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

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Anonymous 0 Comments

A shady MLM tried to recruit me once, and they didn’t do anything illegal, they just deployed an array of psychological tricks. Story for those interested:

I was straight out of college, looking for a first job, and I got an interview for some vague ‘marketing’ position. I show up, and I’m guided to a few rows of chairs where I sat with a mix of other timid, young-looking folk and some well-dressed, professional looking guys. The lights dim and a ridiculous presentation video starts. “Bill Gates, Albert Einstein,” goes this booming voice, “what did they have in common? When opportunity presented itself, they seized it!” I start giggling, and I turn to the guy next to me (one of the well-dressed fellas) to make a joke, but he’s nodding his head along to the video, deadly serious. So I sit back, watch another 15 minutes of buzzword-saturated bullshit, and finally the lights turn back on. Guy next to me immediately grabs my shoulder and goes “wow, this looks like an amazing opportunity! We need to get in on this!” Each interviewee was seated next to a ‘plant’ who would sell them on the company. They tried to get me to sign something, and I refused. Other people were signing, and when they did, their plant would shout “(Name) here just took her first step towards financial independence!” and all the plants would cheer. They really set it up to make you think you were an absolute moron if you declined. About the third time I declined, my plant said “I guess it looks like you don’t want to be rich and successful” and turned his back on me. Didn’t escort me out, just ignored me, like I was supposed to come crawling back. I stood there dumbfounded for a beat, then walked out of there (alone) as these other people signed on for the next seminar or whatever, as the plants all cheered them on. I’m sure all of those people got milked for as much product as they would buy, and then the company moved on to recruiting the next generation of suckers. Truly one of the most bizarre things I’ve been a part of.

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