Is Forever Living a Pyramid Scheme?

When I first tell people I am involved with a network marketing or multi level marketing company, one of the most common questions I get asked is ‘is it a pyramid scheme?’   I then ask what do you think a pyramid scheme is, and the questioner is usually left stumped as they don’t actually know.  It is just a phrase commonly associated with this sort of business, and they vaguely think of it as something that is illegal and not very positive.

What is a Pyramid Scheme?

Well, in order to understand and answer the question, first you need to understand what a pyramid scheme is.

According to The Free Dictionary, the definition of a Pyramid Scheme is “A fraudulent moneymaking scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them. Eventually, the number of new recruits fails to sustain the payment structure, and the scheme collapses with most people losing the money they paid in.”

Schemes like this are illegal, and the only person that can ever make any money from them are the people at the top.  They are unsustainable and doomed to failure.

How does Forever Living differ from a Pyramid Scheme?

There are many reasons why Forever Living is not a pyramid scheme, the more obvious ones being

  1. When you sign up as a forever business owner you do not pay any money to the person who recruited you.  You enter your own contract with Forever Living directly either by purchasing some products or buying a business owner box.
  2. The business owner box or evaluation pack you can buy when you first join is a box of products and literature which you can use to get your business started.  The value of the items in the box is actually far higher than the price you pay for them.  There are no ‘fees’ to pay in order to join.
  3. Everyone buys products from Forever Living to resell at exactly the same price.  If you have bought the evaluation pack then this is at a 30% discount.
  4. Forever Living has been trading since 1978.  The company is cash rich and debt free and operates legally in over 155 countries worldwide.
  5. You are paid a commission by the company based on the activity of the forever business owners you introduce.  The more people you introduce, the more you get paid.  However, you can make money purely by selling products if that is what you wish to do.  There is no obligation to recruit your own team.
  6. It is possible to earn more money that the person who recruited you.  If you work hard and build up your own team then you will be the one to reap the benefits of your own hard work.
  7. If you decide that Forever Living is not for you, there are terms and conditions which permit you to return and be refunded for products which you have not sold, within reasonable time constraints.  There is also a 14 day cancellation guarantee which allows you to get your money back if you change your mind.
  8. If you treat Forever Living like a serious business then you will be paid in kind.  If you treat it like a hobby then you won’t and may even spend more than you earn.

The reason Forever Living is confused with a pyramid scheme is there are similarities in the shape of the structure of the teams.  However if you have a traditional job think of the hierarchy there with a company director, managers, supervisors and staff.  Isn’t that a pyramid too?  Don’t confuse the structure of the company with the illegal pyramid schemes.  it is just an unfortunate shapely coincidence.

Do you work for a Pyramid Scheme?

Do you work for a Pyramid Scheme?

Just for fun…..

I also love this cartoon on YouTube about network marketing – it has a creepy Steven Hawking type voice over, but I love the sentiment behind it.

Want to find out more?

If you are keen to find out more about Forever Living and either starting your own retail business or building your own team then do get in touch with me and I can send you more information about Forever Living in your area, or read my previous post about joining online.

Advertisements

21 thoughts on “Is Forever Living a Pyramid Scheme?

  1. Reblogged this on musingsofacoeliaclibrarian and commented:
    It is interesting that Direct Marketing is still often compared to illegal pyramid schemes. It is helpful to have a post like this explaining what a pyramid scheme is, and how the Forever Living Direct Marketing system differs from it.
    Every role I have been in has had a staffing structure that looks like a pyramid when drawn on paper.
    What I particularly like about the Direct Marketing system is that the structure of the organisation is in that shape, but that the amount you earn at each position in the structure is reliant on the amount of work you put in to developing your business, not to your position in the structure. This means that I know of many occasions where a team member is earning more than the team leader who recruited them. You won’t get that in a traditional company.
    Another reason why I am so pleased to be working in Direct Marketing where the only way to improve your business is to help others develop their own successful businesses, with the side effect of helping people with their health and well being with such wonderful products.
    Get in touch with me if you would like to find out more about whether this would work for you.

