Pyramid marketing schemes - How not fall into the trap
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This document discusses pyramid marketing schemes and how to avoid falling victim to them. It defines multi-level marketing as a strategy that compensates salespeople for their own sales as well as the sales of those they recruit. The document notes that most MLM schemes fail and warns about signs like associates flaunting wealth from quick money. It also explains some of the challenges with profiting from MLM, such as complicated supply chains, strong competition, and difficulties managing new products. The key takeaway is that if an opportunity promises easy money, it is best to thoroughly research the company and product first before investing.
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Pyramid marketing schemes - How not fall into the trap
- 1. PYRAMID MARKETING SCHEMES - HOW NOT FALL INTO THE TRAP BY: PAUL YOUNG, CPA, CGA
- 2. PAUL YOUNG - BIO • CPA, CGA • Academia (PF1, FA4 and MS2) • SME – Risk Management • SME – Close, Consolidate and Reporting • SME – Public Policy • SME – Emerging Technology • SME – Financial Solutions • SME – Business Process Change • SME – Supply Chain Management Contact information: Paul_Young_CGA@Hotmail.com
- 3. OVERVIEW This presentation looks at cash investments held by corporations
- 4. WHAT IS MULTI-LEVEL MARKETING • strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation
- 5. SIGNS • Fancy House – • Fancy Clothes • Flash moneys -
- 6. WHY ARE MULTI-LEVEL SCHEMES DIFFICULT TO TURN PROFIT • Supply Chain • Complication of supply chain, i.e. ecommerce and brick/mortar retailers • Competition • Consumer products is competitor. Resellers are competing against companies that have more money/distribution. • New product updates and/or warranty are difficult to managed • Pricing • MLM has to price competitive • Marketing starting • Brand Recognition – Does the company have brand Recognition
- 7. COMPENSATION • You can make lots of money? (99.9%) of MLM schemes fail • Over exaggeration of product – key words “Best product in the market” or “product will sell itself” • Use of high pressure tactics including sex appeal or other methods to entice people to sell the product
- 8. OVERALL • If something is to good to be true then do not believe it • Research the company and product including owners/manager • There is no such thing as easy money.