I’m not defensive nor do I take anything personally. My remark about a witch hunt was in jest. I can truly say I didn’t come here to try and recruit your message board, and I can understand the skepticism. I was too.
If all you got from this is that its a pyramid scheme doomed to blow up, then I did a very bad job of explaining. My apoligies.
Perhaps a forum is a bad place to try and explain this, or maybe I’m just real bad at it.
Good Luck to you.
The founder of the company finds 5 people.
Those 5 people have to find 5 nonmembers each-25 people
Those 25 people have to find 5 nonmembers each-125 people
Those 125 people have to find 5 nonmembers each-625 people
Those 625 people have to find 5 nonmembers each-3125 people
Those 3125 people have to find 5 nonmembers each-15,625 people
Those 15,625 people have to find 5 nonmembers each-78,125 people
Those 78,125 people have to find 5 nonmembers each-390,625 people
Now, assuming at best that you are a fourth tier member, by the time you get to your first “…and so on”, you have 488, 291 people involved, and if you want to go as far as “…and so forth” the total is up to 2,191,416 people…and this is a lowball figure because I doubt very much y’all are going to stop after recruiting only 5 people, human greed being what it is.
actually there is no need to bring in more “directs”. Better off helping other people bring people in. And it is highly possible for one of my directs to actually do better than me.
It shouldn’t be too difficult to explain why it won’t blow up.
I mean to me it looks like a clever scheme to obscure what it actually is.
It works in several ways:
Only #3 is truly part of the unsustainable pyramid. The other two bits are a seemingly benign smokescreen. The fact that someone ‘lower’ than you in the chain can do better doesn’t mean it’s not a pyramid, it means it’s just a slightly different internal structure of the same business model.
I put it to you that the ROI that you’ve described - the 36% - is derived solely from sustained recruitment.
If you’re thinking a 36% ROI is not derived from sustained recruitment, yet you are incapable of explaining how it is achievable, then you’re either a patsy yourself, or you’re part of the problem.
That’s also possible in Amway. That doesn’t mean this isn’t an MLM or pyramid scheme.
ok, as i initially stated…yes you need to bring people into the system. They only need to do what they are already doing. “SHOP”
the $675 is generated by more people in the system shopping, and has nothing to do with how many people you brought in.
Correction: Though the more people in the system the faster you receive the discount
Actually, you are the one that brought up bringing in 5 friends, who would bring in 5 friends, and so on and so forth. How far from the top rung of this ladder would you say you are right now?
LOL, and we’re back to the witch hunt again
I get it…You think its a scam, thats fine. Matter of fact its fine if everyone here does.
Just for argument sake though, if this was a pyramid…then the idea in plain would be that someone needs to buy into it so that those above them can profit. But, not once did I ask anyone to buy anything or make an investment, etc…or did I even say it was necessary
I’m done with this dance.
So what does it cost to join? If you recruited me, how much comes out of my pocket?
But your so good at this tango. lol
See my #3 above. The other parts are fluff. You’re giving one definition of a pyramid scheme and saying yours doesn’t resemble that. However there are many different nuances to such schemes. Please address the query about the rate of return.
He has no idea the nest he stumbled into.
JJim if you are asking how it pays out, it uses a binary accounting matrix. As more units are created in the system by shopping(by you and others) The original unit matures and pays out $675…So I guess you are correct…1 day it will blow up, The day people stop shopping
Only that even if it does blow up(which it won’t) you haven’t lost anything.
If that wasn’t the question, please repost I’ve kinda lost track
What is a binary accounting matrix? I can’t seem to find anything relevant online, which seems very, very odd if it’s as successful as intertile wants us to think.
Out of curiosity I checked out the website. Looking to see if there were any stores where I might use my Lyoness card (if I had one), the search returned:
So no stores in the San Fransisco Bay Area, wow.
IMHO the website is not user friendly from a consumers POV, but maybe I’m just to tired & muddled headed at the moment.
So I’ve had a look at some other forums talking about this, and it seems that the way Lyoness works is via typical MLM presentations where they talk for three hours about the benefits, get people hyped up, show the profits that people at the top have supposedly made.
