Sunday, 3 October 2010

All IDSA members run pyramid schemes

Oriflame India Ltd, a member of Indian Direct Selling Association (IDSA) in its website poses the following questions to announce that it is not a pyramid structured company. Just read and laugh with us. All these companies of IDSA are pyramid schemes. There is not a single company which is not a pyramid scheme.

1. Do you risk financial loss by being involved with this company?
If the answer to this question is yes, we say “be careful.” It may be legitimate but most direct sales firms do not require any substantial investment or risk of financial loss.

(The risk financial loss is inherent in all these companies' schemes. All these companies offer compensation to the members who purchase products at exorbitant prices. Their compensation is very meager and all the members suffer heavy losses.)

2. Is the money you are going to earn primarily coming from the sale of the products or services to the ultimate consumer of those products or service?
If the answer to this question is no, and money earned is coming from some other source (e.g. recruiting or headhunting fees, inventory loading, sale of sales kits and sales aids), you then have an illegal pyramid scheme and we advise people to stay away. It is that simple.

Please note that we include in our definitions the sales to salespeople for their personal or family consumption as sales to the ultimate consumer. There is nothing unethical or illegal in compensation based on personal or family consumption, so long as the amount purchased for such personal and family consumption is reasonable and the products are reasonably priced.

(They hardly get any income from sale of products. They would get income only through enrollment of new members.)

3. Would you buy the company’s product if you were not a member of the sales organization?
If the answer to that is no, you would not buy it, then why would you want to sell for a company whose product you do not think worthy of purchasing, whether for your own or family’s or friends’ usage.

(All these companies anyway insist that you should become a member to purchase products. That it itself is a racket. and a pyramid scheme since enrollment is core issue for all these companies. Without enrollment not a single company survives.)

This is how these companies mislead people on pyramid schemes and try to convince them that their business model is not pyramid scheme.

Have a glance at Prize Chits and Money Circulation Schemes (Banning) Act, 1978 to identify the pyramid schemes.

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