Fun with Pyramid Schemes!
I was talking with a coworker yesterday, (coincidentally, he is former American Idol contestant Michael "I'm not gay" Mercadante), and we were discussing all the worthless job interviews we've been to in the past. As it turns out, we both got suckered into going to the same sales pitch/"job interview". As it turned out, this company (which will remain nameless) was nothing more than a pyramid scheme- designed to take advantage of younger people looking for legitimate jobs. This got me thinking about all the evil pyramid schemes out there that overpromise and underdeliver.
One that I came across is called Quixtar, and my mere mention of their name will probably mean I'll get knocked off in the next couple of days. They fashion themselves as an MLM (Multi Level Marketing) Organization. (Latin for "Pyramid Scheme")
here is a quick link that pretty much sums up Quixtar, Amway, and the others: http://skepdic.com/amway.html
Now it is true that none of these methods are illegal, and it is true that there is no "buy-in" to speak of (unlike some schemes), but a lot of the "success" stories you hear about, like the local high school dropout making 6 figures a month with Quixtar, are few and far between. Truth is, the average monthly income for an Independent Business Owner (IBO) is $115 a month. Minus expenses from all the self help CD's they make you buy. Doesn't sound like its worth it, to me....
Now my intention is not to rip these companies. Hell, if you are making millions doing this, more power to you. This is meant solely as a precaution for anyone that might consider getting into one of these businesses. Do your research first....and make sure you have a hell of a backup plan.
And if that fails...there's always the record contract and millions of dollars you get from winning American Idol.
-Mark
posted by MarK at 10:00 AM
35 Comments:
Your blog is great If you have a paranormal issue, I'm sure you'd be interested in deceased loved one There's lots of information about deceased loved one
Actually, it's people like you that have no idea what they're talking about, such as yourself, that are part of the problem and not the solution. I know you think you're doing your public service, but you don't actually know anything about what you're typing.
While I will agree with you that there are many schemes and scandals out there designed to take people's money - I find it rather unknowledgeable of you to make the statements that you've made. Do you even know the definiton of a pyramid scheme or is that just something you snapped up from you fly-by-night "research" website?
A pyramid scam (generally referred to as a Ponzi scam) is a con where there are no actual products being moved, people are paid for the people that they recruit, and only the guy at the top makes the most money. You know what that sounds like to me, Mark? YOUR JOB. Every hierarchial organization is built on a pyramid structure. Government, church and most businesses all use that similar structure. The difference between that pyramid scam, and the pyramid shaped business structure of the business you mentioned (Quixtar,) is that the newest guy can outearn anyone in the Quixtar organization (including their "sponsor") because you are paid on your efforts, not on your position (again, this is unlike your day job.)
Quixtar is simply a supply portion of a franchise model. People aren't "in" Quixtar or employees of Quixtar (unless they work at the corporation itself.) The only difference between the Quixtar business model and traditional franchising is that franchising traditionally is public - if someone wants to start a branch of the franchise, they can only do so by going through the corporation. In the Quixtar business model, franchise owners have the PRIVELEDGE of franchising out to people they know or have networked to. Because they do not advertise their opportunity, the only way to know it exists is to be networked to. You don't sell anyone on the opportunity, because it never reaps long term success. You simply offer it to people and work with the ones that want to do it.
But in fact, that's all Quixtar is, Mark. An opportunity. It is not a job offer or a place for an individual to go and work for someone else for a biscuit. If you had done real research on the company instead of research on a website that won't outlive the company itself, you may have found this out. It is an opportunity to learn business ownership and to use that knowledge to build a volume-based pipeline of business.
Of course, not everyone succeeds in the opportunity - why would you expect that to be the case? How many people are going to end up making six-figures at your job? How many people actually get through college? Most traditional businesses fail within the first 5 years (95-97%.) In fact, since making more than $58K/yr puts you in the top 25% of earners in the nation, how many people actually succeed at any job? I'll take the 30,000+ people that the Quixtar opportunity has helped create an additional $45K/yr+ income on the side, and the over 3,000 self-made millionaires that have been created in that opportunity over the odds of making at a day job any day.
