What to Do?

[Spinal]

I have a qualm... and need some collective advice.

My other half's sister has signed up to a company called "Arbonne". After patiently listening to the entire sales spiel, I was even more suspicious than when I started. To me, it sounded like a pyramid scheme.

The essence is this (apologies if I didn't get it 100% right); you sign up, and sell beauty products. You get a commission on whatever your "clients" buy.

That said, if you sign up other people to sell the products, then you get a percentage of what they sell as well. This is where I got suspicious. The entire pitch revolves around how you could get rich by signing up hundreds of people, then you can sit back and just watch the money roll in as others sell.

A quick google shows quite a few people referring to the organisation as a MTM and pyramid scheme. Also, having a look on sites like ebay show the products for sale at a fraction of what it would cost buying through an "agent".

Now - I don't want to be the guy that isn't supportive - but I'm concerned that she is getting into something that will waste her time.

What would you do? Would you voice your concerns?

If I don't and it all goes wrong, then I just sat there and watched it happen... but if I voice my concerns I'll just be the usual cynical person who doesn't support/believe in them.

Ideas?
M.

 

[MercFanUk]

I can't offer much, but isn't that how companies like Avon etc. work?

 

[LTD]

Typical pyramid scheme.

 

[MOCAŠ]

Personally, I'd run a mile.

Reminds me of a company called Amway. About 20 years ago, I was invited to a "seminar" by a former colleague who'd recently discovered this company. I went along out of curiosity, and found myself in his local village hall with about 12 other people. He then proceeded tell us how we were all going to get rich, not by selling the range of domestic cleaning products laid out in front of us, but by persuading everyone we knew to sell them instead - providing us with a share of the profits. While some of those in the room seemed taken in by the prospect, I saw 101 flaws in his fool-proof plan - the main one being that I simply had no intention of imposing such a burden on my friends and contacts.

I don't doubt that some have got rich from these schemes, but I do wonder whether they have any friends left or are really happy with their lives.

 

[Spinal]

Fully agree that it's probably a pyramid scheme (albeit tweaked enough so as not to fall foul with trading standards) - but what should I do?

Voice my concerns or stay quiet? (and if voice... how?!)

 

[MOCAŠ]

Fully agree that it's probably a pyramid scheme (albeit tweaked enough so as not to fall foul with trading standards) - but what should I do?

Voice my concerns or stay quiet? (and if voice... how?!)

No point in being supportive (silently or otherwise) of an endeavour that is likely to bring her all kinds of grief. Perhaps, having done a bit of research, you could broach the subject by taking an interest in what she's expecting to get out of it, and then pointing out the facts of he matter. Seems like you already know it's a bad (or at least fruitless) idea - you just need to make her see this, and perhaps overcome any "brainwashing" she's undergone. Easier said than done, admittedly.

 

[Ted]

If it is a pyramid scheme, show her the maths.
Find out where you would be in the pyramid ( how many 'agents' are there already)
Then go through the progression eg - each agent signs up ten agents, after how many generations will there be more agents than customers?

Mind you, explaining logic to a woman.....

 

[markjay]

Just to say that with regards pyramid schemes in general, those who got in on the game early do actually earn a living out of it... setting aside the morality (or lack of) of pyramid schemes, if it's a new one and she makes a bet that it will catch on then if the bet pays off it will be worth her while. If, on the other hand, this particular scheme has been around for a while, then she is wasting her time any money. And of course there's the question of whether she has the right personality to convince others to sign up. It is usually the clever, energetic, and chatty types that do well.

 

[Deleted member 37751]

Tell them it's a rip off.

I've got one friend that jumps on these sorts of fads like there's no tomorrow and it's usually left up to me to be the bearer of bad news and put him straight.

One such fad was you sign up to this energy company 'best price' tariff for a monthly fee, the sting in the tail being that the monthly fee outweighed any sort of saving you might get. As soon as I pointed it out to him, I was 'bad news Barry' as per usual, but after a couple of days pondering, he realised I was right.

 

[davidjpowell]

It's unlikely to be a pyramid scheme, the owners of Amway (a car dealer), went to jail. A lot of companies operate home selling schemes like this including Avon, Bodyshop, etc...

They do rely on getting the parties, and recognising 'recruitee's' at the party.

 

[Igurisu]

It depends on you and your relationship withg your sister in law. If its a good relationship, then tell her what you think and why. If the relationship is OK, then she won't mind even if she doesn't agree with you because she will know you are only trying to help.

If its not a good relationship then keep quiet, no point trying to be the smart **** and turning round in 1 year saying "I told you so".

 

[PXW]

I think I would have to say something, regardless of the quality of the relationship. I don't think my conscience would permit me to let someone I knew go down this road and just sit quietly by knowing it wouldn't work out.

Perhaps an approach along the lines of 'I'm not trying to be funny or critical here, but I've been reading about this company and it's got me concerned for you...'

 

[Bellow]

Ask her bluntly where she sits in the pyramid? If she's at the top then issue the warnings as per other posts. If she's anywhere else in it, issue the warning that she wont make much but most likely will lose her friends.
It's up to her after that to decide to pursue it or not. If she doesn't, then your words were of use. If she does and succeeds, your advice let her see that her early adoption was key. If she pursues it and fails - she was warned.
All bases covered?

 

[Spinal]

I've had a chat with my other half - she's having a read up on the company (aparently, they filed for bankrupcy in 2009 in the US, then got bailed out. Then, they were investigated in the UK by trading standards.)

I think it may be better if she approaches her sister - they have a closer relationship and she will know how to handle it better than me.

I'll keep you up to date on what happens... (the funny part is, one of the "perks" if you get high enough in the pyramid if you get a white merc... why hasn't this been on the forum before?!)

M.

 

[Dec]

Tell her to read this... Pyramid scheme - Wikipedia, the free encyclopedia

Dec

 

[Buster'stheboy]

I think it may be better if she approaches her sister - they have a closer relationship and she will know how to handle it better than me.

I agree, leave it to your Wife. Especially if S.I.L.'s already signed up to it.

 

[Jonathan_T]

It's unlikely to be a pyramid scheme, the owners of Amway (a car dealer), went to jail. A lot of companies operate home selling schemes like this including Avon, Bodyshop, etc...

They do rely on getting the parties, and recognising 'recruitee's' at the party.

This is nothing like Avon (SWMBO is an avon lady). Avon has reps who are "managed" by an area manager (avon employee).

This is a pyramid scheme and WILL fail and WILL cause financial loss to the vast majority of people silly enough to get involved with it.