A legal way of robbing.
Last week I attended a presentation about a business. Most of you have come across it, Referral marketing they call it. Let me give a small overview about that business.
Generally in referral marketing, your investment will be a certain amount that u pay to the company to become an agent. You generate money in that business in two ways. First, by selling their products at a higher margin than what u actually bought it from the company. Second, by referring other persons to market their products, and in turn getting a commission for it. Even when the referred person refers someone else, you will get a share out of it(but the amount will vary, like when you are referring some person you are getting Rs X, if that person refers some person you will get X/2). We call this kind of marketing as MULTILEVEL MARKETING(MLM).The thing i came across is a little bit different and seems to make it more popular than MLM.
Before saying about the differences I will say a little bit about that multinational company. It belongs to a network of a few companies, where each one deals with either technical products or automobiles or tour packages etc. The company of our concern is dealing with numismatic coins. They manufacture gold coins imprinted with great people or events and sell it. To make that coin as a rare piece they destroy the mould. so that they cannot make the coin like that afterwards, good way to make things rare and increase the demand na, the products which we can buy is this only, others are too expensive.
Now we will see the differences. In MLM you have to buy their products every year, where as here if you buy once it is enough. The other strategy is they are following a binary tree like structure where you can refer only two people, and you will get money only if those two people refer another two. So if you have three sales on your left side and three on your right you will get money. The person above you will help you because only if you refer a person he will get money.
Clear about the business? ok now we will deal in numbers. The product range starts from Rs 33,000(includes agency fee and product price), and it is a gold coin i suppose, and on every six referrals ( you have to get three on your left and three on your right, you will not get any money for a 4 2 or 5 1 combination) you will get 11,500.
Let us make ourselves clear with the money flow. From where are we getting that eleven thousand or 2000(approx) per referral? Is the company going to pay you from their hand? Absolutely not. Its the money of the person you refer, am i right? Let us assume the best probabilistic event, a perfect binary tree. The hierarchy goes like this 1, 2,4,8,16,32,... How long will it continue, may be up to one crore people. Let us consider it is saturating at that level. How many will be in the last level of that binary tree?? Half right?? i will justify my statement with this example. Consider this tree 1,2,4,8,16. Total no of people is 31. And the no of people in the last level is 16 which is half the total number of people(31). So at any point, seventy five percent of people will be leaves, i mean they will be in last levels.
For one crore people, the number will be 50 Lakh in the last level and 25 lakh in the penultimate level. From where will these 75 lakh people get the money? So the people above them are getting money eventually by robbing others money who are at the last two levels.
Let us take for each person that company is gaining some 1000 rs and also huge share from last two levels will go to the company. You are robbing your own peoples money and giving it to some person outside the nation right? If it is going up to one crore people, minimum of a 10,000 crores will be going outside the country( 1cr*33,000*0.75 ~ 20,000cr. Out of this half,we could consider, would be shared by the 25lakh people above the last two levels.) With that money we can construct a new IIT which will turn the life of few thousands of people every year and it will generate a large knowledge base to the country.
I really feel very bad about this, because most of the persons who are involved in this business are from top engineering colleges. In the presentation that I attended, a guy was very proud that he earned lot of money and got a car. I don’t know whether he is aware that he is robbing others money or not. Is this the way to use our potential, think?. don’t rob your own peoples money. Keep a share with you and give a share to that company which taught you the strategies how to rob. Think, use your potential in right way.
3 comments:
A very good explanation. I too have been bugged by those MLM company representatives(Amway, Conibio , etc) many times. The best thing to tell them is that you are not interested in business.
A LEGAL WAY OF FINDING GOOD HOPES
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Guys, this mail is a direct response to the mail which I found a couple of days before in my inbox. I can tell you that whatever has been said in that mail is just half truth wrongly told. I will explain in detail how it goes wrong fine.
