Lately, it feels like every time I open up Instagram, I learn that another of my friends has joined a pyramid scheme. Are my friends really this gullible? Is it just my friends? How many beauty products or health supplements can I be expected to buy?
After asking around a little, I realized that this is a widespread phenomenon (at least among the communities I'm a part of). It seems to be mostly recent high school graduates and college students, and usually girls.
I understand the attraction to the idea - you can make money by posting from your phone?!? What confuses me is how people are actually going through with sign up with these companies once they hear what's required of them. The companies are usually asking for some initial down payment to stock product/get a sales license while promising that their employees turn a profit within the first month.
While that might be true for accounts that have thousands or millions of followers, the people I see signing up for these types of marketing businesses are young girls with a moderate following of mostly personal friends, family, and local or mutual acquaintances. This is who they are primarily selling to.
And what do they sell? Overpriced products that promise some type of too-good-to-be-true result. Seeing as most people don't want to pay $50 for a bottle of shampoo or weight loss powder, these girls begin to have trouble making their money back and are often left with an abundance of products.
Even more, they then go on to try to recruit their own friends, as there are "recruitment bonuses" and the companies strongly encourage you to promote the job. The recruitment posts almost always follow the same script: "I used to be a broke college student/stay at home mom/actress but then I joined (company name here) and now I can make up to 5k a month from my phone!"
Sounds great - but no one is guaranteeing you'll make that money. And most of these girls will leave out the fact that they had to put money down, or that they have difficulty selling product, or that their sales tapered off after the first month.
Heads up - this is the classic structure of a pyramid scheme. Here's the basic idea: an individual, or small group, sells products to a lower tier of individuals for them to resell. The upper tier takes part of the profit and gives the lower tier a commission. This tier then goes on to recruit yet another tier, who they can sell to...and on and on.
The point is, the wider the network becomes, the more money goes to the top and the less the people at the bottom are making - which the upper tiers count on. People will recruit new members because they need new members to keep making money.
So if pyramid schemes are relatively simple and identifiable, how or why are people still joining them? In the age of Instagram and social media, everyone wants to be an influencer. It's glamorous, attractive, and seems simple. The truth is, successful influencers put a lot of time, money, and effort into becoming well-known, and they create a brand for themselves before they start to market someone else's company.
These schemes are targeting young adult women specifically, with promoted posts and sponsored ads. Be smart, do your research, and don't work for a pyramid scheme because a girl you don't even know messaged you and told you that "you seem like a perfect fit for this company! It changed my life." Secure that bag - just not through schemes.