Pyramiding Scam
Posted on April 16, 2008 - Filed Under Personal
Beware of these companies who tell you that you will get rich by recruiting your friends, investing 8,800 pesos and selling their warehouse items with a 50% profit. Be wary, you might be in in a pyramiding scam. I also kind of victimized by this but not so much because in the end, I was able to get some of my money back. Yes, I know, I was stupid. Anyway, I have got to let you know of this because you might get tricked into going for this kinds of businesses.
It all happened after I got back from working in Taiwan when a friend of mine recruited me , promising a lot of returns if I invest 8,800 php. He showed me a couple of checks as payment from that company he registered for and stupid me agreed to join because hey, this promises a ROI ( return on investment, silly ! ) . My friend told me that, anyway, it is not actually 8800php that you are giving the company becoz out of that, you will be entitled to shop at the warehouse for items worth 2000, so that I have something to show to my prospective buyers . This company sells leather and synthetic-leather shoes and bags. also shirts, toothbrush, etc but you buy the items less 50% off its warehouse price, then you sell it to its original price example, the price of the leather shoes was 1500 at the warehouse, you buy it for 750, then you sell it for 1500. Simply said, you get a whopping 750 as profit, right? If I can remember exactly, you also get a rebate of 1000 pesos for every person you referred ,who joins and of course, pays 8800 ( he, by the way, becomes your “downline”).
As I have said, I did agree to join, so he accompanied me to Ortigas for the orientation. I paid the full amount of P8,800.00 then after that, he accompanied me to the area where I can see the products . I was not impressed because they were way too expensive even if I will be getting them half their price, and they weren’t even expensive looking , as compared to the leather shoes or bags I see at my favorite department stores but nevertheless I had to already joined so I had to take my pick so I can go home.
Several months later, I received a check worth 1000 pesos because my friend was able to recruit his friend and he made him my down-line. I should be happy now, right, this is money right here but I was not, all I can think about was, he recruited that guy so that he will be my down-line, so that I will earn from the rebates, so that I can get back my investment. But now it will be a cycle. That poor guy will also have to recruit so that he can have back his own investment. Sure it can make one rich if he can encourage more people to join but what a way to earn money, right? I was thinking, what in the world possessed me to join this company? Now it would be a recruit-and-recruit thing to get back my own money and I didn’t like it one bit because I don’t like fooling people, that is not me at all coz I don’t want the same to be done to me. And if you will ask about the products why I don’t want to sell them, I don’t intend to really because they were way too expensive. I wouldn’t even buy them if I were the customer because I can buy the same item directly at the department stores at maybe lesser price. So there I was, thinking what a rut we’re into now, how we are not gaining from this at all. The only people who are truly gaining from these were the recruiters at the top of the pyramid and all the other manufacturers of the products they were selling. It’s easy money for all of them because of the initial registration fee of 8,800 plus you buy in cash everything that you will be taking from their warehouse. Once you have paid them, what more do they need of you? You will be solely responsible for those items that you bought, whether you will be able to sell them or not.
This company boasts that it is helping the Filipino people but in my opinion they are not. How can that be when the money that they ask from people who join was 8,800 ? If it is truly for the people, then they won’t require that much since with the way things are going in the Philippines, 8,800 is such a big amount already. I like the way Avon, Sara Lee and all the other direct-selling companies of similar kind are doing their business. They are truly for the people since they don’t require a very high registration fee, you can get their products on consignment basis and you will truly be proud of the items you are selling to your customers because for one, they are very affordable and are good quality products too.
So next time you think of joining a direct-selling company or a marketing company, go for those that are not too money-hungry that they will require you to pay upfront too much. Don’t get too blinded by the earnings that they show you through their pyramid because they are just showing you the probable earnings. If you are not too good in recruiting and selling, you will not be able to get back that very high investment that you have put in. You are better off using that 8,800 pesos as investment in your tocino or longganisa business than give it to these multi-level marketing companies.
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