eli5 How do multi-million dollar pyramid schemes stay around for so long?

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The company’s that everyone knows are MLM trash (HerbaLife, JuicePlus, ect). When I was looking for a job I naively joined a seminar discussing CutCo Knives. Come to find out these dud muffin companies have been around since my mom was growing up, and are somehow still operational? Wouldn’t the BBB or whatever business bureau operates in the US (FTC?) have these scams shut down by now? I understand that new ones are popping up all the time but im referring to the ones that have been around forever now.

In: Economics

41 Answers

Anonymous 0 Comments

Bc theoretically, the business works. If you have the distribution, capital necessary to store inventory, and correct incentive to sell, the business makes sense. But then you layer in all the middle men, less than sophisticated associates who cant do above, and the incentive for “good” associates to recruit rather than sell product and you get bad outcomes on average.

Thought of another way you are statistically likely to lose in a casino. Ppl still gamble. Some will drive the Mary Kay pink Caddy, and most will go home broke.

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