My friend tried to recruit me in a pyramid scheme, so I interviewed her boss

1

Anna Landsverk

landsveran@mnstate.edu

Everybody could use some extra money—or at least we think we do. So, when someone offers an easy way for broke students or recent graduates to make money, it makes sense to jump at the chance.

The phone call seemed benign enough; the area code was from the Twin Cities, and the woman on the other end said she knew one of my friends, who had referred me as a good possible job candidate.

“Awesome,” I thought. “My friend got a good job after college and wants us to work together.” We started talking about her business and what exactly the job would be, which is when I got suspicious.

You know it’s going to be bad when the broken record starts coming out. Her tagline: “We help educate people in creating a passive style of income by making their own asset.”

I was already suspecting this was a major serving of BS, since “passive style of income” is the new equivalent of the old “make millions from your home office” con ad that plays at 2 a.m. on cable stations no one watches anymore. But I couldn’t help being curious—what miracle were they selling exactly?

This was where things got tricky. The only way I was going to get the truth from this woman’s polished sales pitch was to throw her off her game. So, when “Ashley” asked me what my major was and if I knew what an asset was, I decided to tell a little white lie.

“I’m actually an economics major, so yes, I know what an asset is. What kind of asset exactly would I be making with your company?” Cue a slightly startled silence and a quick modification of Ashley’s strategy. I’m actually an economics minor, but I know just enough to make people think I know more than them.

“OK, so there’s assets like an oil well or a Subway franchise, I guess you would call them physical assets, that generate income for the owner without them doing more work after they buy the asset.” This actually isn’t true, as at the very least you would have to hire managers and staff and order parts, stock and maintenance for whatever you bought, then check up to make sure no one is embezzling from you. But sure, the basic premise works.

“But those types of assets cost thousands or millions of dollars, and most of us don’t really have that kind of money lying around.” Here Ashley gives me an “isn’t income inequality funny?” laugh. “So we teach people to make their own assets for a fraction of the cost.”

“And these are physical assets?” I ask, fighting through her purposefully vague claim.

“Well, not exactly. We’re helping companies create more revenue online.” At this point, I have a feeling I know what this is, but I want to poke around more.

“So do you have people buy within a network of your partner brands, and get people they know to do the same?”

She reluctantly agrees to this, then proceeds to rattle off a list of big-name corporate partners to impress me and mentions something about receiving “points” for the purchases I get through my website, should I choose to join the team.

She’s gunning hard for me to show some real interest and asks if I would be available for a phone conference call the following night (a Sunday) to learn more about the business from a man who was a “financially independent” millionaire in his early 30s all thanks to this so-far nameless company. I politely decline, stating that I have a life and need more than 16 hours to think about taking on another job.

She seems disappointed in me, and I do want to know more about the “business plan” that sounds like an online version of Herbalife on steroids. I agree to a Skype call with her the following week to learn more.

Next week rolls around, I get the call, and Ashley leads with a quick introduction before firing up a PowerPoint and pointing her phone camera at it. This seems impractical, and I consider asking Ashley if she could just email the presentation to me. I quickly realize this is a dumb idea, since I can barely ask Ashley the name of the company she is so desperate to have me work for before she starts rapidly changing slides. Instead, she cuts off with a sharp, “Hold on, that’s on the next slide.” Clearly this presentation isn’t meant to inspire questions.

I find out that this “company” is a partnership between Amway (known affectionately as Scamway by its former employees) and LTD, or Leadership Team Development.

Amway is a direct-sale retailer that hires sales representatives to sell their products to consumers and businesses in exchange for a commission. LTD trains in those representatives and builds teams of people to sell more products. I am repeatedly reassured the companies are legitimate with terms like “BBB-certified,” “national retailer” and “huge corporate partnerships.”

This sounds harmless enough, but LTD repeatedly reiterates that the way to make the “real” money is not to work hard at selling as much product for as many “points” as you can, but to get other people under you to do the selling for you. Then you can get a “bonus” from their sales and use their points to move into a new “percentage bracket” of profit from each of your sales that month.

Ironically, to make her (no doubt corporate-made) presentation visually interesting, Ashley had a graphic of little teams of people under more powerful-looking people until it formed a very wide-based pyramid.

Best of all, the starting cost for this “self-employed position” is just $200! There are also helpful “suggested readings” with titles like “Live the Dream: No More Excuses” and others that I couldn’t read before the slide was whisked away and replaced with more graphs, charts and figures implying easily achievable wealth.

After an hour of this spiel, Ashley wraps up our delightful evening together by asking what my interest might be. I give her the politest “I’ll have to think about it” I can manage and hang up.

