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October 27, 2003
Smacked with the stupid stick
By QBlog in
I need a stupid stick. A big, fat wooden rod with the word "stupid" engraved on the side in big, bold letters. I would use my stupid stick every time I heard someone say, "Isn't the workforce a pyramid?"
SMACK!
This is undoubtedly the stupidest rationale for legitimizing pyramid schemes. Why? I should smack you just for asking... but I won't.
Instead I'll explain (ain't I nice?). All J-O-Bs are structured with the leadership at the top and varied tiers of leadership all the way down to the most insignificant employee. Graphing this out does sort of look like a pyramid. But that means absolutely nothing because any system with clear leadership looks this way.
Here's the difference. Pay attention. In a J-O-B, the people "at the bottom" get paid by "those at the top" for their efforts. In a "pyramid scheme" the people at the bottom pay "those at the top" for their efforts. That's the difference. Learn that and avoid the smack of my stupid stick.
For the more advanced students I'll also add that in a J-O-B the people at the top aren't really the ones paying the people at the bottom for their efforts. The customers or clients are doing the paying. Just something else to think about.
Comments
How about we see what Rich DeVos thinks about the subject:
http://www.amquix.50megs.com/sounds/rd_tools_pyramid.mp3
The answer lies in following the money. In an illegal pyramid scheme, like a Ponzi scheme, the money flows up the pyramid as new people's money is used to pay the returns for the people already involved. It is a scam simply because there always needs to be new people losing money in order for only a very few at the top to make money.
In MLM, in a system with no outside retail, you also have an illegal pyramid. Sure there are products moving and it may look legit, but with no retail, the money dynamics are the same as a Ponzi scheme. The only way for anyone to make money is to recruit more people at the bottom, who fund the bonuses. And in the end, most lose money so only a few at the bottom make money. Of course, if there are retail customers, this does not apply.
In contrast, in a traditional business pyramid, the money does not come from new employees added to the business, but from retail sales. Sure those at the bottom may buy from where they work, but the overwhelming majority of money comes from outside sales, and then flows top down. For example, at my work, I get some products for free and the ones I do not, I do not need or want to use. But my salary does not change if I buy the products or not, as we sell to people outside our business.
For more information on how MLM can be illegal, I suggest checking this FTC site. http://www3.ftc.gov/speeches/other/dvimf16.htm
Hi,
Maybe some of you recognize me from the 'Quixtar Now' gang (now a read-only).
Anyway, workforce jobs and MLMs have these common traits:
1. Most folks start at the bottom.
2. Wealth and influence buys position.
3. You don't make the rules.
4. When in doubt, refer to rule #3.
P.S. I'm currently PO'd at both
I have to agree to a point. This coming from a former IBO but still a current MLM operator in a diffrent business.
Most J-O-B-'s are not pyramid styled for many of the reasons you suggested but many if not all retail or sales posisitons are positioned much like MLM.
I work in sales so this doesn't come from a rookie. My CEO doesn't make money unless his sales force moves the product. My district manager makes a bonus if his sales managers makes quota. My boss makes a bonus if his sales staff makes quota. YES...we are paid a salary for doing the J-O-B but we wont have a job for long if we don't hit the sales numbers they want each month.
MLM is straight up commision sales when done correctly. Build a retail business and add a sales force for long term stability. Very, very few are operating that way and I thought at one time Amway did...It doesn't. At least not the Amway line of sponsorship I was involved with. FTC says you have to have customers...period.
There are still straight commission sales jobs out there also...Many reputible car dealers pay straight commision. Some advertising or direct sale companies still pay straight commision...you dont sell you don't get payed. I might also add that many "store front companies" also pay a bonus or bennifits for bringing somebody on to the staff!
Thank you for the opportunity to express this opinon.
This is the most ridiculous thing I have ever heard. Being an IBO myself, I know first hand that it is the Quixtar corporation, NOT the people at the bottom, payin the others. Whether you want to admit it or not, employees in a corporate pyramid (and yes I said pyramid) work for the man at the top, not themselves. How, can a man support his family when's he's always worried about getting fired or when he's gonna get that raised he wants. The bottom line is this: When you work for a corporation, their goal is to have you work for them as long as possibly until they are able to find somebody younger or who will work for less money so that they can fire you. By using the power of quixtar for your own business, their goal is to get you retired as soon as possible because when that happens, they're making more money than before you made a decision to start working for yourself, and you're living a lifestyle that could not be equaled by trading hours for dollars.
SMACK!
Watch out anonymous... you've just been smacked.
Why? The first reason is YOU'RE the one who said "Quixtar," not me. Read it again, where do you see the word Quixtar? Hmmmmm???
Right. Now, the second reason is that a business is not a pyramid scheme. It follows a specific structure or chain of command that graphs out to look like a pyramid but it is not a pyramid scheme. Big difference. But, after you recover from your stupid stick smacking I expect you to continue with your ignorant perceptions of business. Fine with me. Just means I get to do more smacking.
NEXT!!!
Hey anonymous, put down the Kiyosaki book and follow the money. Quick question. How many members and clients do you have any what percentage of your bonus check/sales are made to your members and clients versus those in your downline? The correct answer is 70% or more, because if it is lower than 70%, you are participating in an illegal pyramid scheme.
Again, follow the money. Let's say you are in a totally closed system with no members or clients anywhere in your upline, you or downline. So, where does your bonus money come from? The answer is from the purchases you and your downline make, therefore your downline IS contributing to your bonus and the money IS coming from them.
Think of it this way. Quixtar pays out on average about 30% in commission. For every $1.00 spent on a Q purchase, about $.70 goes to the corp, and $.30 goes to IBO's. And in a system with no outside retail (member and client purchases), the total bonus pool money will only be 30% of all the money paid to Quixtar by IBO's for their purchases. For example, if you have 100 IBO's each doing $100/month, Quixtar would take in $10,000, keep $7,000 and pay $3,000 in bonuses. Now, if split evenly, those 100 IBO's would all then get $30, which of course is $70 less than what they started out with! But we know that bonus money isn't split evenly, and those at the bottom will only receive a small amount, those in the middle will receive about $30, and a small, tiny fraction at the top will receive checks bigger than $100. And that, my anonymous friend, is the definition of illegal buyers club pyramid.
In contrast, in a regular business, the money comes in mostly from customers and not employees, and then gets distributed, often times unevenly. But that's between employer and employee, and for the most part, employees do not need to spend a dime to purchase anything from their employers and they still get paid, thus always coming out ahead.
Quixtar is not illegal because they give you the option to do what you want when you want. If you want to run it as a pyarimid you can, if you don't, don't. Its a buyer's beware. One can make a lot of money if they get clients and members buying.
could you e-mail me, then, with an explanation of how Quixtar is a pyramid scheme?
Or maybe you don't think it is. I'm honestly confused. I never saw a problem with pyramid schemes because, yes, all workforce jobs look like them and they're a legitimate structure of business (at least with my idea of a pyramid scheme). I just never cared for it because I don't care for J-O-Bs.
So yeah, drop me an e-mail or tell me online when you next see me, please.
Posted by: Dwighty | October 27, 2003 10:45 AM