For the record, no one makes anyone buy anything from the education program, but you went to college Mark - how many books did you buy for your classes? Did you actually use all of them? How much did a text book cost you? Your professors did get paid to teach you, right? Or did colleges stop charging tuition? Did you go through training at your current job? Do you have industry information to help you on a daily basis? Don't you see it as beneficial to have an education program in place to help people that have been employees for a large majority of their life to learn how to actually grow a business? For the record, how many of your textbooks were tax deductible? None? Well, every CD or book bought to educate yourself in this business opportunity is, and we all know that deductions as a business owner are far better than as an employee.
And yes, it is true, the average person in the opportunity made $115 a month last year. But did you actually research to find out what "average" meant, or did you again just see a stat and "copy/paste?" The "average" person in the business includes anyone who got started and never bought a product, anyone who is registered in the business, whether they actually attempted to do anything with the opportunity or not. There are thousands of people that get started and change their mind two weeks in, or a month in, or even a year in. Why do people quit? Because people often get excited about the opportunity to own a business and create wealth, but they aren't often willing to do the work. Quixtar has never been marketed as get rich quick - it takes work and no one who is a part of it will tell you otherwise. Of course if your goal is to get involved with an opportunity to be "average," that's your choice also.
In fact, as a part of the opportunity, I won't tell you otherwise either. Like any other family business, it is a labor of love, but a lucrative one. I guess you can chalk me up as one of those "far and few between" success stories. Just so you know, you can chalk up a number of other people in the Chicago area as success stories as well. Where is the manual that explains how many success stories someone needs before they believe something is a success? Or are you content to do research on sites that have editorials from people you don't even know, and have no idea of their motives over visible fruit on the tree? When it comes to research, why don't you send people to real research sites like Dunn and Bradstreet, the Better Business Bureau, and the Federal Trade Commission? Or maybe a site like www.thisbiznow.com that has quotes from everyone from the president of Barnes and Noble to a mayor about the value of the Quixtar business opportunity. Hmm, I wonder why major brands like Disney, Circuit City, Intel, IBM, and others would hitch their name to such an evil scam?
By the way, the cost I paid for every CD, book, seminar and conference I have attended, will be recouped by February - my 16th month in the business. Everything from then on is pure profit. Why did it work for me? I took my opportunity for freedom seriously and duplicated the examples of success I had before me. I also took the CD's out of the shrinkwrap and actually put them to use. But maybe that's just not worth it to you.
Best of luck on the 40 more years!
Cheers
One more thing - I scanned through some of your "research" site, only to find that the business model researched is outdated and underinformed. One of the biggest problems with going to a "research" site is that you don't know the validity of the information.
Go to www.walmartsucks.com. Now, are you going to stop going to Wal-Mart? Right. How about typing "Jesus" into google? How many people are going to stop believing after doing some "research?"
Um...I thought these comments were limited to 300 characters. I guess not on yours!
guess not.
Hey....I just researched Jesus... And now I'm no longer a believer. Thanks for showing me "the way," Anonymous.
Oh, and my Dad has sold Amway since before I was born... The stuff is shite! Over priced shite. My mother hates it, my dad is brainwashed by it, and all it does is cost him a buttload come tax time.
Sleep tight.
Not afraid to speak his my without being anonymous,
-=Rob=-
Well, thank goodness your Dad isn't my upline. Wonderful model he is. Nobody promised anyone that just because you get in, that you'll be a multi-millionaire.
"I have a membership to a gym. I even go once in a while. But when I'm there I hang around and chat a lot. When I do lift weights, I don't do it in any particular order and I don't bother worrying about form. The trainers there have offered to help, but I think trainers are just out to scam me for my money. My friend's, brother's, girlfriend's, uncle's mother used a trainer one time and it didn't work and she lost money. I've been going for years but nothing seems to happen, except for the fact that every month they deduct money from my account for my membership. Man, gyms suck and they don't work. The weights there are 'shite.' It's all just a scam."
Seems ridiculous, right? That's about how credible you sound right now.
I'm staying anonymous because I don't want anyone to get the (wrong) idea that I'm seeking people through this medium. I'm not here to advertise me or the business. Just defending it against misrepresentation.
hi quixbot! glad it only took you 16months. GO DIAMOND!
i joined quixtar yesterday and i already made 80 MILLION DOLLARS!
