Dodgy pyrimid scheme, Network 21

Last night myself and another friend were invited to what we were told was a "Business Seminar" after being at the meeting for about 10mins I relised it was just a hard sell for a multi level marketing scheme called network 21.

the vibe I got was that this system is kind of like a pyrimid scheme, selling products from "Amway" over the internet But it seems the participents are more focused on signing up other people to join than they are in selling the actual products.

as the seminar rolled on they brought out people who were supposed millionaire from the system talking about holidays and how they never have to work again, but it all just seemed to dodgy for me,.. my other mate seemed to take the bait and is thinking of signing up, I want to find out more infomation to try and give him the facts and perhaps stop him from making a mistake, they have arrranged another meting for him to go to and I am putting together a list of questions that I intend to ask to try and get some straight answers from these people.

I was just wondering if any one has any experiances with this group, and what their thoughts are.

The way this Network 21 system seems to work is that you are contacted by a friend ( this friend has normally just joined the program themselves) and they invite you along to a "business seminar" (lol),... as the "seminar" kicks off a guy starts talking about how hard it is to save money and how the old system of saving and investing is just to slow,...

Once they have everyone feeling bad enough about working 9-5 and convinced saving and investing just doesn't work, they talk about how they had a system that can have you generating enough cashflow in just a few months to replace your present income.

The system works that you join up and start purchasing these products (vitamins, cosmedics, cleaning products etc.etc) and the person that joined you up ( end everyone else above them) recieve a percentage of all the sales back each month,.... they then tell you to go out and sign up other people so then you also get a certain % commission from all the sales that go below you,.... they keep telling stories how when you have 100's of people below you in the "pipeline" ( Or pyrimid as you would probally call it) you will recieve enough cash each month to stop working and be a millionaire like the people paraded on stage.

the whole time they are quoting from robert kyosakis books, and even using symbals from his book like the cashflow quodrant.

What I am worried about is that the largest portion of money the travels up the chain may be coming from the joining fees which is a bit over $1000 I think,... So the people on stage may be millionaires, but that may only be because so many people have joined below them.

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Trust me with your moneyand your life,.... But not your beer or your wife.

Check out this link, It's the actual slide show from the seminar, you'll see the opening screen actually use robert kyosakis cash flow quadrant.

http://www.cubinlab.ee.unimelb.edu.au/~pychan/pdf/businesspdf.pdf

let me know what you think,

I can't see how a system that relies on you signing up another 500+ people below you can work,.... especially when you are signing them up promising riches that will only come if they then each sign up another 500 on the same promise.

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Trust me with your moneyand your life,.... But not your beer or your wife.

How many levels below you will you receive a commission from their sales from?

" they keep telling stories how when you have 100's of people below you in the "pipeline", you will receive enough cash each month to stop working and be a millionaire like the people paraded on stage."

Lets just say for arguments sake this is true. What happens when the people below you stop working because they are receiving enough money from the people below them. No sales = no commission?

*      -    YOU
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* * * *    - What commission %?
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* * * * * * *   -  "                          "
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* * * * * * * *  -  "                      "
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*
*
*
*
etc.

Matt
Gold Coast
Aussie Mortgage Advisor
matthew.parry@aussie.com.au
0430 123 003

well what they say is that you recieve comissions no matter how many people there are below you,  as you go further up the chain the commissions become less of a % of each sale but because you have 1000's of people below you, you will be drawing commisions from an ever increasing amount of sales.

so the founders will still be recieving commision, even though the original people that first started may only reicieve 0.0001% of sales from the new people because they have almost a 1,000,000 people world wide that is still alot of money,.... It's just not sustainable though. as with any pyrimid scheme it's only the first people in that will get the main benifit.

**********************************************************
Trust me with your moneyand your life,.... But not your beer or your wife.

I wish your friend all the best with this but I wouldn't be touching it with a 6 foot pole.

Maybe years ago when pyramids schemes were new and nobody knew much about them you could possibly make something, but these days everyone is far to sceptical to even think about joining.

I'm sure there are a million better things your friend could do with that $1000.

Matt
Gold Coast
Aussie Mortgage Advisor
matthew.parry@aussie.com.au
0430 123 003

Hi Tyson,
I remember going to one of these meetings a few years back and the point back then was that you were buying products that you used everyday anyway (toothpaste as an example) so you buy through them. Then i remember getting invited to jewellry parties blah blah blah...but always thought No WAY!

If it works for some people that actually use the products then good for them.
Otherwise it forces to you buy a lot of those products. It's a good business model for the person at the top of the pyramid.

But NUP!!!

Hi Tysonboss1,

Amway is a real company, so you probably don't need the quotes.....ha ha

This business supplies products, the opportunity for people is to form organisations to consume/sell the products and make money from a percentage of the sales price.

