Multi-Level Marketing and Ebiz.
My Experience With the scammers at Ebiz and MLMs
Disclaimer 1: This is a completely not for profit, personal opinion-based article with multiple Citations from the mentioned resources
Precap
This was my Last night convo:
(1:30am. Message received on WhatsApp. A not-so close friend on the other side.)
Friend: hey man, why you still awake so late?
M: hey man, just watching the latest movie xD, you tell. (though technically I was also studying, but what the hell, He’s an awesome guy, let’s be cool)
F: yeh just came from the xyz place, it was awesome! (a big, expensive journey)
Me: nice. Family trip? (who doesn’t like a small chit chat in middle of exam-prep ? he he.)
F: nah, it was a business trip.
Me: Oh nice. anyways got to go, good night.
F: Hey, you got some ambitions?
Me: Umm, Yeah. Why? (huh?)
F: what are your dreams and how serious you are about it?
Me: (what the hell, what’s the matter with him, why is he going so personal? )
Friend: what happened? So long to think about dreams? Are you serious about it or not?
And then it hit me, this is again that ‘Live your dreams, be your own boss’ scam. Fortunately, I was able to detect where is this going because that’s the second time I got picked for it. At first, I just ignored this, like yeah people are stupid, and they think others are stupid too. Let him go try his luck with others and learn from his own mistakes. But it seems that this crap doesn't have an end for it and those scammers seam to target more and more people every day. So, I researched and with this article, I hope to pursue anyone reading NOT to FALL IN THIS SCAM.
The Friend tho:
Taken from http://qr.ae/TUTRlb .
Recently, we all had a friend/family member/neighbour/postman…etc who -
1. Have suddenly started up their dream business, but it’s a secret.
2. Don’t even tell you the name of their business but they keep telling you I am into a business.
3. Have their Facebook full of motivational quotes.
4. Claim that they have suddenly become rich and posts pictures of their “Business trips and meetings” in Malaysia and Dubai having fun. (Reality: They bought the tickets by themselves only to post pictures so that their innocent friends would think that they are doing something really cool)
5. No matter how much you ignore them, they will keep on calling you till their last breath. We already know that this is not the characteristics of a person who has even 10% self-respect in him/her.
6. And then one day they tell you that they have an open position of a Business Partner. He also tells you that he trusts you a lot and hence has arranged a meeting with his seniors to introduce you, probably in a CCD :-p
7. They tell you that you can earn more than 4 crores in just a few years but do not tell you exactly what your role in the business is, but overall this guy looks so convincing that you almost feel that if you do not join him, you will miss out!
8. He makes you feel that you are running in a Rat Race by working in your current job and that their Business is the only way to change your life.
If you have experienced this and escaped, Congrats! You are one of the Lucky Ones! Sadly, not everyone escapes, some join it only to lose their money because they chose not to dupe more people.
For me, it was quite unexpected in the middle of the night to be suddenly slapped with the questions about my life while watching a sci-fi movie, and that’s the right only allowed to my Punjabi mom :/
I give you 4 words for all this crap: Multi. Level. BullS*it. Marketing.
Ebiz and Multi-level Marketing(MLMs).
Just try going along the plans of your friend’s plan and will end up with a company name: ‘Ebiz’, a nice fitting suit, educational packs worth INR 10–12,000 or more and a network scheme that will ‘help you achieve your dream business’. So, let me put down some details about it.
‘EBiz’ is a company founded by Mr. Pawan Malhan, an ‘educationist and a social reformer’ (and an excellent Plagiarist, Marketer and Diplomat), in 2001. It basically sells educational courses and tutorial CD’s but does not use its resources in advertising and distributions, rather uses the principles of an older, questionable strategy of “Multi Level / Referral Marketing”
Multi-Level Marketing
According to Wikipedia,
Multi-Level Marketing is a marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company’s products/services, while the earnings of the participants are derived from a pyramid-shaped commission system.
So,lets take example of a usual company X.pvt.ltd who wants to sell its product. Generally any company has distributer ,sub-distributors ,Retailers… then the end user .so hypothetically, If the company produced a pack of chips at Rs 8 (MRP Rs 20),it keeps Rs 6 as profit and sells it to distributer @ Rs14 .which keeps Rs 4 and sells it to sub distributer @Rs 18, which keeps Rs 1 and sells it your nearby shop @ Rs 19 , which then keeps Rs 1 and sells the chips to you @Rs20. This is known as distributing “commissions” to sellers.
Usually, the product maker has to spend a lot of money on marketing and advertising to get distributers and buyers.
But Company X is smart. It decides that it will sell its product directly to the user who will spread the word about them in his circles. The more people he/she convinces to buy the product, the more commission he gets. Thus, X asks you to buy a product for 100rs and promises you’ll get 10rs for every man you convince to do the same. So, if you convince 50 men, you earn 500rs, that’s 400rs in profit. (try seeing it from the company’s perspective. they earned 5100rs (51 men including you) from you, and 4600rs in profit). This is multi-level marketing.
But it does Sounds cool and familiar, isn't it ? Share and earn. We all have played that game, which gives you coin bonus on sharing the referral code to your friend. Well, that’s kind of MLM, in a safe and casual way. But if you are thinking about getting seriously into this business, well here is a quotefrom Wikipedia:
“According to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, at least 99% of people who join MLM companies lose money.”
And,
“MLMs have been made illegal in some jurisdictions as a mere variation of the traditional pyramid scheme, including in mainland China.”
More About Ebiz
Their Product.