  2. So, if someone wants to join and is unemployed, how can they afford the starter kit etc or even the goods regardless of discount. There is one FL rep texting just about everyone to join up. Thing is if we all did wed be fighting for sales. The fact that you have to pay £200+ to join means that the average joe wont be able to afford it. They may have Aloe Vera for Sales but you can get it from Health shop for less. This is Pyramid selling otherwise the reps wouldnt be so forthright and desperate to get people to sign up. 3 of my friends have been approached and 1 of them had lost her job. she was desperate to get a job but se said to me, where do i find that kind of money from. its a scheme, regardless of which ever way you put it.

    • James,
      You raise some very interesting points, which I will try and answer for you ,
      1) “ if someone wants to join and is unemployed, how can they afford the starter kit” – If someone has been unemployed for a while and fits certain criteria then they can get help with starting their own business. I have team members who have had a grant to cover the cost of the initial box. If this is not possible in your area, or if you do not fit the criteria, then I have another post called “How Much Does it Cost to Join Forever Living” with some ideas on how you can join if you can’t afford the £200 box. You really need a supportive sponsor to be able to follow my advice in this other post.
      3) “There is one FL rep texting just about everyone to join up.” If you don’t like the way an FLP rep is approaching you then politely decline. Saying No Thank You is an acceptable answer. Perhaps they are not the right sponsor for you. I was approached to join FLP many times before I found the right sponsor for me. You will only do well if you find a sponsor who you can work with and who you feel comfortable with. As you point out, there are many to choose from.
      4) “Thing is if we all did wed be fighting for sales.” FLP is about building a relationship with your customers, using the products yourself and talking from experience. People buy from people, and in FLP we make a connection with our customers and they buy from us because they want to. Yes there are other distributors my customers could buy from, but they choose to buy from me because of my character, the service I offer, and my good advice. There is more than enough business to go round. Just stop people randomly on the street and ask if they have heard of FLP – and most of them will not have heard about it. You just need to choose carefully where your market your business.
      5) “They may have Aloe Vera for Sales but you can get it from Health shop for less.” We do not promise to be the cheapest Aloe Vera product on the market, but we are top quality. Our products have Aloe as the number one ingredient, we only use the inner leaf gel, and we pride ourselves on the purity of our gel. Yes other Aloe products are cheaper, but my customers want to buy the best quality.
      6) “ This is Pyramid selling otherwise the reps wouldnt be so forthright and desperate to get people “ This does not make FLP a pyramid scheme, it just means this particular rep is very keen to recruit team members If FLP was a pyramid scheme then it would be illegal and we would not be permitted to operate in over 150 countries round the world.
      7) “ its a scheme, regardless of which ever way you put it.” FLP is a way for you to build your own business. You cannot expect to be able to build a business without any personal investment at all. I’ve been running an IT services company with my husband for almost 15 years and it took a lot more than £200 for us to set up and get all the tools we needed to start trading back in 2000. In my experience without that initial investment people do not take FLP seriously. They treat it like a hobby which means they never get anywhere. Having to invest money, time and effort means you take it seriously and have a better chance of success. You get everything you need for £200 to start your own business – ask around and see how many other types of business you can start for such a small investment.
      8) This business is not suitable for everyone. You need to have the right attitude, be willing to work hard and as part of a team, and be willing to learn, and most of all you need to be self motivated as there will be no-one to tell you to go to work every day. If this is not something you or your friends are willing to do then move on and find something else. If you find the right team to work with though, and the right sponsor, then you can really fly with FLP.

      I hope I have answered some of your queries. I thank you for your post. If it doesn’t feel right for you then that really isn’t a problem, there are plenty of others who it does feel right for and those are the ones I am looking to help.

  3. It fills me with scepticism that the phrase”case credits” are thrown around in a way to mask the impact that genuine money would have on the sellers. It makes no sense to sell the product direct rather than recruit because larger brands of this type of product are sold at much more competitive prices than what the seller’s can offer.

    In essence each person is recruiting their target market which disables their ability to re-sell a product and make a consistent profit (this is the area where money is replaced by case credits). Somehow recruitment will earn the recruiter money despite the fact it cannot be guaranteed the recruit of whom recently signed up will sell or even recruit further.

