by BigBallinStalin on Sat Nov 03, 2012 1:05 pm
Solavei
As Solavei's customer base expands, it will become marginally less profitable for them to offer unlimited services, to not administer credit/background checks, and to payout the same $20/month per Trio. A Trio is three people who a customer has convinced to join. One receives additional bonuses for advancing up the ranks which are based on the number of Trios one has.
If Solavei doesn't adjust their prices in time ($49.00/month + fees + Trio payments), and/or restructure their production process, then they'll incur a loss.
If they can't escape that situation, they'll go bankrupt.
If they go bankrupt, it may not matter for the owners because they've rewarded themselves handsomely enough over the time of operation and might be protected enough by limited liability laws; however, this is risky because they could lose everything anyway (so why take the risk?).
Depending on the contract, the customers of that Trio system may receive nothing--except for what they've already earned through the Trio-payout system.
Given all that, I don't see what the problem is with Solavei.
Concerns:
1. The present discount value of future streams of income per Trio is subject to change.
2. You could annoy your friends/Trio-customers IF they lose cell phone service, for which they may erroneously blame you.
Is this a Ponzi/Pyramid Scheme?
This may be construed as a Ponzi/Pyramid scheme because you do pay $50/month; however, you get cell phone coverage--which may be worth the exchange for most people. With Ponzi Schemes, you'd pay something like $10,000 and receive 10% per year. You expect to earn more over the years, but eventually it doesn't last as the customer base expands and the owners' streams of revenue fail to cover interest payments. Bankruptcy ensues, and investors/lenders incur losses.
With Solavei, there's no $10,000 investment required, interest payments, and the like. You pay $50/month for cell phone service. If you wish to expand their customer base, you get rewarded for it. If Solavei goes bankrupt, you don't lose your money*--unlike the Ponzi/Pyramid scheme. You lose your cell phone coverage and future streams of income--which did not require some huge initial investment (e.g. $10,000). Solavei obviously is not a Ponzi/Pyramid scheme. If you think it is, then you may as well call ConquerClub a ponzi/pyramid scheme because the more people you convince to join CC, the more you are rewarded. Call the police!
(*This may not be true, so read the contract carefully. During a bankruptcy, they may label you as some owner of Solavei, so you may be liable for paying off the lenders--assuming Solavei borrowed money to first finance this business. I doubt this is the case though because even if you get paid per Trio, you still are not a owner, thus you're not liable. If you're a considered to be a 'shareholder', you'll be protected to some degree by limited liability laws. Either way, read and understand the contract.
Last edited by
BigBallinStalin on Sat Nov 03, 2012 1:16 pm, edited 1 time in total.