“Today you’ll be a new member, next week you’ll be one of the expectants…but please don’t ask questions because I am sure you’ll find them answered during my talk!” This was how presenter Mohamed Magdy Abdallah started his vague presentation.
I had been invited by a colleague to attend a leadership skills training session; only to find myself stuck in one of those MLM [Multi-Level Marketing] company talks. Remember the Qnet talks you used to hear about a couple of years ago? Yup, those ones!
What the presenter should have said was: I shall proceed to ramble on for the next hour and a half without a pause till you forget all of your questions and any asked shall be answered with vague unrelated answers which my passionate friendly tone shall compensate for.
Sadly, I couldn’t believe we were entering the year 2019 and people are still falling for these scams. So today, as a responsible citizen, I think we should discuss MLMs, pyramid schemes, and anything else that would help spread a bit of awareness. So that no one gets bamboozled into losing their savings.
An MLM is a multi-level marketing company. Multi-level marketing (MLM) companies are known by a variety of names: network marketing, referral marketing—and more pejoratively (and/or when done unethically), pyramid marketing.
In this structure, marketing and sales reps not only receive compensation for their own sales, but also receive a percentage of the sales generated by other salespeople they recruit (commonly known as one’s “downline”).
Consultants involved in multi-level marketing usually sell products directly to consumers through networking and word of mouth. Nearly 9 out of every 10 consultants are part-timers or work from home as distributors of a given line of products.
In a typical pyramid scheme, you pay to join. The scheme relies on you convincing other people to take part and join in with their money as well. For everyone in the scheme to make a profit, there needs to be an endless supply of new members.
Some pyramid scheme promoters disguise their true intentions by introducing products that are overpriced, of poor quality, difficult to sell or of little value. Still making earning money their main aim.
So now that we’ve established a few definitions, let’s get to the real talk.
What all MLMs have in common:
1-They “claim” not to be a scam
Their explanation is that they sell products and not points as Qnet used to do in the past (they never mention Qnet by name). So, their money is guaranteed! They also claim legitimacy by arguing that they help organize big international forums and have headquarters in developed countries.
Now assuming that this is true, most people would think having headquarters in a developed country like the USA would be a sign of legitimacy, which is probably what Oikaa is aiming for.
However, even in the USA people suffer. They are constantly misled and abused by MLMs. So, when are we going to learn that not everything that comes out of the west is verified and safe?
2-Their members are always keen on recruiting more members
Emphasis on the power of direct selling and the word of mouth was of course prominent throughout the presentation. Since like Qnet, this entire scheme depends on you recruiting others to join the scheme.
3-They promise that even if you recruit a small amount of people [and for sure you know many], you’ll be making money.
The presenter ensures the listener that even if they’re not successful in recruiting lots of people; they’ll still be winning. Since if their profit is 0.5%, it would still amount to 5000 LE per year, because you’re bound to know someone right!?! And that someone knows someone and so on, so it’s a guaranteed success. No way you’ll lose your money and the only skill you need in order to make more money is to talk up people like you, easy!
However, author of “False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes“, Robert Fitzpatrick who’s been studying pyramid schemes since the 80s. Explained in 2013 that the math doesn’t add up:
“The math is a distortion, a manipulation of what they call exponential expansion. Exponential expansion is two times two times two times two. And almost all of these schemes tell you that you can make money by just recruiting three or four, five, let’s say, five. Then you let the five do their five. That gives you 25. That’s the exponential expansion.
That’s the trick of the whole thing. What they don’t show you is that you can only do that 13 cycles. And you would exceed the population of the earth. So, it can’t work. But even as long as it works, the vast majority are always in the bottom positions, which have not yet and never will, in most cases, extend the chain so that they can get their money. And so, it always dooms the vast majority and it can never keep going, so it’s unsustainable”
We did the math! and today in 2019 after 14 cycles you’ll exceed the world’s population – and assuming that EVERYONE wants to be recruited, it’s still impossible to move up their supposed hierarchy to become a leader.
And here’s how they market themselves. They look for those who are desperate and in need, those who are family oriented and want a better life for their families. Sounds familiar? They target countries like Egypt, India, South Africa, Mongolia, Venezuela, and in large countries like the United States some of the prime victims are Latinos, as is shown in the documentary “Betting on zero”.
4-They always play on the vulnerable side of people. Saying things like, take control of your life, set your own hours, work from home, make extra money – a lot of money
Their slogan is “I TAKE CONTROL BACK”. The presenter, who’s also a member and a recruiter himself, went on drawing big spider-like hierarchies of points and numbers that somehow magically add up to a member earning 75,000 LE a week.
Implanting dreamy ideas in people’s heads by asking questions like “what if you could reach the success of Bill Gates in 3 or 5 years?!” followed with a promise of becoming an entrepreneur and playing on the idea of becoming financially independent and having the opportunity to travel with your family more and anywhere.
5- They always seem incredibly legitimate
For example, Oikaa’s fashion brand LO dressed the national team during the World Cup and now a year or so later, they still keep their profile picture of Mohamed Salah wearing their suit and logo pin. It doesn’t mean he endorsed the company or its activities but it’s definitely something they’d like viewers to think and will mention extensively during their talks.
So, in the viewers’ mind, if they’ve worked with such high-profile celebrities, they must be legitimate.
They also make claims that they contributed at NYFW [we have yet to find proof of that].
What they don’t tell you is: In Egypt, according to Rebel Economy, several regulations prohibit this type of activity; while in some countries like Australia, pyramid schemes are completely illegal.
In the words of the ACCC [Australian competition & consumer commission]: Pyramid schemes are illegal and are very risky ‘get-rich-quick’ schemes that can end up costing you a lot of money.
6-They have an influential founder/president
One of the influencers who impact Oikaa the most is its founder, Khaled Obeya, who has around 15000 followers, and his page on Facebook is continuously being flooded by praise from those who say he’s had an amazing impact on their lives [because yeah everything you see on Facebook is believable and fake accounts don’t exist!]
You’ll find photos of him attending the WFDSA forum in Dubai representing Oikaa. But here’s a bit of history about this guy. A few years back, he was Qnet’s 1st Diamond Star; a type of ranking they give to premium members.
7-Their influential side plays on “humanitarian” tunes
If the influential, inspirational array of coaches don’t work on you there’s always your soft side to work on. Oikaa makes extreme claims. Like the idea that their “Kingdom Bootcamp” are educational and enhance leadership and marketing skills; or that their vision is to “eliminate poverty”!
So, when are we going to start using our minds and realize that there is no such thing as easy, fast money, and that anything that claims otherwise has to be a scam?!
Well if our education failed to help us with the math, let’s work on awareness. You know what Oikaa is, right? it’s taking back control of our lives and brains.
So today, I have an exciting opportunity for you to make the world a better place. And it’ll only take 30 seconds of your time. If someone you know is planning on investing money in Oikaa or a similar MLM, this is your chance to make a difference! get them to know that this is a scam, and that network marketing will ruin them.
Start by sharing this article with 5 friends and instruct them to share with another 5. Using the math, we should be able to cover everyone in the world after 14 cycles and we would help stop people from getting involved in these scam schemes.
So, start the cycle and send this to as many people as you can.
what are you waiting for?!
Has this ever happened to you or anyone you know? Let us know in the comments!