Well it seems we have a few anonymous CRITBOTS too! What I.J.O. said was Right On The Money! Very well-worded. I made the same arguments for 4 months on qblog, but there are just some very sketpical people, some bitter people, and some just plain morons!
Notice how no one argued Any points you made, they just said the products were sh!te (?) Which clearly tells me the moron has TRIED any of them! The energy drinks are awesome! The meal replacement and protein bars are great, and what imbecile would try to bash the Gift Albums! Those are the coolest gifts ever. Not to mention some of "our products" are from Partner Stores, and companies!
Is Circuit City selling sh!te, how bout Adidas, or Calvin Klein?
Forgive me if this seems harsh, but I've taken a lot of trash -talk from Critbots in the past 5 months: but if you're the type of person that just read cr@p on the Net and you base a business decision on that- you Deserve to stay in a job for 45 years!! If you're too skeptical to even sit down with someone or go to a "meeting" to get some real info, STAY BROKE!
People complain about "success rate" - 1st of all what is "Success"? I have friends in the thing that make $2000/month After expenses that aren't even Platinum yet! I know people at 1500pv that made $700 from retailing some of the drinks!
Not to mention not Everyone is trying to be a Diamond! I know dozens of people who just Like the products, renew every year to get the discount and earn money back! They don't go to meeting, buy CDs or Show the Plan, but they're still IBO's who make $100/month and are happy where they are! But yet you Critbots call those people faillures!
I have a 2nd degree blackbelt in Taekwondo, 1 in about 6,000 people who start a Martial art Ever get there! Did that stop me from setting a goal and achieving it? NO! Because I'm not some broke-minded loser who bases MY success on what someone Else has done!
Go ahead and read these sites, but then also do REAL research, like IJO mentioned. Read what the BBB says about Quixtar, do a search of the Michigan Attorney General website.
Look at sites like www.thisbiznow.com and www.quixtarfacts.com
Or just go check it out for yourself and see it with your own eyes! Instead of just reading outrights lies- like being forced to buy books and CDs!?! Sorry critbots, thats College, Not Qx!... just like IJO said!
Its not for everyone! Is everyone a doctor? Is Everyone a lawyer? No! And not Everyone can be a Business Owner!
You know I've "failed" at things too. I was a Boy Scout, but I never made it to Eagle. Funny though how I don't go around bashing it! I played football in HS, but never made 1st string. I guess some people would try to save face by blaming the coach, accsuing hi of favortism. But I have more character than that! I didn't start cause there were players better than me, and there's only so many spots. If you want to play QB, you better be the best QB out there or you're 2nd string.
But on this team, you can put yourself in the line up. There's no set 3 of positions to fill. You just do the work and get the job done! And I know it works, because I'm Watching it work befoe my eyes! My sponsor is 22 and in college- made $3000 last month! There's a 22 yr old in Iowa that is in Emerald qualification right now in less than 3 years! He's gonna me make over $120,000 this year!
I wish you all the best, in whatever it is you decide to pursue!
p.s. Hey Amy- you're pretty cute!
(Just thought I'd throw that out there ;)
Wow, Tony! Nioce cut'n'paste on everything you've ever said!!
I hope someone lets you know when your opinion means something.
Your little gem here:
"Is Circuit City selling sh!te, how bout Adidas, or Calvin Klein?"
Thery are about as much your "partner" as Coca Cola is with Harvard for having their drink machines on campus.
The fact that you don't get this speaks volumes about how business savy you are.
Have fun selling overpriced overhyped crap, remember, success is just a decision away!!
Too bad you are in no position to make any real decisions ie. the high prices
Nice "business" you "own"
Looks like Tony the Pinhead made it over here. No doubt a visit from the Quixtar Blog. Anyhow Tony you might want to know a blog http://amquixinandout.blogspot.com has posted a few times about you, of course the author has coined you Tony the Pinhead. I would watch your step there though as it appears he wants to present you with some challenges that I doubt you could step up to.
-Mike F.
