A pyramid scheme is a hierarchical scam that exploits unaware and desperate individuals as a source of income. No one actually earns money or provide services; everyone is just busy looking up some new recruits to steal money.
Why is A Pyramid Scheme bad for you?
Well, if stealing money doesn’t count as something bad for you, which I hope is not the case here, the pyramid scheme is still wrong in a lot of other ways. First is the money lost in the market. It’s not sustainable in the long run.
A healthy economy needs everyone doing their part to provide or sell services, and since the pyramid scheme don’t have any “real” services or product being delivered, most of their products are just present for the sake of being legal, it could hurt the economy real bad.
How to spot a Pyramid Scheme?
A lot of pyramid scheming nowadays are being smart. Even some legitimate companies somewhat use the pyramid scheming model to increase their sales, so spotting a pyramid scheme is tricky if you are not clever enough.
A good example of these would be the Usana company, I got invited before by my friend to join their team of Usana dealers, and during that time, it was sketchy for me. Almost everything that I know about pyramid scheme is present during their presentation to me.
- A promise that you can work at an hour of your preference? Check.
- A need to shell out a good amount of money right at the start? Check.
- An attitude to let you be aware that maybe the reason that you are not successful is that you are not working hard and smart enough for it? Check.
- A story about how one of their members bought a car, or became very successful just within a year? Check.
The only difference Usana have which the usual pyramid scheme don’t have? Real products. I’m not here to promote but what I’m telling is that you can spot a Pyramid Scheme by their products. Their products are usually nonexistent or next nothing useless.
That’s the reason why pyramid scheming companies hide behind products that can’t be easily identified if real or not. Examples are beauty products, diet pills, etc. Some of them even go as far as acting that they will provide you data entry jobs if you got recruited, which is smart, what is puzzling though is that why you need to pay first before you can start working.
The difference between a real opportunity and a pyramid scam.
Because the pyramid scheme is rampant nowadays, it would be a good habit to learn how to differentiate them from real opportunities. Opportunities knock on your door from time to time, and you should be ready in providing them welcome.
You just need to be mindful of two things for you to see if it’s not a pyramid scheme. What will you need to do to earn money and what skill will you be able to or need to develop to be good at this. If the answer to the two questions is to lure people inside the company, then you are in for a treat of the old good pyramid scheme, eh.