Pyramid Schemes

[corfy]

I have spent the last few days emailing a guy back and forth. He has been trying to get me to sign up to what looks to me like a Pyramid Scheme (or some variation thereof, probably just enough variation to be legal, but not neccessaraily moral).

I was just curious if anyone had ever approached you about anything like that, and what you did (did you sign up, did you ignore them, did you do something else?).

I determined from the first email that this was not going to be something that I would be interested in, but I played along with the guy trying to get me to sign up for "F.L." (I won't dignify their activities by listing the link here) and jumped through all of the hoops of gathering all of the available information (and making the terrible sin of asking questions of my own and actually expecting answers), and then after a week, just when he thought he had suckered me into a sale, I suddenly (to his point of view, but not mine) told him to forget it.

Of course, my first clue that this was a scam was the fact that the guy first called me to try to sell me computer supplies (toner cartridges, etc.) at my office (I am the IT guy, but at my office, toner cartridges falls under the heading of "office supplies", which is not my area), and then mentioned this other information that I might find interesting. It is too bad I don't remember the company he was representing for the computer supplies, I bet they would be really interested in the fact that he is selling this type of thing while on the job. Of course, if he was so successful with what he was trying to get me to buy into, why is he wasting his time selling computer supplies for someone else?

And to think, I am probably costing this guy the chance at earning $5k a month like he promised me.

But here is a little excerpt from the email I sent him today (which I was rather proud of). Feel free to use it as you see fit:

The system you are trying to get me to join in sounds similar to a franchise system. I used to work (in high school and college) at a franchise pizza place, so I have a general idea of how those work. But for this example, let me use McDonald's, which is the most famous franchise in the world. In this case, I am going to use McDonald's' name, but I will really be referring to franchises in general, since I really don't know a whole lot about how McDonald's franchises work specifically.

Now, with a McDonald's franchise, the McDonald's corporation owns very few (if any) McDonald's restaurants. People buy the right to use the McDonald's name, logo, and products, and have to find/build a place that vaguely resembles common McDonald's restaurants. The people who own the franchise use McDonald's approved products with McDonald's approved menus, but all of the day-to-day decisions are done by the franchise owner, and he/she is the one who signs the paychecks for his/her workers. Some restaurants may even have a sign somewhere that says, "Ask about how to start your own franchise", and if you do ask, you are taken into the back where the manager's office is and you talk to the manager or franchisee or whoever is in charge, but clearly, the business for McDonald's is selling hamburgers, fries, cokes, and other related products. I'm not going to buy a franchise from McDonald's by walking up to the register or going through the drive-through and ordering one. A certain percentage of the store's profits get paid to the McDonald's company, but for the most part, the person who bought the franchise keeps the profits.

Now, lets compare that with what I see here. In this case, I would buy the franchise rights from McDonald's, and (since this is all a web-based system), the store would be built for me and the employees are hired and are ready to go. Now, the store is open with a drive-in window and four registers. A customer walks in to the store, walks up to the first register, and orders a hamburger. He is told that this register is not for ordering a hamburger, but if he would like to buy a franchise, then the person at the cash register can take the order. So the customer moves on to the second register, and is told the same thing. This repeats for the third and fourth registers. Then the customer moves outside and goes through the drive-through, but is again told that this line is only for ordering franchises, not for ordering food, but if he would like to buy a franchise, it can be set up behind his own home whenever he wants. By now, our customer probably would drive away, but this guy is persistent and has a real craving for a McDonald's hamburger, so he goes back into the store and sees someone actually eating a hamburger. This customer asks where the hamburger was ordered, and is told that he has to walk back toward the restrooms and go into an unmarked door, and there he will find the one register in the building that will allow him to actually order a hamburger. By this system, anyone who actually wants to buy a McDonald's hamburger will (for the most part) have to purchase a McDonald's franchise, unless that person knew about the unmarked door in the back. So we are putting up a system where everybody has a franchise, but very few people actually purchase a hamburger unless they own the franchise. By this system, the only people who really get rich from selling the actual product are the people supplying all of the franchises with hamburgers, but the franchises don't get rich from the product because they don't have anyone buying their hamburgers other than themselves (or they might get a very small percentage of the sales from their own sales and any sales from franchises "below" them). But the money for the franchises gets spread around because every time a franchise is sold, everyone who bought a franchise between whoever bought the franchise and the main company gets a cut. That is why franchises are such a big product while hamburgers are virtually ignored. As long as the franchises get money from the sale of other franchises, they are happy, and as long as the main company supplies hamburgers to each franchise, they are happy (5 million from one store or 1 million stores selling five each or five million stores selling one each is still 5 million sold). It is also a minimal risk for the main company that is supplying the franchises with hamburgers.

That would explain a) why you are so anxious to have me buy into this, and b) why the process for actually ordering {withheld} products is so hidden.

So the first question is not whether or not I want to buy {withheld}, but whether or not I want to buy a {withheld} "franchise". And the second question is not whether or not I want to sell {withheld} products, but whether or not I want to sell {withheld} "franchises". Unfortunately for you, the answer for all four questions remains "No".

I'm not interested in selling [withheld} products or {withheld} franchises, and I'm not interested in buying {withheld} products. If I don't sell the {withheld} product, and I don't sell the {withheld} franchises, there is no way I'm going to get rich, and there is no reason for me to buy a franchise.

[j7wild]

No, I have never been involved in one.

But I have been approached just 3 months ago for one that sells life insurance or something.

[corfy]

I can't believe it. He contacted me back. He is actually accusing me of being naive.

When you see everything crystal clear in the right order, you'll see that the more you thought you knew, the less you really did! I KNOW EVERYONE HATES TO BE WRONG, but when you find out that my only hope, is that you have enough courage to do the $math, so that you will see that all I wanted was to match your commonsense and passion with mine, and we both have exactly the same amount to gain,in addition you would feel lucky that I spent the time for your "Deserving Human Potential" After the $math, pen and paper over the phone, you'll see your stained glass window become clear!

BTW, I am really getting tired of reading the word "$math". It is never just "math", but always "$math". And who would want a stained glass window to become clear? A stained glass window is a work of art, a clear window is not.