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In Reply to: Re: Re: Re: Primerica A Pyramid Scheme? hahaha ok posted by JT on February 23, 2004 at 20:57:47:
From what you are saying, it sounds as though if I went out and started a company, say a computer operating system company, hired people to sell my product (which I shared in the profits on, or took a cut of), hired people to take orders on those who call in to order my products (which I shared in the profits on, or took a cut of), and hired people to run different divisions of my company as it grew so that the company could continue to grow (and make more money, which I shared in the profits on, or took a cut of), then I would be starting an MLM company. But I guess from what you are saying, if I changed my pay strucure to a base salary instead of sharing in the company's success, then it would cease to be an MLM company. Is that what you are saying? You haven't analyzed things to much, have you, "just an observer"? -- just passing through.
: : Just a thought here.........MLM? Don't each downline charge more for products to make a profit? I'm sure that don't happen in Primerica......don't think the SEC and NASD would go for that.
: No, that's not how MLM works at all. If it did work that way, then why would anyone at the bottom, when they could get the same product from someone higher in the "chain" for cheaper?
: What does happen in MLM is everyone up the chain takes a cut of the profits. The people higher in the chain are making their money by receiving a cut from all of those in their downline. The products tend to be overpriced accross the board to allow for eveyone up the line to take their cut of the profit. The bigger your downline, the more money you make. However, once the downline grows to a certain size, it would not be possible for everyone to take a cut of the profit and still get some money. So a new "leg" has to be formed at that point. That's why recruting is essential to an MLM operation. The only way to advance up the chain where you can start making real money, is to build a downline so you have money coming in from several people.