Pyramid Schemes, Multilevel Marketing, & Paying It Forward

Oh, there's a million and more get rich quick schemes on the internet. You can work from home with no experience and make thousands of dollars a week. You can do data entry as a single mother. You can sell Melaleuca. You can write for WikiPeers. You can write freelance.  You can blog about nothing and the dough will just come rolling in. You can learn how to sell things on ebay. You can even create your own promise of work for other people in order to scam them out of their money. Wait- did that last one sound a little weird? Well, so far as I can tell that's what a lot of people do to earn money through the power of the internet. Sure, you could get rich selling Melaleuca or selling things on ebay. You can even find real data entry work. However, the vast majority of the "perfect internet jobs" are not so perfect. Most of them ask you for money up front and never allow you to earn any. Others if you earn any money it is because of the goodwill of your friends and family and beyond that no one will buy anything from you. And if you find any real ones there's probably several hundred other people who have already applied for it.

Specifically I wanted to talk about Pyramid Schemes and Multilevel Marketing. The way a pyramid scheme works is like this: There's a really charismatic guy or girl at the top of the pyramid that convinces a bunch of other people that if they give that charismatic person say, a hundred dollars they then have the right to use that company to convince even more people that if they give them money (part of which goes to the charismatic guy) they can also make money and so one and so forth. So, to recap: Charismatic Person < Top Level < Second Level < Infinite other levels < Money flows along arrows. Got that. And anyone on pretty much any of the lower levels just gives money to the top levels but never gets any of his own. And there is of course the fact that Pyramid schemes never work.

Pyramid schemes never work because of two facts. Fact one: There are a finite number of people in the world. Fact two: There are a finite number of people who will believe that giving someone their hard-earned money now will let them get more money later. Eventually no more people can be convinced and the original person (having gotten a cut of all the money flowing up the levels) lets the pyramid collapse because it's starting to cost money to maintain and maintaining a functioning business is not the goal of the original charismatic person- making money is.

Multilevel marketing works kind of like a pyramid scheme but they sell actual products and the goal of the company is to sell products. As an example I will use Melaluca because I happen to have felt like looking it up lately. They sell these non-toxic soaps and cleaning products and things which are pricey (compared to what you can buy in the store anyway). So say your work-friend Kitty has already bought some of this stuff and decided maybe she can sell it to other people and make money. So she tells you about it and you because you are a vegetarian or have children you don't want dying from eating soap or because you want to help her out you buy some of their products. You think it's a good idea and you might be able to spread the word to some other people and earn a little bit, too. So you become a seller. If Kitty not only convinces enough people to buy from the company and also becomes sellers she has moved up a level and gets more money (I hope.) The way it works is directly related to how large a purchase is. So if you buy $50.00 worth of stuff Kitty gets $5.00 (or 10%). If you convince someone else to buy stuff you can get 10% as well and Kitty gets money, too. You see how the money flows up the levels just like the pyramid scheme? You know how else it's like the pyramid scheme? That's right, you don't earn any money.

I mean, sure, if you work really hard at it, devote time and effort to it, and convince a lot of people to not only buy products but also sell them you could one day become rich doing it. However, if you, like most of us, have a job or go to school or have children, you know anything that takes a lot of time and precludes going out and selling constantly then it's very unlikely you'll make even enough money to cover products you bought from the company. Say you buy $50 worth of stuff because Kitty said you'd like it. You now have to convince other people to buy $500 dollars worth of stuff just to get back the money you spent. Quick- can you name ten people who would want to buy expensive, non-toxic cleaning products and remember to credit you when they do so so as you get your 10%? ....................... Right. I think that was a long enough pause that you either concluded you could not or started to list them and got stuck.

So Pyramid Schemes and Multilevel marketing are both good for that charismatic guy and/or the company itself but not so good for you even if multilevel marketing at least isn't actually out to screw you in the shorts. The third thing I thought I'd be opinionated about a little is Paying it Forward. I may vaguely have heard of the concept of paying it forward before my brother graduated high school several years ago but his graduation ceremony was when I was first really introduced to this idea. One of my brothers teachers told some stories and then said that the point of the stories was paying it forward. And then he gave each graduate two dollars and invited them to pay it forward. Basically it works like a reverse pyramid scheme. The originator helps a bunch of other people who, in turn, feel inclined to help others as well and so on and so forth. This idea is pretty hugely prevalent. There's a country song called The Chain Of Love, it's been featured in advertisements (I vaguely recall them, I suspect they might be some kind of car ad), and used more subtly in televisions and the like. And yet... it hasn't seemed to have taken hold among the population. Has it? I don't want to speculate on what that means for human nature but it turns out that even reverse pyramid scams don't work, giving all three the same thing in common.

So if you're ever tempted to participate in a pyramid scheme, multilevel marketing, or want to pay it forward- pick the last one so at least you're not hurting anyone.