To the guy whoever defending Quixtar: didn't you hear Fredericks ever said this: “So I don't put anything into my head that's going to cause me to be thinking outside my positive role.” That means, no TV, no reading newspapers.Why are you reading this?
I think people who are thinking of becoming Quixtar IBO's should just take more classes in Maths, then they'll know Quixtar's promises are just full of *shite*, seriously. Take more Maths classes, you'll be much smarter and less likely to be fooled to become Quixtar IBO.
One other thing, Googling Quixtar returns many more websites and news protestesting Quixtar that good stories about it, so, unless you don't trust Google, Quixtar just sucks hard.
Cheers.
I can't believe Tony is back. Will you never grow tired of spewing your poison? Actually I am surprised that "it's just and opportunity" is someone other than you, because he is repeating the same garbage...but wait a second! Of course, it's tapespeak! What a powerful weapon those tapes are, hm? Go, waste your money and buy some more tapes and XS!
To Todd,
It is a pyramid scheme, it is a legal one. It does nothing but rip people off from there money through loop holes in the system. I have done a ton of research into this and I don't mean just one or two web sites. Every web site I see pins quixstar as a pyramid scheme. The only web site that defends it is quickstar themselves of course. I see nothing but people losing money. I too acquired my black belt in Ju-jitsu which is much better than taekwondo that is for sure. You sound like you are brain washed and need help. It is sad that you would defend something that rips people off. Nothing but being brainwashed that's all it is.
Oh I forgot one thing, if you look at the actual products you can buy them much cheaper at Walmart or other stores. I check the price of several products between the product itself and shipping you are almost paying double what you would at a store.
I meant Tony not Todd.
"My name's Todd, that's Italian for Extra Special" - haha - name that movie!
Cut-n-paste? No, no. See I'm sorry the truth resembles the truth. Samething about the tapespeak.
But 1st let me say this, which I have said before: crying "Tapespeak" is the absolute weakest Lame@$$ excuse for a rebuttle. It says nothing! If I say something, or make an argument that some other IBO has said somewhere else - it does NOT make it tapespeak!! YOU'RE the ones that need to think for yourselves. If you can't refute something, you call it tapespeak! Why not just Refute it, instead of being little b!tches and crying "that's just tapespeak". Get a life.
Jay, 1st off learn how to spell Quixtar! And for your info, Qx's site is Not the only one defending it! Go to the Wiki page and Quixtar and you'll see that Qx has Many supporters and proponents. Goto www.thisbiznow.com to hear 3rd party testimonies & interviews about Qx.
Also, you're obviously not a very good Martial artist, because only a TOOL would say, "my style's better than yours". Its the individual, not the style. You think cause Royce Gracie dominated the early UFC's that Ju jitsu is the best. Wrong. It's obviously a great style, but I'd be willing to bet I could take you in a fight because I have enough wrestling skills to keep the match on my feet and then you better know how to strike. I also know a decent amount of submission, so I wouldn't be worried to go to the ground, especially since I wrestled in college. So am I saying TKD is better than jujitsu, no, 1 style isn't better than any other, only individual competitors. But today, you better be well rounded, having a blackbelt in just TKD or ju jitsu is not enough.
You also have the wrong perspective of this business - it does not rip people off. It gives them an opportunity to own their own business.
And I've never seen anyone get financially free from shopping at Walmart. Also, the stuff I buy is comparible to the competition. The XS drinks and protein bars, vitamns, etc. are comparable to the competition. Plus I get a bonus back, and get paid to sell it. You missed the boat jay.
I am an "inactive" IBO. I have not bought a tape or CD, attended a seminar, contacted anyone or shown "the plan" in a long time...but I still use Quixtar for much of my shopping.
Why?
Because it is convenient. I set up my "Ditto" deliveries and don't worry about running out of things like coffee and toilet paper.
Sure, some prices on some things may, at first, *seem* to be more expensive but price is not my primary consideration. I like 9-5 coffee a hell of a lot better than Folger's for everyday consumption, though I also buy Gevalia sometimes (also on automatic shipment- too bad they don't have a deal with Q). I think the Gevalia costs even more than the 9-5.
