Saturday, January 7, 2012

How Pyramid Scheme Model Works

In one of my earlier article we have discussed about what Pyramid Scheme Models are? Now we will discuss how do they actually work? It is a general human nature that if we see someone known getting richer within just few days and in a way that has changed his life style we want to know how and try to do the same thing.

Suppose one day suddenly you see your neighbor coming in BMW, wearing an expensive suit, carrying a suitcase who has always been in sweatpants you will start thinking how all this changed, all of a sudden. When you go and ask him this thing very curiously then, he tells you about some scheme or distributorship company whose products are very much in demand and people are ready to pay big bucks for its products.

And even better the more number of salesman you hire to work under you the more money you earn. There is just a one time sign up fee plus merchandise fee, and there you are to get started. He tells you once you hire 10salesman under you you will have your own BMW.

You think its a real good deal, no boss, no office work, no deadlines. Very next day you handover your check to your neighbor and buy your kit and get into this business of easy money making. Now in order to get your BMW you go to your other neighbor's, your friends, colleagues, family members etc.

But you get to know that they are already a member of this company and looking forward to get there 10 salesman and they try for you. Now here comes the worse situation. Slowly and gradually you come to know half of the city is already involved in this scheme.

Now no one is not even ready to buy the products as everyone is there to sell the products. And slowly you realize that you are never going to make our money back on salespeople because there's no one left to recruit!" If somehow you recruit 10peolpe below you now they each will need 10 people below them to earn their money that is 100 more salespeople, which is not going to be possible. And this will come to an end.

You will feel as if you are stuck in a Pyramid Scheme Model. Your neighbor and his friends who are at top level of this pyramid are making good money and others who are at lower level had just lost their money. Who so ever that got early in the scheme made money rest simply became fool and lost their money. This is How this Pyramid Scheme model works.

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This is a personal blog about money making ideas and related topics. There might be inaccuracies and the author takes no responsibility of any damage occurring due to the same. The articles posted are my personal opinions that I have gathered over the time span. My opinions are liable to change as I become more educated over the time period. No decision should be made on the basis of the articles of this blog. The author does not accept any responsibility for any damage or inconvenience caused due to the articles and opinions expressed in this blog. The readers are advised to make there research from proper sources before making any investment decision.