From the resources mentioned here, this is what I have come to know:
[1]( http://qr.ae/TUTR6b)
[2]( http://www.investmentschool.in/who-pawan-malhan-real-life )
[3]( http://qr.ae/TUTR6U )
- They market their scheme as ‘Learn or earn or both.’ You will buy their Educational Course Packages worth a Rs 11–12,000 : cd’s and study material consisting of computer and other educational courses . But You will not actually ‘buy’ the courses, you get a ‘membership’ in ebiz business plan.
2. Under the ‘optional’ business plan(optional by choice, but who doesn't want free money anyway? ), you get placed in a level of this “Binary Compensation Plan” . All the people you bring, will be placed at the lower row of tree than you. At the end of each month, each person will get commission based upon the no. of people he has recruited and the level of tree he is currently present . Based on his recruiting, he may reach the higher tiers of tree.
3. From personnel experience shared by many users, the courses provided by the company are crap and not better than those found for free on the internet . But the company provides ISO certificates for its courses(which any educational institute can get from the government ) and a chance to learn ‘entrepreneurship and professional life experiences’
4. People working under it have Strong believes in The company’s claims for transparency and business systems .( so strong that they work even in nights while having casual conversations XD)
So That’s all about what I can write about https://www.ebizel.com/ from a neutral (and safe) point of view. However, I would like to dig much into the concept of multi level marketing.
Back To Multi Level Marketing.
The Business model.
As I stated, the business model of a referral marketting is a pyramid shaped model in which the consumer buys products directly from the company’s centres and recruit other consumers in buying the same and recruiting more members in return of a small percentage of commission from the company itself. Thus, the company gets free advertising and a large consumer chain distributed in a tree-like model.
The profits.
As I explained earlier, the company distributes profits based on referrals and pyramid levels.The more you refer and people under you, the more you earn. That’s kind of a good form of marketting, isn’t it? A business in which you will be willing to thrive and remain active . But
Quoting wikipedia,
Indeed, the largest proportion of participants must operate at a net loss (after expenses are deducted) so that the few individuals in the uppermost level of the MLM pyramid can derive their significant earnings — earnings which are then emphasized by the MLM company to all other participants to encourage their continued participation at a continuing financial loss.
So suppose you bought a CD at Rs 50 from Mr H with the condition, that for each person buying with your referral will give you Rs 1 at the end of the month. But at the end of the month you only persued 5 people to buy the product, giving you just Rs 5. Thus at the end of month, you are still at a loss of Rs 45. Furthermore Mr H also earned Rs 6( you+your referrals ) just because of your dedication.Thus the people at the top of tree becomes richer and richer by the people who got tricked into joining the pyramid at the bottom.
Employment law.
MLM salespeople are not employees of the MLM company. Participants do not derive a salary/wage, nor do participants receive remuneration from the MLM company for their invested labor and expenses in their MLM “independent business”. The income of participants, if any income is made at all, is derived only from commissions on their personal sales or their share of the commissions on the personal sales of their downlines (the MLM compensation structure).
As non-employees, participants are not protected by legal rights of employment law provisions. Instead, salespeople are typically presented by the MLM company as “independent contractors” or “independent business owners”. However, participants do not possess a business in the traditional legal sense, as the participants do not hold any tangible business assets or intangible business goodwill able to be sold or purchased in a sale or acquisition of a business. These are the property of the MLM company.
Philosophy( personnel opinion)
· By personal experiences, I have found these MLM companies to have a great marketing philosophy of “(Theoretically)pay all the participants” ,and “raising each other by helping and utilising human resource”. They hire great diplomats and speakers just to brain wash people that they are doing the best job in the world and how to trick others into getting into the scheme, as they did.
· The target audience is generally the unemployed and the youth . Thus the salesmen there tries using personnel emotions like motivational quotes , future schemes , ambitions , etc to get you into this. Sometimes these salesmen are very close relations , and use of such harsh terminologies leads to disputes and clashes( and that’s really stupid .) :/
· Sometimes the product marketed by the company is inferior and unworthy, but you got to keep selling and referring them unless you won’t make profit.
· Moreover the tempting urge to earn easy money by “working from home” deviates the young youth from actually studying from those course materials.
· Finally there are companies which are total scam and runs with the money after getting a sufficient user base. And you can do nothing, but to wait for it to return “someday”, to give your monthly commission .
Closing notes.
1. Ebiz is “Government Registered Educational company that aims to provide certified computer education many of the deserving people and to provide a means of good quality of life for thousands of willing eBIZ Retailers / Representatives through Their Computer program”.
2. MLM’s are “(falsely or rarely) Government Registered fake companies that aims to sell their cheap, products at a high rate to foolish/innocent people and use them to provide free labour and no salaried advertising using their referral/ pyramid scheme.”
3. MLM’s are banned in countries like China. But companies like Amway and Herbalife are still practising it freely in US. In India, The system of pyramid marketing is banned but not multi level marketing ( which usually has a pyramid structure in the inside of it ¯\_(ツ)_/¯ ). In China, volunteers working to rescue people from the schemes have been physically attacked ( god , protect me! )
4. The U.S. Federal Trade Commission (FTC) states: “Steer clear of multilevel marketing plans that pay commissions for recruiting new distributors. Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people — except perhaps those at the very top of the pyramid — end up empty-handed.”
5. If you still didn’t got the sarcasm in 1st point, well EBIZ is an MLM and a complete fraud.
6. This video explains the Multi Level Marketing in the most comical way:
