What is the difference between pyramid scheme, pilot game and network marketing?
An inexperienced person, when he hears about multilevel marketing, often thinks on pilot game, or on pyramid scheme. But these three things are only similar to each other, not the same. There are some striking differences. Nowadays, many pyramid schemes disguise themselves as multilevel marketing. Let’s get to know all of them a little bit, so that nobody can fool us with it afterwards. In my opinion, entering the pilot game or the pyramid scheme is just as wrong as missing an honest network marketing opportunity.
The rules of a classic pilot game
A “plane” has 8 passengers, 4 stewards, 2 co-pilots, and a captain. If the passengers each enroll 2 more people, all step up one level, and the captain “flies away”. The 2 co-pilots each get their own plane. The freshly enrolled passengers pay 50 € for the captain. Then they have no rest until they too “fly away”, with €400 in their pockets. If the game will not interrupt.
But the game will interrupt, that is its natural characteristic. That is why it is illegal and punishable. As the lawyers say, “generating income without actual economic activities.”
The main differences between MLM, pyramid scheme and pilot game:
This pilot game is revealed at first glance, but in the pyramid scheme it is not so simple. In the pilot game there is no product and the profit to the winners is just as much as the loss to the losers.
In the pyramid scheme there is already a product or service – just like in multilevel marketing – that is why it is so deceptive. But the products in the pyramid scheme are either completely useless to consumers or they can only get them by enrolling more people into the scheme. In most cases these products are bought exclusively by the members of the game. A pyramid scheme continues to function when we take the product out because the deposits keep the new entrants moving. For a while…
If we take out of multilevel marketing the product will not continue to work. Bonus generates only after the consumption of the products.
An example on a camouflaged pyramid scheme
In a small town in America there lived a bicycle dealer. At that time you could buy a bicycle for 10 dollars, but he also offered it for 8 dollars if the buyer also bought 5 coupons for 5 dollars. He could then give those coupons away and if someone bought a bike with that coupon, the former buyer could get his one dollar back. So if someone really wanted to buy a bike for only 8 dollars, he had to find at least 4 people who wanted to buy bike. Of course also the new buyers could choose the 8 dollar plus 5 coupon price, but in a small town you quickly exhausted the buying power. So the people who got in later bought the bike for 13, instead of 10 dollars. And the seller got 13 dollars for his bikes practically from the beginning.
At first sight, this system is not suspicious at all. It’s just a normal marketing trick with coupons. If we add some gift for the coupon holders, the cover is perfect.
A pyramid game recently: Kairos
The company Kairos, – headquartered in London – offered storage space for large entrepreneurs, and 150% profit for the members of the network. The essence was, when someone enrolled in the network, a client program installed on his computer, it reserved there a certain space, which was then rented for business clients. The matter bleeds from several wounds, because serious server parks offer, lightning fast server with automatic power failure and fire protection, cheaper by far. Grandma’s old computer, with which she sometimes skypes with her uncle, can’t compete with that. The company Kairos has declared bankruptcy and the members of the network can write off their investment. To this scam was necessary that many ordinary people, who have little idea about computer science, but firmly believe in luck, open their wallets. But I could have said the OneCoin cryptocurrency, because according to the freshest media reports, at OneCoin there are arrests, and indictments, instead of the big money.
What do the camouflaged pyramid games have in common?
These pyramid schemes have an elaborate disguise and they always make great show. They promise unrealistic sales, and very quickly. For example, people can pre-register for such products that don’t even exist yet. But when they are ready, they will be without competition. Those who register already get these wonderful products for a fraction of their actual value. Unfortunately, we too have had partners who have been seduced, but the “bomb deal” has bagged. The miracle thing was not finished.
Why are so many being fooled?
Most stubbornly believe that success simply requires luck. They don’t see the oodles of work, failure, and learning that go behind most successes. Sadly, too many believe that to succeed you must be “born into it.” And if we’ve already missed that, then we need to be in the right place at the right time. In my opinion, that’s why so many fall for the tricks of the scammers. These crooks show the luxury that can be achieved, they use sophisticated persuasion techniques, and the victims allow themselves to be talked into it.
Borderline case between multilevel marketing and pyramid game
There are companies that practice legal multilevel marketing, but the demand for their products, or for their services through shows, is artificially generated. Remember Talk Fusion or its competitor, Iwowee? Both offered video mail. In the beginning, business boomed because the show was big. But the service wasn’t really a big deal. Anyone can record their video message on their cell phone and send it on through hundreds of channels. This service doesn’t seem really sales capable to me, actually only the members of the network bought it. Nowadays you hardly hear about these companies. Their key to success was the big promises and window dressing.
I can’t trust the companies that collect and analyze our “body fluids” to tell us whether we need their products or not. Or rather, of course we need these products, the question can only be how many products. Of course, these products can be excellent, but if the company considers it necessary to try to manipulate me, I am already suspicious.
How can you avoid the traps?
You can be suspicious when someone brings the news about a sensational business opportunity. Where you don’t have to do anything at all, just buy a startup package. It is very suspicious when someone invites you to a demonstration that takes place in the luxury environment. Question from you if I am such a valuable customer that this splendor is justified. Or are they just trying to blind me?
Look up the background of the company! Kairos has shared its London office with another 500 companies. That’s kind of suspicious, isn’t it? Look up the company’s certifications! The “tested quality”, or the “medical device” does not seem to be a serious qualification to me. Search the internet to find out what exactly this certification means!
And finally, your way of thinking. If you do not believe that you can get rich doing nothing, you are as good as protected.
What a reputable MLM company offers, versus a pyramid scheme?
Really excellent products, or services, with true demand. Important that the price-performance ratio fits. It is not the show that makes the product marketable, but its quality. An honest MLM company, also has honest reimbursement plan. This guarantees that the work done will be paid, and anyone can become successful, no matter when he signed up. So the company pays only to the one who has worked, but pays him for sure.
The safe way would be to say “no” to everything?
Oh no, not at all. As I mentioned this before, saying “no” to a good offer is bullshit. Let’s take the DXN company for example! It is already 26 years old, the Reishi coffee is not a new idea. It is without a doubt the largest Reishi mushroom manufacturer in the world. DXN has valuable certifications that their competitors have not received. This data is all open and controllable. We do not promise quick riches, on the contrary. Learning and working is what we offer, but we can promise one thing. It’s worth the effort here.
Picture a scene. You are locked up in a forced labor camp for 40 years. You’re only allowed out when you’ve served your time. DXN is a spade that you can use to dig a tunnel under the ground to freedom. For this you need a rather long tunnel and you have to dig it yourself. Now, would that be enough for you to start digging, or will you stay in jail?
Now what is the reason why so many fail in MLM?
In multilevel marketing are many who want to achieve such a change that nothing except your wealth changes. Of course, in the positive direction. Most do not want to learn anything, they do what they think is right. In most cases, this hope is false.
They push the responsibility on their sponsor or on their sponsored. As Eric Worre mentioned: Your success or failure in multilevel marketing is yours. You can’t blame anyone for it. Michael Strachowitz says to succeed in MLM you don’t need a sponsor or upline. You only need a downline.
I hope I could help and I wish you that you can free yourself from the hamster wheel. As Eric Worre says: This is a better way.