Hi reader,
In this blog, I am going to accept my biggest and first mistake in my life.
My collage experience:
When I was in college days, as students I have no idea about what we doing and why we want to do that. But after my school days, now I have more concentrate in studies, and I have a dream to complete my college life without disappointing my mother. So I need to move or travel to another city which big compare to my town. In that city, I stayed in college hostel. In my room, there is one student who is my classmate. We become good friends as day goes on. One day, he says that ” I have a big opportunity for you. That opportunity will change your life completely”. That it, after that he say “If you need to know about that, then be ready at tomorrow morning”.
Next morning, when I saw him, he was completed different now. Because of his dress style which is clean and ironed properly. Even I never saw him wear this type dresses for our class room and trip. After completed breakfast, my friend is taken me to that place, when we reached there. I saw many people comes to that place with same colour as him. I asked him,” Is it any function or meeting? Why everyone is dressing like you? Is it life changing event here?”. I asked only few questions to him, but I have so many questions in my mind. After all my questions, he says just wait and you will have a answer very soon.
And he asked me, “If you need answer, then we need to pay entry fee”. I know he simple forgot to inform me about entry fee. But I don’t care about money to pay for entry fee because he is my friend. But I have feeling like bad, but after thinking about that, and seeing many people paying for that. I simply agree to pay the fee because I think if they are paying, then it must worry for money. And I need to know what is life changing opportunity. More than anything, I need to know what change him like this.
Believing what were we seeing:
After paying, we enter the hall, and I saw the different world, which I never saw before. Because most of people look like professional dress and wearing a suit (most of suit I only saw in movie). But, most of people are students and young person, there is only very few adults in the crowd. And hall is filled with loud rock musics and without any lyrics. While seeing the each person, you can say they are fully filled with energy and enthusiasm. Wherever I look the wearing the professional dress and discussion with everyone. I think maybe they know everyone because most of them are students.
After some time, I started to think about “Why is everyone is energy and enthusiasm?””Why is everyone is wearing dresses in same colour?”. After seeing everyone I feel that I doing the right thing. And I am attached to him behaviour because I never saw him like this patient and claim behaviour. And he is discussion with most of people in there.
And suddenly lights is growing on the stage, after that everyone is moving closer to stage. And one person is going to top of stage and ask everyone to pay attention to him. He asked to stopped the music and took a misc and introduce himself first. After that he welcome the another person to stage, everyone in crowd is making claps and sound for him. It’s not stopping for next 5 minutes, he reached stage and waiting for silent. At that I can feel everyone energy and enthusiasm is at peaks. Even it is loud than rock musics which play before. After some time, he asked everyone to sit down and asked to listen to him. But it’s not working, everyone is moving there and there.
After some time, he started his speech by point the finger to crowd and start with,”I am also the one who is standing like you in my old days, I also the audience in past. What I achieved now, I not even in my dreams. And last month, I booked a brand new car Black Audi”. After saying this crowd again shouting like before. After crowd silent, he looked at us, and say,”If I can achieved this, then you can do”. And he explained the his achievements and success. How do he does everything by attending the meeting like this? And after 20 minutes, he finally started to explained the “Life Changing Opportunity”. After everything is completed. I come out with confusing even more compare to before. Because I have more questions then before. Like How can anyone make this much money in short span of time? Or Why can’t everyone is doing this? And so on.
But after so many years, now I have very clear idea about scheme which I attached in my college days. Based principal of scheme and how everyone is believed that? Life changing opportunity is called as MLM(Multi Level Marketing).
Direct selling or MLM has a long history, going back to the days of traveling salesmen in the mid-1800s. Direct Selling in its current form, as we know it today was made popular by the likes of Avon and Amway over 60 years ago. But this industry is still in its nascent form in many emerging markets, especially in Asia, the Middle East, and Africa.
According to Wikipedia,
Wikipedia
Multi-Level Marketing is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company’s products/services, while the earnings of the participants are derived from a pyramid-shaped commission system.
Despite direct selling’s growing popularity worldwide, a sign that this form of business is looking increasingly attractive to aspiring entrepreneurs, especially in countries with high unemployment rates and limited mainstream income opportunities, the industry suffers from a bad rap. One such direct selling company that has built its business on the back of emerging markets comes from the heart of Asia.
History of MLM:
This MLM scheme is started at 1886, a person who started this was Mr. David McNeill, he is one of bestselling writers. At the starting of his career, he has an idea to sell his books at high margin, by giving free things along with his book. So he planning to giving a free beauty product along with his books, who purchase at stores. Because of that, his books selling is increase rapidly, but he still feels that his books is not good reviews and ratings. So, he started to research about that, at that time, he observed that most of people are very much interest in beauty product, not about his books. And many of them believe the book is free for beauty product. After that, he started to concentrated selling beauty product and marketing it.
