The pyramid sales plan, commonly known as the mouse club, is a degenerate "multi-level pyramid scheme". In the United States, it is called "infinite chain system", "pyramid promotion plan", "pyramid sales plan" and "pyramid club"; In Hong Kong, it is called "pyramid marketing method"; Japan, on the other hand, is called "infinite chain selling" and "multiplier marketing", aiming to emphasize that this law is based on multipliers, which can not only double time and space, but also double turnover. In addition, pyramid sales plan is also called snowball sales plan, chain sales plan and pyramid plan. Company name: pyramid sales plan commonly known as: mouse club nature: scam category: sales founder: pyramid selling characteristics: participants must pay royalties concept, origin, characteristics, operation, example, analysis, concept pyramid sales plan is a scam, that is, using high allocation ratio as bait, Simply relying on the bonus system to make sales grow geometrically, so that the income of a few people can reach astronomical figures in a short period of time, in order to defraud new people to join and buy a lot of products that they don't need and can't sell. It is also possible that some companies will tell the direct sellers that they will allocate a bonus rate as high as 61% to attract you to join. But 61% of them have a lot to do. The most essential and simplest way to identify pyramid selling is to refer to the definition of pyramid selling plan by the FTC of the United States: "Participants pay the company in exchange for two rights, one is the right to sell goods; The second is the right to get remuneration for introducing others to join, and the remuneration obtained by introducing others to join has nothing to do with selling goods to end users. " As long as these two conditions are met at the same time, that is, one must pay the entrance fee and the other is the head fee, which is pyramid sales. Carl Hongbang, the founder of Nutrilite Company, and the leaders of their dealer team, Lee Mytinger and William Casselberry, created a unique sales plan in 1945, which is the basic model of today's MLM system. Its operation mode is roughly as follows: the direct seller can get a 35% discount on the two of them. If you can absorb 25 people, and each of them buys a month's supply, you will become a "sponsor". At this time, his own customers and his dealers have to order directly from him. He can earn 35% profit from the sales he sells to customers, and the sales of offline distributors can be up to 25%. When he and the offline dealers accumulated 151 customers, he became the "agent" at the top of the "pyramid". If the offline dealer also becomes an agent, he can draw 21% from their sales. This method has four advantages: it can save marketing and advertising expenses; The price can be higher than similar items sold in other stores; Can develop many loyal customers who like to buy things from people they know; You can use the way of more performance and higher commission to motivate business people. In 1959, Wen Ange and Devise left Nutrilite and set up Amway Corporation (Inc.) to sell their own cleaning agents. The pyramid scheme of Nutrilite Company has been used and improved, and it has achieved great success. In the 1961s, due to the excellent performance of Amway, some unscrupulous businessmen analyzed, studied, plagiarized and imitated Amway's marketing system, and designed a set of "Pyramid Sales Scheme" similar to Amway's marketing system to cheat consumers, which was the origin of what was later called "Mouse Club". According to the data of the Federal Trade Commission and Wall Street, the Mouse Club was first founded in 1964 by American William Patrick in California. At that time, the company was called Holiday Magic Company, and its performance soared from $521,111 in the first year to $251 million in 1972 in just eight years. The "Good Line Products Company" established at about the same time is also the masterpiece of the "Mouse Club". In 1971, the U.S. Trade Commission took the lead in suing Holiday Magic Company for violating the FTC Law, in view of the fact that the "Rat Club" ran around all over the United States and brought many social problems. In the same year, California * * * also reported the illegal behavior of "Jiaxian Products Company". At this point, the "mouse club" can't stand in the United States. So it began to develop internationally, and the footprint of "Rat Club" appeared in Canada, Europe, Japan, Chinese mainland, Taiwan Province and other places. Because of their rise in various markets, profiteering and serious social problems, they were ordered to close down one after another. Feature 1. Participants must pay royalties. 2. Participants must subscribe for a considerable amount of goods and are not allowed to return them. 3. Participants must subscribe for a considerable amount of goods and be allowed to return them, but the hesitation period is very short. From the accounting theory, pyramid sales plan is also illegal. Run a promotion organization called an "investment" or "trading" method, and use geometric progression to earn the fees paid by new members who join these methods, so as to make profits and get rich. Many related fraud methods discovered by judicial units in various countries have a wide variety of names, including "chain letters", "snow balls", "chain selling", "money games", "recommended selling" and "investment lottery". Anyone who wants to become a "distributor (MLM)" must first join a certain "organization", subscribe for a certain number of MLM products or pay a high membership (network) fee according to the requirements of MLM enterprises. The "distributor" can even get a commission from the membership (network) fee for developing the next-level "distributor" without selling the goods. This commission is not based on the number of products sold, but mainly on the number of "dealers" it has developed. This kind of "pyramid selling" belongs to the type of "pyramid selling" and "mouse meeting", which is not a real pyramid selling. For example, in order to join, you may have to pay a small investment or thousands of dollars. One thousand dollars can buy a seat on the ground floor. 511 yuan to your first online, and another 511 yuan to the person at the top of the pyramid, that is, the promoter. If all the positions in the chart are filled with entrants, the promoters will earn 16 thousand yuan, and you and others at the bottom will lose 1111 yuan each. When the promoter earns enough money, his position is cancelled, and the second tier is promoted to the highest level. At this point, the two people on the second floor will start making money. In order to feed these two people, we need to add 32 vacancies at the bottom, and then we will look for new entrants. Every time a level rises to the top, a new level is added to the bottom, and each level is twice as big as the previous one. If there are enough new entrants, you and 15 other people on the same floor may reach the top. However, in order for you to make enough money, you must recruit 512 people, half of whom have to pay 1111 yuan each. In order for everyone in the pyramid sales scam to benefit, there must be an endless stream of new entrants. In the United States, thousands of Americans lose millions of dollars every year because they join pyramid sales. The effective reward way is to add new members (new offline) and their investment, not to sell and distribute real goods to people who actually use or consume them. It does not actually buy or sell real products or services, but is basically an internal redistribution phenomenon in which wealth flows from the new offline to the founder of the organization. This framework can not play a legitimate business mechanism; The only "buying and selling" it carries out is actually the rights and interests of the new offline in the structure and the redistribution of the new offline membership fee (or so-called investment). Pyramid sales method does not seek sustainable business in business, because they basically assume that there will be an endless stream of new people coming in, and they will all be willing to pay the admission fee, and then they will become rich because of the new people who join in later and do the same as them. However, due to the fact that they can recruit only a limited number of new people, the new people who joined later have less and less opportunities to make a profit than those who introduced them. Therefore, such organizations are often short-lived, and those who join in the end have no chance to recover their membership fees, let alone profit from this structure. Because of the lack of tangible products, the early pyramid sales method can be recognized at any time and can also be prohibited by law. However, later fraudulent organizations argued that they were really engaged in multi-level direct selling and did "sell" goods and services in an attempt to deceive the public and avoid litigation. Of course, multi-level direct selling is a well-recognized sales method, which is a way for direct sellers to make profits by selling products to consumers (including those who join this sales method) through an independent distribution network. If we carefully examine the so-called "products" of pyramid sales method, we will often find that they do not have real market value. This is because those products are usually just "gimmicks", such as such-and-such certificates, fake training programs or magazine subscription methods, illusory discounts, or "magic" remedies that are overpriced and extremely ineffective, and so on. Newcomers are often forced to "invest" in buying these products in large quantities, but there is no real possibility to sell these products to real consumers (or return them for repayment). However, the money they invested became the rich income of those who lured them to join.