Ponzi/peer amid scheme:
Is our system illegal because it is a Pyramid?

When people asked this, ask them "what is a pyramid?"
Most do not know.

An illegal pyramid and/or a Ponzi scheme are when money is exchanged for money and there is no transfer of ownership of a product. That is clearly illegal.

Our primary function is to move product into the hands of customers.

Everyone is involved in pyramids. Look at any organizational will chart. They are always pyramid.

People may tell you this is not legitimate because there are no retailers. Not true!

Our team and others are putting product and/or displays into salons and massage parlors. We had to start somewhere and we started with beauticians. Our team members have placed displays.

All businesses are similar to multi-level marketing companies. They start out with a manufacturer, a jobber, a wholesaler, a distributor, and retailer. Some businesses have even more people between the manufacturer and retailer. Every one of them takes a cut of the proceeds.

The majority of companies do their best to expand. They expand by getting more retailers for their product. We expand by getting more retail stores for a product and by getting more retail distributors.

Each and every one of you is or should be a retailer. When you are selling our product you are retailing.

Am I saying that multi-level marketing and regular retailing are identical? Of course not. They are very similar. Many regular retail marketers do not like multi-level marketing because they think it takes away from their business. In some cases they are probably correct.

In many cases it does not because the product sold in legitimate multi-level marketing is often a specialty item that the retailer would not be selling.

Even if it is the same type of item the multi-level marketing items is often off higher quality and has a specialist that knows the product selling it. How often do you find someone in a retail store that knows anything about what they are selling?

Could you set up a binary system to be a pyramid? Of course you could. We don't! We have a product that we strongly emphasize is to be sold to retail customers.

We also have a top limit on the percentage of commissions compared to retail sales that can be paid out. If we did not the company would quickly go broke. The safety factor is built in with the 60% of sales commission limit. Many think that the 50% commission that can be earned is very very high. They obviously have no retail experience. I worked for many years for the largest electronic retailer in the country. They had 8000 stores. The average cost of goods to our stores was 48.6% of retail. For the smaller items it was considerably lower than that.


I saw sample goods come in from Japan with the Company's actual costs on them. That was not supposed to happen. I saw that the costs on items that retail for one dollar 98 was $.26.

Do you know what the markup is on jewelry, leather goods etc. You do not really want to know. I have never worked in retail where the cost of goods was more than 60% of retail.

Is that unfair? Of course not. For the salaries, rent, power, insurance, and the multitude of other expenses in a business must come out of that 40%. The 40% gross profit we pay for most retail items usually does not give a very high percentage of profit for the company after expenses are deducted.

I have worked for companies where the owner could have put the money into a low interest bank account and received a higher percentage of return than he was getting in his business. He did not do that and others have not done that just because they love the business.
Bob