Yes, I could get toilet paper cheaper at Wal-Mart or Costco. So why don't I do it?
There are several reasons:
1) I have another business in which I charge more than $100 an hour for my services, so that is what my time is worth. If I take an hour to go to Wal-Mart to save $2 on T.P. it just COST me more than $100 extra to "save" that two bucks. Is that smart? No. I'd still be ahead if I paid somebody else to run to Wal-Mart to get it for me, but Quixtar is a better deal than that.
2) I don't *like* going to Wal-Mart or other "discount" stores. Frankly, many of the people who go there are loud, rude, crude and ill-mannered...not to mention the harried parents with screaming children running, pushing and getting underfoot. This isn't meant as a slur, it's just a simple fact. I don't like that environment and I prefer to avoid it.
3) Quality and satisfaction- most of the time you "get what you pay for". If I have a problem with something from the Q store, I just put it back in the box and send it back, no hassle. They make it right.
4) Some things which might seem to be more expensive on a "per unit" basis are actually cheaper on a "per use" basis.
5) If I need to adjust a Ditto order, or I want to shop for extras (like now, with X-mas coming), I can do it any time I want...like right now- I just stepped out of the shower and I'm sitting here with a cup of coffee. I don't even have any underwear on (inside joke). I don't have to get dressed, fight traffic, deal with crowds or any of that sort of thing. I can do it at 3AM if that's when I have the time.
6) Again with the Ditto- I don't have to think about that stuff most of the time, which frees my head for other things...like making more money or busting stock scams or just goofing off.
Quixtar supplies excellent products, conveniently, at a reasonable price with top-notch customer service. This is what they are selling, and it is people like me who are the "target market".
People who spend $5 on gasoline driving across town to "save" two cents on a can of beans aren't going to "get it" or see the value of it. (And many of these same people will spend $20, $30 or $40 on lottery tickets- a tax on people who suck at math.)
Sell me some soap, I'm buying.
I thought that post was awesome! There are more IBOs like that than critics think. I only disagree with one thing. He called himself an "inactive" IBO. He may be inactive as far as building it since he's not showing the plan or going to seminars - but as far as Quixtar is concerned- he's on Ditto, he's doing VOLUME, and perhaps getting a bonus even some months. So when you critics quote the "average income of only $115/month" Realize that this guy is part of that average! Some months he might only do 75pv and his bonus is ZERO! Maybe some months he does 100pv and gets $7-8 bucks.
My point is he's OK with where he is, he's not "failing" - he likes the products, renews to get the IBO price and earn a small bonus! I have IBOs like this on my team! Its OK - it doesn't mean there's anything wrong. So keep That in mind when you see an "average income" report. Some people aren't trying to "Go Diamond" and make $150,000 a year!
Anonymous the inactive IBO, your post was excellent. I enjoy reading the number of posts of people that complain that the business is a scam, but have no refutable evidence to back it up, other than some other complainer's unqualified website.
Rocket, when Coca-Cola starts paying Harvard students for buying their soda on campus, your comparison might make sense, but until then, it doesn't. I do know that branding is a vital part of any business and being that our business partners with 5 of the top 7 brands in the world (according to Business 2.0,) I just find it hard to believe that they would partner with a "scam" organization. For what gain? There is no such thing as a $1+ billion scam.
Tony, I don't know who you are, but best of luck to you in your efforts. At the same time, as frustrating as it may seem, I would suggest not continuing to argue with the same people over and over again. The original post that started this on this blog was aimed at me (I know the blogger personally) and that is the only reason I responded in the first place. I'm guessing your upline doesn't spend much time on the "hater" sites and who has an interest in your success?
Jay, the business doesn't "rip" people off from their money and if you think that's the case, you simply don't understand the compensation plan. I didn't have money when I started this business and now I do. I must have missed the meeting where the rip-off happened. And yes, you can certainly find some things cheaper at Wal-Mart, but they haven't provided me an opportunity to capitalize off their "cheaper" prices.
