With jewelry this isn't as much of a concern as it is with MLM's that sell things like health and beauty products.įor example, skincare company Neora was recently sued by the the FTC claiming they are an illegal pyramid scheme. Other deceptions that may get a company in hot water are deceptions and false claims about the product itself. Where things get a little dicey though (with all MLM's) is when distributors who struggle with retail sales end up buying their own products simply to prop up their personal volume. One way Paparazzi Jewelry encourages retail sales is to require consultants to meet specific personal volume (PV) goals each month. Lack of retail sales (in other words, most of the products are being bought by recruits within in the pyramid).
Inventory loading (forcing new recruits to stock a lot of inventory… which then becomes the companies primary source of product sales).They go on to state that two telltale signs of a pyramid scheme that may be illegal are… Some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure. They promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public. However, they all share one overriding characteristic. Pyramid schemes now come in so many forms that they may be difficult to recognize immediately.Here is what the FTC has to say about illegal pyramid schemes… Where things get murky, not necessarily with Paparazzi Jewelry but with other MLM's, is when it comes to false claims and/or tying the products directly to the recruitment process.įor example, if the only way you could purchase the company's product was to also become a member and recruit others, it would be considered an illegal pyramid scheme. However, they are an honest company who earns money by selling legit products (jewelry and accessories) – so no, they are not a scam. If Paparazzi Jewelry were making money by deceiving people, I’d say they were a scam.
Is Paparazzi Jewelry a Pyramid Scheme or a Scam? Any recommendations and/or conclusions are strictly opinions and may not apply to, or agree with, all persons or situations.
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