After few years, he wants to expanded his business across a country. So, he started to hiring more Marketing person, but business is not expanded as expected. So, he need to cut down cost of expenses, he start to hiring a woman and training them to Marketing his products. And It’s was huge success. And he need to boost them to sell more products, so he designed a model like pyramid scheme. That how pyramid scheme is started.
His idea of pyramid scheme:
He research more about a market place, and learn that it still have huge hope to increase his business. But he need more marketing person, but he doesn’t have enough funds to expand. So, he designed a model like communication for any product selling to customer. But it’s not as successful. So he asked his market teams create a business model like they need to find out a disturber for who can sell the product instead of them, whatever they sell commission will pay to both of them. After that, more disturber joined to his company and slowly, he growing his business without any investment or any hard work. Even his market teams are working will high motivation and ask others to join them under them and they will pay a commission for that. You will believe his sell is double in 3 years. After his achievements and success, many people are discussing about his business model because most of them doesn’t believe him at first. And his business model is spent across the world, most of company is doing similar to increase sales.
Spending like virus:
Pyramid scheme making good progress for many of people and company. But when good thing happened, they’ll be very bad things as so. Many people using this model to across the world, and started scam them by using this model.
It’s base idea is, “They need to earn few people trust, after that they will do it for you”. And mostly idea is,”Selling the big dream to small person, after that he will run from this dream. But in reality, he is doing it for you only”.
Most of us will believe our friends, because we know them very well and we feel they will not cheat us. It’s our human nature. They using this as advance for them.
- 99% People lose their money in MLM & Pyramid Scheme
- 50 % people leave MLM scheme in a year after joining
eBIZ:
As per my research, eBIZ is first and well known MLM scheme and one of biggest MLM scheme in India. It’s all started at 2001, by selling the computer course to other at exorbitant prices, even though the study material is available at free of cost on online. Mostly idea for them is increasing its revenue and profit without any investment. So, they are offering a computer course to students who have no in any experience in money and parents will spend more money for studies compare to other. Most of students who joined with them is college and higher education students. While joining to course, they informed to them, “If you can join other students under him in this left and right side of pyramid, then they will pay you some money as commission”. By this scheme many of students joined to computer course, then now they are planning to increase across the state. This scheme are also not affiliated by any Technical Board or University, thus casting is not backed by any their legitimacy. This allowed the company to earn a legitimate income by selling this computer course at a overprice of nearly Rs. 17,000.
The major selling point of the business however, was to introducing people who have bought the course to convince their friends and family to buy the course also. If they have successful joined in this a course, then they would get a small commission. But then these people would have to recruit members of their own (called as down-links) and everyone on the up-link would again get some commission. In this way, the chain would continue. This is called a pyramid scheme or a “money circulation scheme” in India.
Why did the business fail?
Pyramid Schemes or Money circulation schemes are not practical money making scheme. The entire business model basely depends on taking money from one person as enrollment fees for joining the company as sales person and then using that money to repay the loan of that earlier person or up-links. It is like using one credit card to pay another. In the end, there would be no more banks left to take credit cards from you or offer you. Similarly, in a money circulation scheme, there would come a time when there are no more people left to join under them. The entire business model would collapse, then as there would be no revenue source to pay off the debts of the people who have already invested in the company.
The worst affected would be those who have joined at the later stages because they would not get the opportunity to earn income from getting more people to join because there is no one left to do it. When money stop coming, then people will asked the friends and family who joined with reference of scheme. They have no answer for that, so they ask you to wait for some days or asked you to send the another account details or it is not coming because of technical issue. After some time, they simple reality that they in big trouble because of this scheme and they have lose more money. After that, they will hidden for that place.
Arrest of eBIZ Father-Son Promoter Duo
On 20th August 2019, the country was shocked as the Hyderabad Police arrested Pawan Malhan and his son Hitik Malhan for allegedly committing fraud of over Rs. 5000 crores. The father-son duo was promoters of the Company eBIZ which is accused of duping people by operating a fraud business in the model of Multi-Level Marketing (MLM) scam and a pyramid scene. Over Rs. 389 Crores worth of funds held by the Company in different Bank Accounts in the name of the Company and its Directors have been frozen by the Authorities. According to the Police, the Company has managed to dupe over 17 lakes people and add them as its members in exchange for an investment, which was never returned as promised.
Similar like eBIZ, Qnet:
Qnet is also a MLM scheme, but with a real product selling. And according to its own website is a “Global e-commerce based direct selling company that provides customers around the world with unique high-quality products and services while giving them the opportunity to build a sales business by promoting these products.” The company utilizes a multi-level marketing (MLM) model in which independent sales representatives sell their products and receive compensation based on their sales volume. QNET was founded in 1998 by Vijay Eswaran and Joseph ‘Japa’ Bismark who at the time were top distributors for an American direct selling company.
Originally known as GoldQuest because their initial product portfolio included custom-commission collectible gold coins, and then QuestNet as the company expanded its product portfolio and upgraded its e-commerce platform, the company eventually shortened the name to QNet in 2010 as it prepared to enter the digital age.