The enthusiastic presenters obfuscate the main point: “where does the money come from?” by demonstrating the no doubt pretty slick “binary matrix” accounting software and indicating that it’s all too complex for mortal minds to comprehend. Probably they don’t really understand it themselves.
Further, the discounts shown in the participant’s account are referred to “positions” by Lyoness, a word chosen IMO to indicate that it’s all to do with high finance and Wall Street-style trading and not for your pretty little head.
Other things I gleaned (from reading about the experience in Ireland mainly, though also the UK, Croatia and other places in Europe where it’s operating). In Ireland there are a few participating SME retailers, but the major retailers aren’t yet on board, because they’d have to get the requisite scanning equipment and train their staff. (There is a possibility that the scanning equipment is provided gratis by Lyoness.) Smaller retailers have picked up on this, but then they don’t have massive training programs they need to embark on.
When someone in Ireland first opts into this “can’t lose” scenario, they pay €300 to Lyoness and receive a legitimate €300 in vouchers for Tesco, which is the biggest supermarket chain in Ireland and the UK. This activates a new account with Lyoness, and they also get a fancy statement showing that their €300 “investment” has generated €12 which is sitting in their account. Can’t lose. Naturally they recommend it to their friends.
Turns out that a recommendation does require a nominal ‘investment’ off €2 per recruit, to cover the costs of the discount card issued.
My guess here is that Lyoness bought the Tesco vouchers at a small discount, which they’re recouping as profit, and to confer legitimacy by bringing in a big name at the beginning.
So far so good - just looks like a major cooperative. If the thing goes tits-up, the little people will lose only the discounts on paper, which means they haven’t really lost anything financial, because they’ve paid €X for €X amount of goods.
So where are these supposed huge discounts to be made? No retailer on earth would offer a 36% discount, but that money’s got too be coming from somewhere.
Well there are also people who are co-opted into investing up to €2,000 to move themselves up the chain and become more active. Because the presentations are all about the benefits and the high returns are just mentioned in passing, this bit is repeatedly glossed over. It will be the people who are the most enthusiastic who may then be taken for further presentations. By the time they’re completely hooked, they have a financial investment and start behaving as our friend intertile does.
Supposedly the money is automatically transferred into one’s bank account when a trigger amount is reached by the participant’s “positions”, but I also read of someone who had invested rather than just participated, and they were unable to withdraw several thousand in their Lyoness account - so the investor’s cashback situation may be different.
So my revised theory: it does in fact work on pretty slim margins, generated by profit on bulk discounting, and relatively minor investment by people who want a bigger cut. The so-called ‘binary matrix’ juggles those teensy margins around to reward a very small number of the highest and most long-lived recruiters. The model still relies on getting more and more people into the ‘upper’ group, and to do this it has been forced to expand into more and more countries as the original territories approach saturation point.
I suggest that because its pyramid is actually further up the chain than normal, when Lyoness goes under the little people won’t really lose that much - just some discounts that only ever existed for them on paper. It’s the people who’ve been in it for a while, who’ve invested money and time, and have a few thousand sitting in their accounts, who will be screwed.
I also suspect that either through their own initiative, or as a strategy from head office, Lyoness representatives google things like “Lyoness scam” then register on messageboards to put Lyoness’s highly obfuscated point of view, something demonstrated in this thread and at the links below.
Thank you for your hard work and research.
I assure you it was a pleasure. I love trying to work out the real story behind too-good-to-be-true things. (It’s probably why the CEO and finance guys where I used to work looked uncomfortable when I started asking questions like “how on earth can the board expect the company to make a year-on-year revenue gain of 15% in the middle of a recession when our revenue only ever rose 7% during the good times? Could you point me at the specific research they did to arrive at that conveniently round figure?” I don’t work there any more.)
Hi all. I have done a lot of research on this, so I joined to share some of it with you.
1. German audio report, September 9th 2011.
Lyoness being sued by former employee for allegedly operating pyramid-style business.
Direct link to (English language) audio report here
2. Austrian news report, March 13th 2012.
Investors Against Lyoness Successful
Original link here
Translated link here
3. Article from Swiss current affairs magazine L’Hebdo, February 15th 2012.
Lyoness, or Easy Money
Original article in French here
Translation here