There are two main arms of the Amway networking marketing business in Australia - Network 21 and IDA. Network 21 is the smaller and (so I have been told) more agressive.

In principal the business model works. It definitely has worked for quite a few people. Every month there are people recognised as having reached milestones in the business magazine.

So now a couple of big BUTS.....

But look at numbers retained. See if you can find out how many Amway distributors there were say 10 years ago in Australia, as compared to today - I would imagine a very small number - maybe even negative. And if you are trying to build an oganisation that loses as many people as you get in, it is a failing proposition.

Also, try to determine what the real income is Directs and above are earning. I personally know of two couples who had reached the Emerald level, retired, then later on quit the business - I suspect because the income was not really there - because so many people leave their organisations that need to be replaced.

Amway has a very bad name with many people, especially with people over 40 who have come in contact with it by now. I think it is a bit unfortunate. Many of their products are excellent (some would argue about value for money). The system could and would work if the self-defeating Amway tag did not blow so many people out, or stop them even looking in the first place. But anyway, I think the damage is done.

And the bad name of so many network marketing ventures of the past couple of decades must make it very difficult for any to now make good inroads into Australia......

I remember in the 90's the folks in Amway that really were doing well where the ones who were breaking into the new markets for Amway - asian and eastern european countries were going off! Plenty of millionaires came out of new market openings......

Craig.

Undoubtably there are are alot of people who have made a little money and probably a few who have made a lot of money, but as mentioned above, there are far more that didnt make any or even lost money due to the product and promotional (motivational) purchases. You mention you were invited to a "business meeting", why, because if you were told "come to an Amway (N21) meeting" would you go? Probably not as there is such a negative sentiment about it, which puts you on the backfoot to start with. When young and naive, yes I went along and signed up. Was talked into buying all the positive tapes etc. Fortunately didnt put to much $$ in as I was a uni student and the day I was told I should be at the "meeting" rather than studing for finals, I quit. Look closly at the motivational costs and where does that $$ go. Methinks the ones who push the peripheral stock make more $$ than those that try and sell the product if you follow.
Follow your gut,
Mick

Mick

"The cost of knowledge is cheaper than the cost of ignorance"

I understand that Amway is a real company selling real products, But I just can't help but feel the network 21 system is being supported by the join up fees,...

at the end of the day if this model was successful, and everybody that joined it were successful the market would reach saturation point within a year,

If you started with 1 person who then signed up 5 others who then continued to sign up 5 more at each level for the next 12 levels you would end up with over 48,000,000 members, so for the system to have been around for this long it must be unsuccesful and must bleed members, which then backs up my theory that it's the new membership fees that support this system.

**********************************************************
Trust me with your moneyand your life,.... But not your beer or your wife.

I think that the basic concept of Amway is good, but I also believe that the break down in the chains is that, from my observations , People pay the joining fee with the expectation of getting rich quick with no work output and as soon as it doesn't happen and the cheques don't come in, they quit.   Not unlike many people who get into property investing and sell at the first sign of a little hard work (that is hanging on in downtimes).   There is an extremly high percentage of people who buy an Investment property and sell in under three years (not counting the speculators)

www.BrisbaneUnits.com

The problem I have with it there focus is only signing up as many people as possible, any system that puts the focus on joining fees is destined for failure, they don't care who they sign up they just want numbers.

If you look at any successful franchise system, weather it be Mc donalds all the way down to jims mowing, none of them rely on joining fees and none of them make it easy to join, and the ones that do make it easy always fail within 10years.

Also the fact that that those at the top of the system will always to better than those at the bottom means that it's a poor system.

**********************************************************
Trust me with your moneyand your life,.... But not your beer or your wife.

Hi Tysonboss1,

Joining fee is not significant $100? around that - it goes to Amway - for that you get quite a bit of product for self-use (samples you might call them) plus a catalog, paperwork, some admin - not a big profit for anyone. And none of the joining fee goes to the networkers.

There is money made when people buy/sell product. There is also money made by the people at the VERY top of the networks when you buy marketing aids (tapes/books/seminar tickets/etc).

That's it.

The reason they focus on getting numbers in is because you don't really know who is going to do what (you can't rely on the ones that appear the keenest) so you just aim for as much momentum of numbers as quickly as possible. Then if you come in with reservations (as most do) but you quickly find a small qroup of people in your network you are less inclined to quit. Momentum builds mommentum....

That's how it is supposed to work. Personal experience is putting in many people who did absolutely nothing. Therefore gaining little momentum.

Craig.

This is most definately a pyramid scheme. Overall pyramid schemes only really work for those in the top few levels and it is very hard for someone lower down to make really decent money out of it. (And if you aren't one of the people presenting or helping setup the presentations you are lower down.)

The thing I have noticed is that you said they want to charge you $1000. The 'good' (used loosely) pyramid schemes that actually have semi-decent products for you to sell do not even charge joining fees as they realise the more people selling the better for them at the top. So the fact that they are charging you means they aren't even doing that great at the top as the products themselves are probably difficult to sell.

the soap pyramid scheme is one of the oldest. It relies on the entry fees , not on the sales. You pay them money, they get rich. You don't sell anything because products are 20$ instead of 5$. You try and sell to family, they buy 1-2 , you start to ripoff other family until everyone hates you. You lost 1000$ and your family.

Don't touch it.

Guys, I am new to this forum but I am not new to Network 21. Here are my thoughts on this Network system:

- first of all, there is NO sign-up fee for Network 21
  Network 21 is an educational & motivational company that works with Amway in around 40 countries around the world. Amway  provides the products, the infrastructure, the compensation plan etc, but Network 21 educates & trains people on how to build the business using Amway's product lines. You need a minimum of $173 for signing up a membership with Amway, which will include sample products, their delivery, starter kit, and membership/virtual office on Amway. This will automatically allow you to have virtual office in Network 21. In other words, Network 21 membership costs you nothing once you are a member of Amway.
* some said $1000 signing up fee - I don't know where this is coming from.

- second of all, NO ONE gets a commission from the sign-up fee
  I am quite confused when people say that when you sign people up, you get commissions. This is not the case with Amway, but is indeed the case with other network marketing companies such as ACN and MonaVie. Personally, I don't agree with this form of compensation plan, because that way would encourage people to sign up as many members as possible. This might be the case with some distributors associated with Network 21 and Amway, but not me. That's why I feel comfortable introducing the concepts of online shopping and products to people I know, without the intention of scamming people so I get commissions from their sign-up fee.
* A word of advice, if someone approaches you and wants to join you into something - the first and foremost thing you should be asking him/her is: how much commission do you get by signing me up? Guess whose pocket that commission comes from.

- third of all, there are things I like and I don't like in Network 21.
  Please stay away from any distributor that promises you things, e.g. become rich in XXX period of time. That's not realistic, and misleading. It is virtually a misconduct and abuse of the system to attract people by giving promises like that. However, here is what I do: YES I personally sign up people who are interested in the business model and want to try, but the first thing I say to them is "Look, I can't promise you anything", and then I find out what exactly they are at and what they want, so I can point a direction and work with them, rather than giving them false promises; the second thing I do - if at the end of 90 days, they are not happy, I personally arrange their full refund so they can quit Amway - given that they know (and I know) what exactly they (and I) have done in 90 days, what worked and what didn't work.

* A word from my heart - Network 21 is by far NOT the only thing I do and I am interested in. What I found from people that I joined (including those whom I arranged to quit) is that they are genuinely NOT procrastinators. They want to do something with their lives and do not want to be ordinary. Network 21/Amway is a stage for some to make money, and for others to develop themselves as people. For those non-procrastinators, I'd love to share ideas about business and investment in general. Hence, I do not have any problem about "losing friends" - because they understand that Network 21 is just one of the things I am into and I want them to know about. I also have a big interest in different forms of property investment.

If anyone has a question or complaint about what I said above, feel free to give a shout or email me at ientrep@gmail.com.

Thank you,

Michael

Hi ientrep and other forum members

Glad to see some facts regarding Network 21 and the Amway business. I joined 12 months ago. Being shy its been a struggle but i am slowly going forward.The biggest benefit to me is the personal growth and newfound positive outlook on my day job,marriage and life generally.This has more than paid for the startup fee. Plus the starter products worked well and tasted great.
For the skeptics out there dont bag it unless you fully understand the concept. We dont carry on about commissions on loans /insurance/ share trades/ super funds/ most investments/ car sales/ ETC.
So go along to a Business preview have a look, there is no pressure if its not for you so be it .You may meet some forward thinking nice people.
BUT DON'T HOLD SOMEONE ELSE BACK.

Ps Amway has a 90 day money back guarantee. Thats not dodgy!

Have a nice day

James

hmmm... welcome to the forum... 2 newbies with positively glowing posts on Network 21 and nothing to contribute about PROPERTY INVESTING.

Spam, much?

Have a look who started talking about Network-21 in this forum.

Was it us?

We only came here to clarify a few things, as requested by some of the people before us, and hopefully it helps.

We contribute to the forum, it doesn't necessarily have to be about property. Plus, I did say that Network-21 is one of the things I do, and I am also into properties and investment. That's why I am here too.

.....

"hmmm... welcome to the forum... 2 newbies with positively glowing posts on Network 21 and nothing to contribute about PROPERTY INVESTING.