This scheme is undoubtedly a multi-level marketing (MLM) activity and a pyramid structure of such scheme is prepared so that the members are promised to get money on purchase and sale of products. The motto of the this company is ”sell more, earn more” appears very attractive and innocuous. However, this motto is fully camouflaged. The company stands on a basic statement that people can be fooled. Thus, the true motto is ”sell more & earn more by fooling people”. In fact it is a chain where a person is fooled and then he is trained to fool others to earn money. For that purpose, workshops are conducted where study and business material is provided with a jugglery of words, promises and dreams. Thus, the deceit and fraud is camouflaged under the name of e-marketing and business.
“It is a chain where a person is fooled and then he is trained to fool others to earn money” says Bombay HC.
Bombay HC
How Qnet business is growing?
Recently, my friend message me on WhatsApp (we worked together, & he is not close to me, but we speak when we met), and we have small chatting with each other. And suddenly, he start asking about my dream and my life because I known him, he is not that type of people. After few message, he called me and then asked about my dream and development, slowly he started to explain about Qnet. Suddenly I thought about my same old my collage life experience which is bad stick, and motto is like “Live your dreams, Be your own boss”. But, he is working at foreign countries, “if he believes in it, then he can resign and start doing it fully time”.
At first time, I just ignored that, then I slowly telling him that “People can be stupid, and they think others are also stupid too”, so stop this all. After that, he still doesn’t want to listen to me and stop calling me. Then I let him go try his luck with others and learn from his own mistakes. But it seems that this crap doesn’t have an end for it and those scammers seam to target more and more people every day.
And his main believing about Qnet, “QNet isn’t an investment or a scam”. QNet is a support system for connecting people to products they want and need at prices they are willing to pay because they see the value in it.
Like all commercial enterprises, QNet earns a profit. The people who do the work of selling QNET products also earn their profits. Still, I can’t believe that shit, who will pay high price for product? Even it available at cheap on online? Most of us are fooled by saying some unrelated things and joining them.
Can you be successful with MLM scheme?
Are there people who are successful at MLM scheme. Yes, there are. But they are usually high-level person who joined early and become a gold and silver members who have more than 100 to tens of thousands of people in their network. They had joined the company at a very early stage and had the opportunity to recruit people very early on so as to get dividends when these people further sold anything. But now the pool is all dried up.
Most of Company does not compensate you for travel or accommodation expenses incurred for work purposes like attending frequent conventions or group meetings, which are more or less mandatory as you will be pressurized by your up-links. Even your mobile balance, that you spend in copious amounts to keep in touch with your up-links, is not reimbursed by the Company. You end up shelling a lot of money out of your pocket very quickly without any return on your investment. This becomes a huge downside for trying to get people to join in.
It is no wonder that “95% of the people who invest in MLM scheme is fail to even maintain a team of 9 members – the minimum needed to reach a basic partnership tier of “cycle achiever” (team of 9 people). A minute 2% of people reach the next tier – “silver” which consists of 50 people. And a minuscule 1% of all investors reach the “gold” tier”.
And this scheme is reveals the level of shamelessness and exploitation of new joiners and juniors by high-level gold and silver members of the franchisee. The meetings that the Company mandatory made the juniors go to, at their own expense, of course, was nothing but another slimy money-making opportunity by the early person of higher-ups. These events would be organized for a profit. Passes would be printed and given to the juniors to sell to their friends to get more people into the convention (in an effort to prey on them as new members).
But the appalling thing is that the entire money from the passes would be taken from the juniors beforehand. Now it becomes their liability to sell off the passes that they have already paid for by duping their friends and family. But it has been seen that most people are not even able to recover the money they paid passes, as it is difficult to find people in real life you who will be willing to pay to attend a bogus corporate remind of a pyramid scheme company. As desperate juniors harangue and cajole their people around them, they become shunned and alienated by friends and family.
Quoting wikipedia,
Wikipedia
Indeed, the largest proportion of participants must operate at a net loss (after expenses are deducted) so that the few individuals in the uppermost level of the MLM pyramid can derive their significant earnings — earnings which are then emphasized by the MLM company to all other participants to encourage their continued participation at a continuing financial loss.
Conclusion / Employment law:
MLM salespeople are not employees of the MLM company. Participants do not derive a salary/wage, nor do participants receive remuneration from the MLM company for their invested labor and expenses in their MLM “independent business”. The income of participants, if any income is made at all, is derived only from commissions on their personal sales or their share of the commissions on the personal sales of their downlines (the MLM compensation structure).
As non-employees, participants are not protected by legal rights of employment law provisions. Instead, salespeople are typically presented by the MLM company as “independent contractors” or “independent business owners”. However, participants do not possess a business in the traditional legal sense, as the participants do not hold any tangible business assets or intangible business goodwill able to be sold or purchased in a sale or acquisition of a business. These are the property of the MLM company.