Pyramid schemes do not deliver dollars

 By Nicole Sherman

We have all heard of pyramid schemes, but do we really know what they are? According to Investopedia, a pyramid scheme is a “sketchy and unsustainable business model, where a few top-level members recruit newer members, who pay upfront costs up the chain, to those who enrolled them. As newer members in turn recruit underlings of their own, a portion of the subsequent fees they receive is also kicked up the chain.” Basically, these schemes are destined to fail and the only people that really benefit are those at the top of these pyramids. 

Many women and girls are being recruited every day on Instagram to take part in one of these pyramid schemes. Women receive a direct message or a comment on one of their posts from a “recruiter” profile that usually starts with something along the lines of “Hey Girly!”, followed by, “I love the vibe on your page! Would you be interested in helping me out with ___?” Almost every time I make an Instagram post, I receive at least one comment or direct message asking me for help. Recently, I answered one to see what they wanted me to do as "an ambassador." 

I responded to an international clothing brand called “Sincere Sally” that has been direct messaging and commenting on my posts for over a year. Despite my repeated efforts to block their account and all associated accounts, they keep making new ones and trying to recruit me for their ambassador program.  I direct messaged them and told them I was interested and wanted to learn more. During our exchanges, they kept emphasizing that this was a “small business” (with 619,000 Instagram followers) and that I could do it from the comfort of my own home, despite my busy schedule. Basically, I would be buying products from their company and posting about it on my social media to recruit other people to be ambassadors or to buy the product. From my understanding of the agreement, there would be no compensation on my end if nobody else signed up or bought products using my code. Basically, it is really hard to be successful with this type of scheme as many people do not want to get involved in pyramid schemes.  

While pyramid schemes are marketed as a way for people to work independently and make money from their home, it is nearly impossible to actually make a living and be successful doing so. The vast majority of participants are spending and risking a lot of money to join this scheme, with little reward. Pyramid schemes may not be illegal but they usually hurt everyone who isn’t at the top of the pyramid. People who look to pyramid schemes as a side hustle to make more money usually won't be successful without a very large social media following. I have seen many celebrity ambassadors make money from these types of schemes because they have a fan base that will listen and purchase, but your average girl with a few thousand Instagram followers will likely have a problem making ends meet. Instead of preaching to people you do not necessarily know and asking them to buy products, you’re reaching out to your family and friends and sometimes even making them uncomfortable with your desire to get them to buy into a scheme that you fell for in the first place. 
It is estimated that 30 percent of Americans are in some way self-employed or work side jobs, but how many of that 30 percent are successful off of pyramid schemes? Probably only the top of those pyramids, while the majority of participants are left at the bottom now having to find another side hustle to cover the damages this one created.