Mining Rigs in General almost look like MLM schemes given the difficulty rate of Bitcoin... what can we learn from warnings about MLM and BFL tactics so far somethings may or may apply but it is interesting to compare especially given the action of BFL to cancel Xian01's order.
Twelve Tests for Evaluating a Network Marketing (MLM) “Opportunity”
By Jon M. Taylor, Ph.D., Consumer Awareness Institute
The following tests should help you avoid programs in which you will only be wasting your money, time, and effort.
THE OPPORTUNITY TESTWere you approached primarily on the basis of the actual value and need for the products—or for the “opportunity?” If the latter, the program may be actually a pyramid device for enriching the company and a small group of upline distributors.
Another red flag to look for is promoters who talk of “getting in on the ground floor” or “riding the wave” of opportunity. Usually, the bulk of the income in these cases is already locked in by the founding distributors in the pyramidal hierarchy.
THE MARKET REALITY TESTAlso, ask if the company allows unlimited recruiting of distributors in an area—with no territorial protection or other provisions for preventing market saturation? If so, you may be buying a ticket for a flight that has already departed. You could be left holding a bag of empty promises and a worthless ticket.
THE PRODUCT TESTReview the products offered and ask yourself:
Are products of consistently high quality, and do they carry a buy-back guarantee? Can all product claims (such as health claims) be backed up by reliable research? Are orders filled and shipped promptly? And are manufacturing and expiration dates printed on consumable products?¸
THE COMPENSATION TESTWhile a few distributors at the top of the pyramid will be rewarded handsomely, as many as 99% (over 99.9% in some programs) of distributors beneath them will come away empty—most actually losing money, after subtracting expenses and product purchases. Also, in some programs, your quitting merely enhances the income of your upline—because income from your downline “rolls up” to those above you.
THE INCOME DISCLOSURE TESTIf less than 1% of all distributors earn the equivalent of a minimum wage for their time (after subtracting all expenses and MLM products purchased), you might want to consider a more profitable use of your money, time, and energy. (Some researchers estimate that for most MLM programs, less than 1% of distributors ever turn a profit.)
THE “PAY TO PLAY” TESTThis requirement (or strong suggestion) that you make large purchases of products over a period of time to qualify for increasing bonus levels or purchasing discounts is one sign of a product-based pyramid scheme. After months or years of fruitless effort and a garage full of products, some participants come to realize they have merely been paying into a pyramid scheme in the form of payments for unneeded products.
THE PRICE TESTIf products are priced at a premium to support a large network of distributors, then the premium portion of the price could be considered the pyramid portion. So if a MLM product sells for $40 and a comparable product would sell for $20 at a typical retail outlet, the $20 premium may be deemed the pyramid portion of the price and would flow to top distributors in typical pyramid fashion.
THE GOLDEN RULE TESTHow did you feel about the way you were recruited to do the business, and how do you feel about approaching your family and friends in the same way? How important are your relationships to you? Are you offended when they attempt to exploit your connection with them for monetary gain? Would you want to do the exploiting?
THE TIME FREEDOM TESTThe perennial dream of those with a pyramidal mentality is to be successful at recruiting a downline that will bring in enough money to support them so they won’t have to work themselves—thus giving them “time freedom.” They can then “leverage” their time by living off the efforts of others. If a recruiter promises that by working hard for a brief time period you will never have to work again, ask what percent of their top distributors are no longer actively involved with the company—and never attend opportunity meetings.
THE HONESTY TESTHas the recruiter been devious or up front in his or her inviting attempts? And can the products and “opportunity” be sold without making exaggerated product and income claims? Ask for validation of each of the claims made.
If you find the truth frequently distorted, powerful and escalating incentives may be driving the recruitment. If normally honest persons feel the need to exaggerate
claims to sell the products and the program, you may find yourself having to do the same.
THE CREDIBILITY TESTMLM promoters who don’t command respect themselves may lean heavily on the “credentials” or “character” of others involved in the “opportunity.” If such references are used to excess, watch out. Such credibility links can be deceptive. Why? Because the ethics of MLM are so tricky to sort out that respectable and high level people have been drawn into the most problematical of programs.
THE SUPPORT TESTDoes the company offer an adequate support infrastructure to handle a temporary burst of volume? Will your upline be there when you need them, or do they have a history of jumping ship when the next hot MLM deal comes along?
A FINAL WORDIf you have found this flyer helpful in deciding about participation in MLM, you could be doing your friends and family a favor by sharing this information with at least five of them. Then ask each of them to share it with five more persons, and suggest they tell each of them to share it with five more, and © 2000 Jon M. Taylor. This flyer may be reproduced in its entirely for consumer awareness, but may not be sold or packaged for sale without the author’s written permission. It has been designed for easy reproduction on 8½ x11-inch paper.
For more information on problems with network marketing and possible solutions, visit our website—
http://www.PyramidSchemeAlert.org. Or email:
jonmtaylor@juno.com .