From a simple math standpoint (since 'long tran' suggested doing the 'maths') if I were to save 20% on everything I bought at Wal-Mart and spent the same $250 monthly it would equal $600/year in savings. That's My first year in business cost me approximately $4,000 (functions, tools, gas, opens, rally's, team meetings, etc.) - all costs that come with a tax benefit. If my business didn't grow in December, my January check still puts me in the black by my 16th month in business and is a bit more than $600.
If my business didn't grow the next 12 months I'd still make in that one year what it would take 40 years to "save" IF I got 20% off everything I bought at Wal-Mart. Add to that the fact that through my associations with my team and wanting to be a proper example, I haven't had a sip of alcohol in nearly a year - so my bar tab has vanished as has other whimsical spending, so I've actually been able to "save" the money that has funded my business.
I don't begrudge anyone what they choose to do, whether it's working a job for 40 years or working this business. If you want to work a job for the next 40 years - God bless you and I mean that from the bottom of my heart. This is not meant for everyone. What I don't understand is the need for you to come on to any site or any blog and rant and rave purposelessly.
Cheers,
it's just an opportunity
To respond to the poster (it's just an opportunity) who claims that quixtar made 3000 millionaires.
Well, you even said that the average income of an IBO is $115 a month. Therefore if there are 3000 quixtar millionaires, that means there are 26,085,000
(twenty six million, eight five thousand) IBO's making NOTHING, in order for there to be 3000 millionaires. 1,000,000 divided by $115 = 8695. 8695 x 3000 =
26,085,000. Simple math proves you are wrong.
Last I heard, quixtar had 340 - 380K IBO's.
Care to verify any of your claims?
Joecool18 I like you. To Tony, I am Italian as well for your info. As far as learning how to spell Quixstar, why I could careless about the spelling of this company. You talk about saving gas and ordering online. Hhhhmmm.... let's talk about that one, my brother in law is caught up in this. Of course he is making no money at it because he spends all his money in gas to go to meetings and meet people. He spends more on buying the products then selling. Why is this because like so many other people caught in this, no sane person will ever buy from them. As far as spending gas money to go to Walmart... I am sure most people like myself have stores on the way home from work. I just drive an extra 500 feet pull in the parking lot and go get my stuff. OOhhhh that is using up so much extra gas. I will finish my comments in a little bit as I have to go take care of something.
My brother in-law doesn't have much money. He lives with his girlfriend at their parents house. He can't afford to get his own place. He ties all his money and hopes on this business that will ruin him. Actually it is ruining him. He is alienating his friends, he is losing his family as they do not want to talk to him anymore. Everything he does is supposedly about the business. He spends money on gas and the books and the cd's.
Now I cannot confirm this but I heard that quixtar uses religion to suck people in. Any legitimate business would not do this, if it is true.
Tony says by ordering online he can save a couple of dollars in cost comparison. Let us cost compare. I saw diapers on the quixtar website selling for 31 dollars or so. Plus like what 4-5 dollars for shipping. I can get the same diapers for 18 dollars at walmart. That is a huge difference and well worth the .50 in gas to go there and buy them.
You talk about Martial Arts which is a different topic all together. I have studied Ju-jitsu, tai-jitsu, shotokan, judo, and nimpo and recently kendo. I am very well rounded. The only reason I ever brought this up was in your posting you brought it up. Any true martial artist would never mention they take it just to prove a point. It is a sacred art and should not be advertised. If you really want to get into it.
One cannot save any money by ordering from quiktar. This is fact, I can do a cost compare with every product on their website. Why would anyone need to order through a sales person or and IBO to order a product? It doesn't make sense at all. No other legitamate company would do that, actually no other company does. I can order anything online that quiktar has and get it much cheaper and most of the time shipping will be for free.
The only reason quiktar has an IBO is because they steal money from these poor brainwashed people.
Jason
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I was looking for blogs about martial arts and came across yours. Great blog you got. I have a website somewhat related you might find interesting.
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another great blog from you guys. i'd point you to mine but it isn't yet the way I'd like it. i do have a website that I think is cool, kind of almost about best martial art for self defense
I'm trying to finish college at MSU and wanted to make a couple of extra bucks. I got scammed quite a few times, but found something that actually makes me about $200 bucks a month now. I know it isn't much, but at least it is legit. You can check it out and I hope it helps you out too.
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