    Also, if forever sell their product to the seller’s at a rate that is lower than they purchase it for themselves, then how on earth are they making money as a business regardless of how much it makes. I can’t figure out what pricing model they are using without thinking that the entire thing is full of lies used to decieve sellers into bringing friends and family in on an idea that can’t possibly be seen as a bulletproof investment, despite being sold as exactly that

    • I will try and answer your points – but I think you do not fully understand how the business works and probably need to have a chat with an established distributor.

      1) Case Credits are used so that progress can be measured uniformly in any one of the over 150 countries Forever operates in. You can convert them into a rough monetary value in your own currency but it would be too complicated with exchange rates for Forever to reward distributors on the value of orders alone.
      2) I have two distinct businesses – a retail business and a team who I assist in building up their own retail business or team. Each person is different and will be looking for a different size/level of business. Yes when I recruit someone they then sometimes go quiet and never order again – this is their choice. I spend my team with the team members who ask for my help and wish to work on their own business. I only receive a bonus from the team members who actively build their business – and I offer them my help, time and support to earn that commission.
      3) Forever do not sell the product for a lower price than they purchase it for. Forever manufacture their own products. It is exactly like any shop who buys products from the manufacturer or distributor for a lower price then sells at the recommended retail price. Forever make the products – they then sell to the distributors at a 30% discount on retail prices – we then sell to our customers at the recommended retail price. We earn that 30% as our commission, and also earn a bonus based on the items we buy. They are able to sell to us at that discount as they have no shops, no advertising, we don’t need to keep stock as we buy the products as we need them, so the costs are low for us and for Forever meaning the profit can go to the distributors.

      • Good for you, I don’t see what people’s problems are, you are being completely honest, you are even telling them what your profit margins are, alot of business people would not be doing this. This is a legitimate business and I believe not much different from the way Avon works. Good luck and all the best for the future X

    • Jay, I wonder what you have taken from my post that makes you think Forever Living has no interest in repeat business and it’s customer base?

      I personally have a core of loyal customers who order regularly from me, and they also come to me for advice about the products too. I am able to give excellent customer service and I appreciate their loyalty to me as a distributor.

      In turn I have the support of the Forever Living head office, who are able to answer questions if I can’t answer them myself, and my local distribution centre in Milton Keynes is run by a wonderful couple, Maureen and Alvin Bloom, who have given me tremendous support in building my business. And it goes without saying my sponsor and team members are always my first port of call for advice.

      I am part of a truly supportive network of distributors, and we all care about our customers.

  4. I have started but I find it very hard to get people to join under me, I have had so many party’s now and sold a lot of products, but still not getting up the ladder, running out of options now.

    • Retail is a great way to start and quickly make some profit. Many people try the products first and decide to join later so keep doing what you are doing, attend the training and learn from your upline.

  5. thank for the questions and answeres..hope most people got answered..i havent recruited anybody so far but i enjoy selling my products and happy with the profit..

  6. Thank u so much for this blog. It’s exactly what I was looking for and explains every thing so clearly. Fantastic and thank u xxxxx

  7. Thank you for your responses to many unanswered questions. Your responses are well articulated and explained clearly!

  8. Hi, i am a FL Rep too. It’s always alarming when you read so many comments from people who haven’t the slightest idea on how to ask ‘What is Forever and how does it work?’ yet claim to tell us all anyway what they THINK it is, regardless of the truth of it.

    To all you doubters out there concered on how the Forever Company pays us when we Recruit: Do you know that Netflix will REWARD you if you introduce a Friend? Well, this is what we do to and we are REWARDED for introducing new Team Memebrs.

    Good luck to you all.

    Oh, and if you find yourself un-employed and don’t have £200, then you need to ask yourself, what have you actually been working for all that time? If you need to be told how to reaise £200 then this is not the business for you and you should look for a factory job, or shelf stacking at the Super Market.

    I’m not usually this blunt, but it’s been one of those days I guess. Too many nuts in my Cereal.

    Great Blog by the way. Love the Animation.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s