Do you think Referral program part of pyramid scheme?
By kingparker
@kingparker (9673)
United States
July 26, 2010 4:45am CST
Those so - called referral programs are part of pyramid scheme, what do you think of that? Let's analyze it further. Let say your friend online wants to recruit you to sign up this website, which he said that you can make at least $20 extra cash for your pocket. He is going to recruit at least 10 other people to sign up for it. On your turn, you have to sign up at least 10 more people as your downline. The logic is going the same on your downline too. Eventually, there is no more people to sign up within your town. But, we are doing this in this world wide web, which we are trying to convince people throughout all over the world. Would that number eventually wipe out by doing this referral program thing? For me, it is purely pyramid scheme. The only difference is that you don't have to pay any money in advance like those realistic pyramid scheme crime out there. What do you think?
2 responses
@cursoralbert99 (412)
• Malaysia
26 Jul 10
Logically, referrals program do like pyramid scheme as in figure in illustrations.
But some might different in their marketing plans and how they will divide the income to you. Most popular I saw nowadays, within referrals program, they will give you 50% commission out of what your referrals earns.
Anyway, they are similar but perhaps what made them different perhaps their marketing plans.
@kingparker (9673)
• United States
26 Jul 10
Yeah, but mathematically, this program doesn't work for everyone though. It only benefit the first person who is in that program. Don't you think so?
@bloggeroo (2167)
• Philippines
26 Jul 10
Yup. Any system employing referrals is a typical pyramid and won't be able to sustain itself with new members, eventually. It should be fairly obvious also that every member is (in reality) competing with everybody else for the next referral. And usually, the members who joined early will benefit much from the program.
Anyway, this pyramid-type of structure can grow really, really fast compared to other structures. For those building an online business fast, this is practically the only choice or at least, the only profitable choice in the short-run.
