Was I approached by a pyramid scheme masquerading as a personal development company or am I overthinking it?

[tudhkuuy]

Hello. I came here cuz i honestly dont know where i should ask about this. So my friend is an employee of a personal development company and pitched to me an offer to join the company.

So this is how the company works:

1. A member of the company offers you training packages with varying levels (like gold level, silver level..etc) that you have to pay for. the package includes training sessions on personal development.
2. when you pay for the package the member that offered you the package also gets paid cuz they got you to join.
3. as a member you can pitch the package to other people to recoup the money you spent initially. after a while you also start to make profit the more people you convince to join the organization. you can move upward in the company if you get a lot of people to join. its a gradual process that takes months-years. once you hit a certain number and is active in the company they give you a physical office to work in. My friend is currently a full-time employee and has a physical office with that company
4. the income source can be divided into 2: active and passive. active income is money you get when you get a person to join. passive income is money you get when the person you convinced to join convinces another person to join. you can also get money if you pay a package to be trained as a trainer then work as trainer for the company. they dont give you a set monthly salary. sometimes my friend makes nothing in a week, other times she makes as much as 9k local currency per week (about 90 dollars).

also you cant withdraw the money that the company deposits for you until you hit a certain number (i didnt rly get this part. its like the money u get should hit a certain number? i dont rly know)

so my friend joined them while she was still in college. i heard from another friend that they target teenagers and college students.

Is this whole thing a scheme? or am i overthinking it? like the typical pyramid scheme i heard is u invest like 50 dollars then get 100 dollars or stuff like that. the company only brands itself as personal development company and they do give actual training sessions but the way they get new members to join just seemed so shady for me. The friend who works there told me she benefited so much from the training sessions (they have lectures, games, group activities) and she felt more confident and reassured about herself. Like idk at this point.

This is taken from their official social media page: "This is A personal development company that helps you program your subconscious mind to overcome challenges & achieve your goals. we Build a leading DS company where IBOs own and supervise their own company!"

Is there actual business models out there that operate like this or is this thing a scam?

Edit: I also wanna ask as to hw all this gonno turn out? and in what way could the members be harmed by the company?

Edit2: this is their website: Alphagenuine | Breakthrough Trading S.C - Home . apparently they have given training in the biggest univeristy in my country. its a wonder how they are getting away with the whole thing

 

[lolbin7]

@tudhkuuy yes, it's a pyramid scheme. avoid.

 

[tudhkuuy]

@lolbin7 thank you for replying. i wanna ask hw is this all gonno turn out and what the consequences could be? another friend is considering joining them and i need concrete reasons to why all this is a bad idea

 

[lolbin7]

@tudhkuuy how are you going to find customers?

you're going to ~~ask~~ bug your friends and family and then start working your way through old contacts burning social capital and damaging your reputation and relationships and probably not making any sales.

eventually you will come to see this for what it is, but it will a personally expensive life lesson.

but the key question is the same as for any business, "how will you find customers" and "what is the cost of sale" and therefore how much profit do you make per sale.

these scams work on naive people because they don't understand concepts such as "cost of sale"

 

[madi]

@tudhkuuy If you are paying because you want the product -> Normal company

If you are paying because you want to resell the product -> Multi Level Marketing (legal but very scammy)

If you are paying because you want to recruit other people -> Pyramid scheme (illegal)

 

[tudhkuuy]

@madi oh okay. thank you

 

[ilovemykitty]

@tudhkuuy Bro you are underthinking it, literally 7 words into your first bullet point already explained it was a pyramid scheme.

 

[bcp1928]

@ilovemykitty Same. Reminded me of when Jim draws the pyramid for Michael.

 

[tudhkuuy]

@ilovemykitty yeah... well concept of pyramid schemes isnt that well known where I live. I was mainly aware that something shady was going on cuz I'm chronically online and felt something was off about the whole thing