Just for fun, I decide to dig more into the companies and realize that even Googling “Amway” and “LTD” together brings up countless forums asking if they are scams. John Oliver even has a hilarious monologue on multi-level marketing, or MLM, which includes a reference to Amway.

Unfortunately, I wasn’t convinced to take the gorgeous opportunity Ashley threw my way, and I hope other students are similarly unconvinced. I’ll stick to working at McDonald’s, thank you.

 

1 Comment
  1. Alex says

    Articles like this make me sad. Not because of the person doing the interview or in this case set up, but more because this industry is good for so many but NOT for everyone.

    Yet again, the person “selling” the business was talking in circles and not giving answers to the person asking the questions. Why do they think this is good training???

    I don’t blame people who are nervous to join when they can’t seem to get basic information, like the name of the company for example. We keep sending people out to “recruit” (I hate that word) with no training or really bad training.

    I personally own two brick and mortar businesses with “assets” and those “assets” mean nothing! In my case, if something goes south, I am left with dry cleaning equipment. Not exactly in demand and if I can sell it, it’s pennies on the dollar.

    It would be the same for any asset. The bank doesn’t care about a warehouse full of product, they want their money. So when people say you need to have assets or a building to be called a real business, I call B.S. on that one. Unless you own the building, that’s a different story. But most businesses don’t.

    The people who usually say that have never run a brick and mortar business anyway. They are just repeating what they have heard like parrots.

    I also am involved in two network marketing companies. I did my research and find that my new asset is my list, not all the overhead I have with my so called traditional business.

    My team is my asset. My customers who buy my products are my asset. I don’t want to create a product, get all the patents, government crap, order tons of inventory, find a place to store it, worry about staff and on and on and on.

    I can run my “business” from home or anywhere in the world, or in my case 54 countries. This is why I am starting my exit strategy from my brick and mortar businesses. I don’t want to be the landlords bitch or always worry about rising water, gas and rent bills. Sorry but I don’t need that kind of asset.

    People also say, “what if your network marketing company closes it’s doors”? I might not have a product, but I can find another product(s) and be in business within a week. Why? Because my team that I have helped will follow me because they trust me and my customers will buy from me again because they trust me too. So, my list or asset is in place without the cost.

    Remember, I did my homework so the odds of the company closing is pretty small and my team knows this.

    Oh and one more thing, I don’t have to spend or borrow a ton of money to start a new business. My dry cleaning business was over $100K and my two network marketing business were around $2K combined and the money does take time to make but most traditional small businesses don’t make money anyway. Google it!

    Just as a little side note, people think real estate agents, insurance sales people or even mortgage brokers are “legit” business people, also commission based by the way. Most of them never list a home, never sign a mortgage or sell a policy. Again, google it.

    Not because the businesses are bad but because it’s tough out there and all markets are saturated. Again, not trained properly in marketing, just pushed to cold call. Doesn’t work but that’s just my pet peeve.

    Many people say that no one makes money in network marketing. Well, do some more research because the numbers aren’t great in most businesses these days. Sad, but true.

    Now for those in network marketing, listen up! For the love of god, stop being so sketchy. Be honest, be proud of your product and company and if you’re not, then maybe find something you would scream from the roof tops.

    If you are honest and really want to help people earn more money part time, do it from a servant point of view, answer questions and tell people what your company is. Trust me, even if they don’t want to be involved in network marketing, at least they will respect you as an entrepreneur and not some “pyramid scheme person”.

    In many cases, like the person doing this “interview” they weren’t even trying to be open minded, and the person selling should of realized this and just gently closed the door with a polite, “I don’t think this is for you”.

    Oh and one ore thing, for those who think this is a scam, some are but most aren’t so maybe cut the person who is trying to make a living some slack. At least they are trying to make money for their family and most are just being trained poorly. It’s not their fault. Be gentle with them.

    You might also like the product if not the business. Most large companies that you see on the shelves put all their money into marketing,not the product. They also pay a ton just to be on that shelf, did you know that?

    Just try the product and if you don’t want the business, at least you are enjoying great stuff at wholesale prices in most cases. You might just change your mind. Just saying.

    I really had no intention of replying, but since I am up early with a bad cold, I thought why not give a different perspective on this article.

    Nothing wrong with McDonalds either. Well other than you don’t get a piece of the business for the rest of your life. Sorry, I coudn’t help myself.

    If anything, I hope this gives people something to think about. If it’s not for you, you don’t have to crap on it. Just say “this isn’t for me”.

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