Are They Really a Pyramid Scheme? – IronMag Bodybuilding & Fitness Blog

by Matt Weik

There are going to be quite a few people pissed off over my take on this, but it’s the way I see things and my experience from being in the industry for over a decade. As some of you know, I worked for a very large supplement company. My time with the company was spent growing their mid-Atlantic territory until I was handed a role running their Team Sports division and worked with college and professional sports teams. During my time there, I noticed a few things that I truly didn’t agree with and rubbed me the wrong way, which ultimately got me thinking about things.

I make money for you, not the other way around

The thought of spending days at a time away from home building a territory at first didn’t seem like such a bad gig. Until I realized that I was away from home more than I was home each week—paying a mortgage on a home I never seemed to be at. Sure, I signed up to oversee nearly 10 states when I first began, and then I noticed something that truly bothered me. The money I made the company also paid other people who had nothing to do with my sales, who got to go home every night and sleep in their own bed. So, in essence, I way helping pay commission to people who did nothing to earn it, including my boss.

While I enjoyed my time working for this supplement company, I was quickly becoming jaded knowing that teammates who made zero sales were collecting commissions off of my sales when in return, I was supposed to make some off of theirs and there were none. I was working hard while others were sitting around with their thumb up their ass. This got me thinking about MLM companies and pyramid schemes. The below and what I’m talking about in this article isn’t just the company I worked for, but can be said about many other companies out there structured the same way from all sorts of industries.

How the pyramid works

At the very bottom of the pyramid are the hard-working grunt employees. They are generally the sales team who goes out and are given their marching orders in terms of what areas need to be focused on during a given week and where to focus their efforts in order to grow the company and then report back on how their week went through a report every Friday. These individuals at the lowest level of the pyramid have a snowballs chance in hell of ever working their way up to becoming CEO, so essentially their potential to grow within the company is somewhat capped. Now mind you, these individuals either have a low base salary with commission, or are commission only. What happens up top does not filter down to this level. They money stays up top. Oh, and by the way, this level generally fills the pocket of those in the upper levels of the “pyramid.” As if they weren’t already sitting comfy with their salaried income.

Above the employees at the bottom are the supervisors or middle management. These individuals are in charge of overseeing what the lower level employees are doing. What I quickly found out from my position with this company was that those above me (my superiors) were dumb as hell. They generally were sitting in such positions because they were friends with someone high up. Sure, they could sell, but they had no true industry knowledge nor cared about making a difference in someone’s life or adding value. To them, everything was about the money. In fact, my boss was with the company over ten years when I started and he couldn’t tell you a thing about the products he was trying to sell other than the basics of what a protein is used for and creatine, etc. My hard work was putting money in the pocket of someone who had no true idea what anything meant on the supplement label. In all honesty, I’m not even sure why he was still with the company. He was a great bullshitter, so maybe that had something to do with it?

Above the supervisors and middle management is the Vice President, then the President, and then the CEO. Honestly, none of them truly understood anything about supplements, they simply understood numbers. In fact, many of them came from industries that have NOTHING to do with health at all. Personally, I’d rather see someone work their way up the ladder who understands each level and can help grow the brand on all levels and not just focus on the numbers. Someone who has industry knowledge and understands the details of the products they produce. Some of these people never even used supplements in their life!

So, what am I getting at? For all the people out there screaming bloody murder about MLM companies and pyramid schemes (I was one of them), Corporate America is pretty similar. The people at the bottom make everyone else money as you go up the totem pole. Each sublevel makes the next upper level either look really good or really bad. I’m not saying this is right or wrong, it’s just the way it is. And looking back, I see how much money I made people who truly did nothing for the company and rode on my coat tail hoping I made a ton of sales to help pay their monthly mortgage. Heck, we even had sales guys who sat at home and played video games while their distributors went out and did all the work! And the best one was a sales guy who let his distributor do all the work while he went out and worked a separate full-time job!

A common saying was, “you’re only as good as your last sale.” What my boss was saying is that my worth to the company is how much money I can make each sale. Or, how much money I can make to put in my boss’ pocket before he would consider eliminating those below him to bring in someone new who could potentially sell more and make HIM more money and make himself look good. When the sales stopped, so would that individual’s employment (which I consider fair, you can’t collect a paycheck for not doing any work).

You see, we are quick to judge pyramid schemes and MLM businesses. Yet the worst of all of them just happen to have the name Corporate America, which makes it sound much better and we accept that term as being the “norm.”