBOs can only profit by recruiting new people into the business.

  2. Yep, IBO's get confused about a lot of things. Pyramid schemes are roughly zero sum games, even when sales are involved. As a by-product, merchandise gets shifted from the corporation, but in the end, money is just changing hands from the downline to the upline.

    Yes, "buy from yourself" mentality, along with tools, is the reason that Amway almost always results in a loss for the IBO. The only way to assure modest profits for the majority is by pushing retail sales. "Buy from yourself" will be a future blog topic.

  3. John,

    Now you're getting somewhere, just not very far. Both you and jc are confusing having a job with having a business. Most traditional business owners start out at a loss, then the successful ones pay back their loans, recover their invested savings, etc., over time and make a profit. If the business owner is operating ethically, morally, and legally, these costs are normal and customary to starting a business. These costs are all above board, and may include office space, inventory, employee salaries, etc.

    The difference with Amway is the major costs, the ATS, is promoted as a "shortcut to success," but it is really a shortcut for the upline LCKs to rip off the downline and make several times more from tools than from Amway AND LIE ABOUT THIS FACT!

    The "buy from yourself" alone does not result in a loss to IBOs, unless massive amounts of non-competitively priced products are involved. Again, retail sales without getting rid of the ATS is a recipe for enhanced financial abuse.

    By the way, it is possible to start out at the "top" with an MLM, just ask Orrin Woodward.

  4. Hello Lucifer, and thanks for reading the blog!

  5. Hi John, Lucifer is the "anon from Scarborough Canada" whose IP address starts with 99. He trolls my blog and Anna's. I believe by leaving that message, he is implying that Joecool is actually the authos of this blog. I noted that he exited from my website onto your profile earlier today. He's in for a shock when he finds out you actually live near "Tex".

    I wrote a blogpost about the threats he's left on my blog:

  6. Thanks, Joe. I think it would make Ambots feel better if in fact several of the "opposers" blogs were created by the same person. Then, they could discredit all the critics by discrediting one. It should be obvious that you, Anna, and I have disparate writing styles, but noticing that would require discernment, and Ambots are short on that. Ironically, it is the pro-Amway blogs who are created by the same person, as we all know, David Steadson.

  7. If you look at the comments on IBOFB's (David Steadson) websites, he claims that I am Anna, and the majority of blogs that are anti Amway. Some of his followers even think I am also Tex. That is really odd, since IBOFB met Tex in person at a blogger's conference in Prague.

    As you say, it is likely that by making that claim, discrediting one person would cover them all.

  8. Lucifer! I haven't heard from you since you stopped posting on derek's blog. I thought you must have returned to hell!

  9. Just because ibofb met me in Prague doesn't prevent me from being a second person online. What doesn't make sense is how I trash jc by telling the truth about him - THAT is a legitimate reason why we wouldn't be the same person - why would I trash myself?

    By the way, I've noticed the same trend here I've seen on other inferior blogs, such as, that I respond to the other persons' points, but my points are often totally ignored. You need to clean that up in order to have a legitimate discussion, John.

  10. Having met IBOFB in person doesn't mean you can't have a second online personna. I agree. But IBOFB has got to know that you aren't me.

    I am insulted that people would even think I was "tex".

  11. I don't think ibofb ever stated we were the same person.

    I am insulted that people would even think I was "jc".