The Reverse Funnel System a pyramid scheme
I have seen this written and heard one or two people mention this so here’s my take on it.
As far as the law goes, a pyramid scheme is any opportunity in which people make money solely from enrolling others. It is illegal in most countries. This is different, because people get paid for selling memberships to a travel membership club. The retail cost of the membership is $2995 and the wholesale cost is $995. The $2k in the middle is effectively a business running cost.
When you pay $200k for a Ferrari, did it really cost that much to make? I don’t think so. Granted, there is a bit more carbon fiber in it then your standard car, but I doubt if the raw materials cost more than $50k. That $150k difference includes branding, advertising and commissions for the dealerships.
The $1000 that I make on a sale recognizes that I had to do the advertising and marketing of the product and the company does not have to. The product itself used to sell for $10k, it’s just that with modern technology it is possible to spend a lot less on marketing and get the same results.
So my business here is to sell memberships to GRN for less than a $1000 cost. It just happens that the Reverse Funnel System is so efficient and effective that we can do it for a tiny, fraction of that.
So, back to the ‘pyramid’ element. This revolves around the compensation plan which means that every time someone I bring into the business makes a sale, I make $1000 as well. This is similar to several other compensation plans within the network marketing industry, as it is almost standard to pass up payments to your up line. This recognizes the training and support that an up line gives. It acts as an incentive for me to help and make sure that my team members are also successful. An analogy here would be that of a franchise business owner. Yes, they make money on the initial sale, but they will keep making money on the annual franchise fees. However, they will only keep making that money whilst their franchisee’s business stays open - an incentive to help make them successful. The only difference here is that the comp plan in the reverse funnel system provides a much stronger incentive for me to make sure my team is successful.
Also, in a pyramid, you would expect that the people at the top would make all the money and the people lower down would make less and less, down to nothing at all. Well, I can make a lot more money than the people above me, if I do more work. If I bring in more people on my team and help them to make more sales then I will easily surpass the earnings of my up line. I really like this idea, because unlike in the corporate world where a junior executive or salesperson will never make more than a senior exec or ceo. This is quite common in this industry.
So, in conclusion - Yes, I can see how the inexperienced or uninformed would think this is a pyramid scheme, but in reality it is no more a pyramid scheme than any traditional business. It is network marketing, or a spin-off of multi-level marketing, but these are very valid business models.
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