LTD is a multi-level marketing scheme, not a pyramid scheme. Pyramid schemes are illegal because they involve fraud. MLMs are legal, although people are foolish to join them.
Pyramid schemes get people to invest with the promise of high returns. The way they guarantee these high returns is by paying off the initial investors with the investments of people following them. Eventually the pile of investors gets too big to be supported by those following. You can’t recruit enough followers, and so the whole thing collapses, and people like Bernia Madoff go to jail.
MLMs are different, and are not fraudulent. They are also similar, in that early joiners make the money, and later joiners don’t have a chance to make anything. In MLMs, you sell something, it doesn’t matter what, but that’s not how you make money. You make money by recruiting your own team of sellers. You make money, because you get a percent of the sales of everyone below you, and of everyone those below you recruit. If you get in early, there’s opportunity for lots of new folks to join below you. However, like pyramid schemes, there is a saturation point beyond which it is extremely difficult to recruit new sales people, and so you can’t make much money.
These organizations seem to have a life cycle. Early adopters make a lot of money, and they get everyone excited, so lots more people participate, and then it grows to the point where new people can’t make money, and then the company dies. The founders then move on to start a new company all over again. So, Amway becomes Quixtar, become LTD.
Your sister needs to find out where in the life cycle this company is. If it’s early, she might make money if she’s good at recruiting new people. She has to be a good sales person. If she’s late, no matter how good a sales person she is, there won’t be enough people to recruit for her to make money. The market will be saturated.
Of course, this is all fairly unethical in my mind. They tend to prey on folks who are down on their luck, ready to try anything to make a buck. They place a vision of great wealth before these folks, who are susceptible to these visions, but of course they don’t say how unlikely it is that anyone will make the big bucks. Only a few people can. Only the earliest folks on board make the big bucks. But people have hope, and this blinds them to the reality of such organizations.
It also sounds like these organization add a religious element. They make it sound like this is a mission, not just a money-making thing. People believe they are helping others with whatever product it is. I have a friend who sells magnets that are supposed to heal you. She holds house parties in which she makes her pitches. She sends out emails advertising the house parties. Fortunately, she is ethical and offers folks an opt-out for her emails. She is a true believer.
If people believe they are not just making money, but they are making the world a better place, they will stick with the organization longer. They will also stick for the camaraderie, which gives them a sense of belonging and mission. God is on their side, and they are Christ’s warriors bringing sacred whatever to the masses. They bring them together in huge conferences to give out rewards (which make big bucks seem possible), and to whip up their enthusiasm. Music, dance, excitement, cheering the product and the mission. It’s a formula. Anyone could do it.
That’s what you’re fighting. If your sister is desperate, it’ll be a hard job, because she wants desperately to believe. The only thing you have on your side is information. You can be sure that for every argument you have, they have one to counter it. Appeal to her logic. Maybe even show her other ways to feel like she belongs. She can do good work if she wants, but this is not the way to do it.
You can’t tell her not to do it if she’s bought into the mission. You’re just an unbeliever. She knows better. Think of it like this. How do people give up religion? Slowly, over time, they come to see that things don’t make sense. If you can help that process along, feeding her information but not pushing her, she may open her eyes sooner rather than later. Or, at least, that’s my guess.
There are also deprogrammers who do this kind of thing. But they kidnap people and keep them in a room and it’s all pretty forceful, and I don’t think it’s the right thing to do. As someone else said above, sometimes you just have to let people make mistakes and learn from them.
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