See, suppose we find a friend sometime and your friend asks you where he can buy a good shirt , you suggest or refer pantaloons . He goes and gets the shirt. That way, you just refer pantaloons and pantaloons makes a business out of it. Pantaloons doesn’t pay you in any way, whereas pantaloons promotes it through traditional marketing through wholesalers and retailers , advertisers, paying huge sums of money to salmans and shah rukhs. Do you think, the shirt which you buy is worth that rate. Imagine the manufacturing cost of a shirt. How much do you people think it will be around. You get a van heusen shirt it will be around thousand rupees, whereas the manufacturing cost stands ten times lesser than that. Now, all your money goes to the intermediates. Is that not some kind a legal robbing. The same cost which is getting shared by some other people(say wholesalers and retailers) is getting shared within the network. This is the basic concept and where do you find it different from traditional way of marketing here and where does robbing come into picture here.
First, by selling their products at a higher margin than what u actually bought it from the company. Second, by referring other persons to market their products, and in turn getting a commission for it.
This is a line from the document sent to me. Come on guys , are you selling the product???. You are just making a franchise. You are not a part of the company in their payroll . you are just a customer to the company who has brought their product. A seller is one who sells his product, that concept itself is wrongly understood by the person who sent this. How do you think you sell the product at a higher price?? . its gold and you are moulding raw gold to embed a face on it. Imagine the cost involved to make and the shipping charges for a 24 carat , 999.99 purity gold. There is making cost, cost of raw gold, shipping,minting,royalty to trust etc and there is a silver coin weighing 2 ounces as a compliment to this gold . I calculated and found that the company after all this , gets a profit of 1000 rs max per product. But that also it cannot take outside India. The foreign trade policy of India registered in 1997 comments that only 8% of the total gross profit made by any company who is head quartered outside India is taken out. Rest of the 92% they have to invest in India. So now tell me where all this investment goes???? Think guys!!!!.. its mostly getting invested again in India right. So, where are we losing here!!!
We call this kind of marketing as MULTILEVEL MARKETING(MLM).The thing i came across is a little bit different and seems to make it more popular than MLM.
This is another line in the document which says that this marketing is a form of multilevel marketing. In multilevel you get money based on your level in the hierarchy. But here , its not the case. In the above lines the guy is referring to something different from MLM . don’t you think there itself its clear that its not MLM where people lose and run away.
Last week I attended a presentation about a business. Most of you have come across it, Referral marketing they call it. Let me give a small overview about that business.
from these above lines from the document itself we understand that its called referral marketing and not multilevel. Also according to the document , it is said that we market their products. We don’t have to market their products, tell me do we have a point?? No, right!! No one can deny that the product is not valuable, it is valuable and people who have not seen it never should say something bad about it right!.
. They manufacture gold coins imprinted with great people or events and sell it. To make that coin as a rare piece they destroy the mould. so that they cannot make the coin like that afterwards, good way to make things rare and increase the demand na, the products which we can buy is this only, others are too expensive.
this is also a totally wrong understanding by the person who sent this. Hey, tell me if you have to imprint the faces of great people on the coin do you think you can do it just like that??? For eg:: to embed the face of pope john paul 2 do you think it would have been easy. No way!! The company after crossing 26 screening committees met the pope and got the approval. Come on yaar! Why is such a spiritual pope giving permission to mint his face on a company which is a fraud!!. Here itself the previous spam mail sent about the company has become just nothing!i have also attached the photo when the company met pope.
Also no one is creating demand over a period of time. How can a demand be created. Also the mould is destroyed because the trust(eg pope or shivaji ganesan trust) gives permission for limited mintage, this holds because the company has to pay royalty for the trust and it’s the decision of the trust and the mint to decide the no of pieces.This is just a limited edition product and no one has to create a demand for these. So, the next point of blame that the company is creating a demand is also ruled out.
Now, MAYER MINT is the second best mint in the world with a great legacy behind it to make gold and jewellery for the prince and princess of Europe and they have a royal heritage of 135 years in this business of minting gold. Gold Quest has bought and holds 51 % stake in mayer mint and they almost the owners and the other partner MR.MAYER is also a board of directors for this company. Now how does a cheating organisation can hold equal stake in a company which has a long legacy and imagine the amount of scrutiny involved to check the background and how much background the company might have!!. All the gold products are made in this mint and that’s why the value increases. You can even get a gold from lakshmi jewellery, but the coin from the worlds second best mint definitely carries its own value and will have ist own numismatic value as well . hence the buyers of the coins become the sellers eventually when a bidding happens for the coin. There also the person who gets the coin wins by selling it for its numismatic value. So where does the person lose here.!!!
