Beware of Binary-Type Pyramiding by Josiah Go

Beware of Binary-Type Pyramiding by Josiah Go

Articles
With inflation in the Philippines running over 6%, many people would be looking for extra income to augment the rise in consumer prices and maintain or improve their lifestyles. Considering some 88% of Filipinos are classified in the income range of DE (lower income), most will resort to selling products using credit lines extended to them or low capital businesses, such as multilevel marketing (MLM), a legitimate and innovative type of direct selling where one is compensated not just for personal sales but also from the sales of direct recruits as well as indirect recruits (those recruited by direct recruits) after meeting the qualifying sales volume of their company. One “pseudo-type” MLM uses the binary scheme, claiming to be MLM but may be illegal in reality. What is Binary? Binary…
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MLM and Inclusive Growth by Josiah Go

MLM and Inclusive Growth by Josiah Go

Articles
Many people aspire to have personal freedom and financial independence or want to be an entrepreneur but do not have huge capital. The route is typically via trading (buy and sell), opening a small neighborhood store or eatery, getting a franchise kiosk, or becoming a multi-level marketing (MLM) distributor. MLM, also known as network marketing, is a modern direct sales compensation plan where distributors are paid on their personal sales and sales of their recruits, thereby improving their income source from the effort of others as well, liberalizing what used to be available only to employed sales managers and sales supervisors. MLM is not the same as pyramiding, an illegal business method, where compensation is derived from either simple recruitment (without sales) or complex recruitment (balancing a pair of recruits,…
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Q&A with Nu Skin President of Asia-Pacific Melisa Quijano on Direct Selling

Q&A with Nu Skin President of Asia-Pacific Melisa Quijano on Direct Selling

Distribution, interviews, Q&A
Q1: Prior to your promotion as the Asia Pacific President of Nu Skin, you were their regional marketing director for Southeast Asia, general manager for Thailand and Malaysia, and vice president for global market services based in Nu Skin's headquarters in Utah, USA. What achievements are you most proud of? A: Over the course of the 18 years I have been with the company, Nu Skin has consistently given me a platform to do what I love, and it’s been quite a journey filled with exciting challenges and numerous accomplishments. More than any number though, our company places high value in measuring success by the number of lives that we are able to transform through this business. One instance this number rose significantly would be Nu Skin Southeast Asia going…
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Q&A with Direct Selling Association of the Philippines (DSAP) Officers  on Understanding Pyramiding Scams

Q&A with Direct Selling Association of the Philippines (DSAP) Officers on Understanding Pyramiding Scams

interviews, Q&A
Q1 Question to Max VP for Asia Joey Sarmiento: Using layman's terms, what is pyramiding and what's the main difference between legitimate multilevel marketing (MLM) and pyramiding? Answer: Network marketing or MLM is a legitimate mode of business wherein products are sold via person to person selling instead of the traditional way of selling from a fixed retail location; the objective is to sell products to the end consumers. The difference between MLM and direct selling is in the commission system wherein participants in MLM generally benefit from the sales made by people under their line of sponsorship even if they are several levels deep (e.g. an independent distributor in an MLM earns commissions not only on his/her personal product sales, and not only on the sales of a person personally recruited by him/her, but also on…
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The curse of MLM by Josiah Go

The curse of MLM by Josiah Go

Articles
MLM is an acronym for Multi-Level Marketing, also known as network marketing. It is a form of direct selling but with the compensation plan as its core innovation; rewarding sales from people directly and indirectly recruited. The MLM compensation plan is designed in a way that network members will recruit their own downlines, which used to be the never ending job of personnel department. Mere recruitment alone gives no compensation. The grand old daddy of the MLM compensation plan is known as the stairstep-breakaway. It was adopted and proven legitimate by Amway in the USA in 1979 when it was questioned by the Fair Trade Commission (Click http://www.antipyramiding.8m.com/article3.htm for the decision). Another one of the 5 types of MLM compensation plan is the binary plan. In a binary plan, only…
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Pyramiding & Unregistered Investment by Josiah Go

Pyramiding & Unregistered Investment by Josiah Go

Articles
My article, “Identifying Pyramiding Scams”, has become the most popular entry in my blog www.josiahgo.com to-date.  As network marketing or multi-level marketing (MLM) becomes more popular, so are the numbers of unscrupulous companies calling themselves ‘MLM’ increasing, when they are actually scams. Some readers may be curious about binary plans that balance the number of recruits on your right and left sides, a scam that is masking as a legitimate MLM. To become legal, a binary plan must balance sales volume instead of the number of recruits. Others are interested to know about the 7-headers investment wherein a recruit is convinced to pay for seven business centers as they sign up with a company, an unregistered investment being peddled as a non-investment. Koscot Interplanetary was sued by the U.S. Fair Trade Commission…
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Identifying Pyramiding Scams by Josiah Go

Articles
Among the multilevel marketing (MLM) or network marketing compensation plans being used (and abused) nowadays is the binary plan. This kind of plan allows distributors to have only two direct or first-level distributors. Any additional distributors sponsored have a "spillover" effect, meaning, they are placed at levels below the sponsoring distributors' first-level. Compensation is paid based on balancing volume on the right and left leg. There is no law that states that a binary compensation plan is illegal or is a pyramiding scheme, however, binary plans, being one of the five more popular types of network or multilevel marketing compensation plans, operate under the same laws that govern other multilevel marketing schemes, specifically the provision that disallow the practice of pyramiding schemes. Article 53 of R.A. 7394 of the Consumer Code of the Philippines states "Chain distribution plans or pyramid…
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