Spam, much?"

==> So what have you contributed in your particular post, ...if anything?

It sounds like a pyramid scheme, pure and simple, but good luck with that 'personal growth', FarmBoss.  You could develop some personal growth by volunteering at a nursing home, or helping old ladies cross the street, rather than flogging overpriced merchandise to your mates.

Thanks for the 'clarifications', but I think I'll steer clear anyway.

I have 2 friends who slaved away with an open mind about it, and they both threw in the towel after a couple of years.

Pros
However I did attend some seminars and I did feel I learnt alot by watching what they do, instead of listening to what they tell us to do. They are shining examples about how to do sales, work ethic and keeping a team positively motivated. All very useful skills!!

Cons
As far as signing on to their actual program, you would have to burn allot of your friends away before you get any decent cash-flow in. The Amway success stories claim they have not lost many friends, but you should hear what people say about them behind their backs......

To me Shares, starting up your own business idea or Property seem like easier methods for achieving the Financial Freedom dream. If you look up Australia's richest 200 you will find they did it through these methods (and a few others like entertainment), but I have never read about any of them becoming successful because of network marketing. Thats my 2 cents

Anyway Good Luck

A few good points from some and a lot of bias from others.
Let me add my 2 cents.

First, I worked a network marketing company (no NOT N.21) and made real money. I not longer do, found an easier way to make money.

To your comments. Network 21 is an organisation founded by Amway distributors who branched off with a new name in order to make recruiting easier. The word Amway tends to be for people like Aerogard for mozzies.

Network marketing or MLM like the American call it are companies that sell their products to their own members in stead of  through a shop. They are no different from a wine club, tapperware or Avon. Direct selling from the company to the consumer where the consumer receives a commission from his own products and what ever else he sells to his own customers called "down line".
What tends to get MLM companies caught in this cloud of suspicion of being a "pyramid scheme" is their complicated commissions system, and they are complicated. I use to give seminars about the different systems and their advantages and disadvantages.  Also the fact that on your whiteboard you tend to draw a sort of pyramid. Very suspicious!

Actualy Network 21 learend not to do so and draw the pyramid on a side. Clever!

Another aspect of MLM companies that makes them unpalatable to a business minded person is their recruiting methods. Most of them are stuck in methods that worked in the fifties yet today are a joke. Only someone with zero business experience would even consider getting into business with them.

And so they actually target those with zero experience, with a spiel that would make Jimmy Baker proud, they will tell you a series of lies in order to get you to sing up seriously thinking that they are doing you a favour and that you have all the chances of becoming a millionaire.

Now for the positive.
If you can actually go past the moronic presentations by this self appointed pretend expert, and if you realise in time that the first big fat lie "this is not selling" is in fact a lie and that you are there to sell products or services whatever the company does, you may be able to make some money if you apply yourself as you would to a serious business, with a budget for advertising and factoring in a substantial risk.

There is money to be made with MLM, it is well suited to the one with selling talents and enthusiasm with lots of connections.   It is a waste of time for 99% of those recruited en mass by the likes you have seen who tell you -"if you don't have experience better", -"this is not selling", or that -"you have to ask for favours to your family to join". Your chances of success with such concepts is the same chance you would have to succeed in any other business applying the same ridiculous assumptions.
There is a very good book by a Canadian author Ann Siege, "The renegade network marketer". Worth reading if you consider getting into this line of business.

Ah!
And please don't go repeating the "pyramid scheme" line. Pyramid schemes or Ponzi or chain letters or any other scam of the sort that relies on passing on to other ten people a mathematical concept in order to obtain profit from nothing at all are illegal and have nothing at all to do with MLM. If network marketing companies are a pyramid scheme then so must be Telstra and BHP.

To conclude, from someone who made a living for many years from MLM, the reason 90% of people fail to make any money at all in MLM, 5% make some money but lose more, 3% make modest sums and 2% make good money, is one and one only:
 The recruiting method stinks and targets the wrong people. This enourmous mass of disgrunted poeple who have been promised success by default and who should have never been pushed into it in the first place, go away bitter and with good reason and then discredit the industry and rightly so, and then post millions of negative post on the internet and some dedicate years to maintain hate-MLM websites with similar religious fanaticism to those who promote MLM as the panacea.

MLM is just one more form of selling products or services, and needs a lot of time and dediction and real talent and love for selling and teamwork just like proeperty investing, or running a restaurant.

But this of course is only my personal opinion not to be taken too seriously.

PS

To the author of this discussion:  the choice of words in the title could in theory attract a defamation case. I would change it or delete commercial names.
Just a suggestion.

"Those who dream by day are cognizant of many things which escape those who dream only by night.
Edgar Allan Poe, "Eleonora"
." . . . . .
.
Marc