The company which was criticised in the previous mail also has tie-ups with FIFA and OLYMPIC committee.
Gold Quest was the sponsor of brazil team in their friendly matches before FIFA 2006. this cannot happen without any proper back ground .
Speaking legally, ts true that the company was sued once. But no one knows what the truth was!!. The company was starting its operations in India in 2003 legally, when they were threatened for a 50 % stake by a politician(name not disclosed). The company refused to give since, the customers will all lose if this happens. Hence the politician filed a false petition and remanded pushpam naidu, the head of operations in India.
At this juncture Mr.P.chidambaram , the finance minister of India came into picture and resolved the issue and the politician was sued after that. Soon after that, within three months of time, Nalini Chidambaram ( a big lawyer), the wife of P.chidambaram took over as the legal advisor of the company. The news which was given in the papers is just a spam and the person who sent the mail previously doesn’t want to give te brighter side of anything it seems. May be he doesn’t know as well. But this is the truth. After 2003 the company became legalised by getting ISO certification which I have attached with this document. Getting an ISO also is a form to show that they are properly authorised and legal right ! and more, they provide FORM 16 a which is a legal form to file your tax returns which may occur due to the profit we get by reference.
There are even more than umpteen facts to prove that , this is not to cheat people. People talking without analysing anything else but the darker part of anything confuse people and lead them somewhere wrong. I am telling this in general and only those who speak ill about something they don’t know deeply about is the saddest thing. Only those people who try to spoil the dignity of such a prestigious company with shallow research over the company which has registration even in BVI(british virgin islands , uk,malta) are the ones to be arrested and detained and this is really condemnable.
you will not get any money for a 4 2 or 5 1 combination) you will get 11,500.
I think the person dint attend the presentation properly it seems. Its true that the person gets 11500 for 6 people. But it should be 3 on his left and 3 on his right. But if people fail to make it say like 4 2. its not going a waste. He will not be paid that week , but the next week , if he makes even 0 1. he gets 4 3 and he gets 11500 and the remaining 0 1 is carry forwarded to the next week. So where does the person lose here. Its really bad that you understood something wrongly and present it also wrongly. Obviously the fresh people are getting carry forwarded and no one is becoming a waste here. Your money say 2000 for one referral stays forever whatever happens. So where is loss here!!
The business has been projected in a wrong way to everyone by the previous mail, I will take it as my responsibility to explain the right one.
Now, let me move to the part about the saturation level which the mail talked about.
His assumption that 1 crore in the network is just a projection and it is a virtual number. See, say 40000 people join the business every year at the max. how many professionals are getting released in the stream , a minimum of 5 lakhs!!. Now tell me where is this comparison. Also, around 8 times the no of people are getting released every year which balances the tree. That’s the concept of nature right , that’s the concept of this tree as well. Also, 1 crore is a very small figure, this business is present in over 212 countries and imagine the workforce involved and the no of people freshly involved every year. Only people who just see it from outside tell things that are far beyond false. The person who sent the previous mail has not seen the inside of this business and he does not know anything about the inside of this business. Also a perfectly balanced tree never happens , that’s the best case . you cant confuse best case with an average case for that matter. Trying to confuse people by using techniques which are considered to be lame never works.!!!
The company is also investing around 200 crores in Chennai alone. Imagine the investment in the rest of India.
Robbing is a really bitter word to be used by the person and no one is robbing or no one s getting robbed here.
Imagine, yaar! You make the people close to you only join , will you think he should lose, definitely not right!!
People who joined , before joining they would have definitely thought and would know twice more than what you can imagine. So people are not fools to join this business . if a lakh people have joined , they are not fools to invest in the business and the person who sent the mail should mind his tongue when talking about people in this aspect. You invest in mutual funds and stock , that’s also gambling right and many people have become poor right . how many people have lost their investments in those, but still people invest right!. Here in this! There Is only a history of win-win for everyone and no one has a history of losing and wont lose for sure.
Please , before enquiring the merits and demerits don’t talk about something and you may not know who will get affected.
I hope I have given enough explanations and if you have any more queries please do mail back in case.
hey don think this MLM is ther in INDIA alsone .. Even here in US!!
I have been bugged by few indian guys here ... if u causght u could loss 200-300 dollars ..
SO guys be aware
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