TPampered Chef: Not a Pyramid Scheme - Explained

[heat123]

Ok, my husband said TPC was a pyramid scheme (because of the whole recruiting-having teams and getting bonuses from teams etc) like Amway and although I don't exactly know how those work, I told him it WAS NOT a sheme and that it was different even though I dont' know how?? Can someone exlpain the difference? Just so I know and if someone else were to say this, I could reasonably explain that it is not.

 

[gilliandanielle]

I was under the impression that in a pyramid sceme you only make ok money once you have a ton of people under you. With PC you decide your schedule to earn as much as you want and recruiting is more of a bonus thing. I am not an expert though and interested in what others have to say!

 

[erinyourpclady]

I agree with Gillian...PLUS we never take anything from our team. Pampered Chef PAYS us our overrides, our downlines do not lose anything from their profits to us.

 

[pamperedlinda]

Well....all direct sales are built on the pyramid. (actually, so is the corporate world when you come right down to it) ...but the big difference is that PC does not REQUIRE you to recruit like other companies do. The recruiting is there if you want to build your business. PC does not care if you EVER RECRUIT....remember "Your Business Your Way".

Many companies that are pyramid don't usually have retail stock to sell either. They get you in by "buying a membership" in order to get a discount.....

Hope that helps and that you understood what I was trying to say....anyhow, that's how I understand it.

btw, when I started PC my DH was a little leery of the whole pyramid thing too, he's totally supportive now.

Oh, and another thing....most of the companies that are the typical pyramid do not care who they recruit or what their motive are, they only want the $$$

 

[ChefLisa]

Amway (now Quixtar) does not advertise who they are. Many years ago I was approached by a variety of people who wanted me to check out their business opportunity. They never told you they were part of Amway unless you asked specifically if they were part of Amway. I always found that to be very suspicious.

Do you know any Pampered Chef Consultants who do not proudly say the name of their business?

Another point to make to him is that Warren Buffett purchased our company in 2003. Ask your husband if he thinks one of the richest men in the world would have purchased our company if it were a pyramid scheme.

 

[heat123]

Hmm makes sense, thanks Linda and I will clarify this to DH tonight!

 

[pamperedlinda]

Hmm makes sense, thanks Linda and I will clarify this to DH tonight!

I'm sure there is much more to it and that there is an official definition....but that's my answer in a nutshell.

 

[Kathytnt]

A true pyramid scheme it illegal and Amway is not a pyramid scheme and Pampered Chef certainly is not one either. The federal government actually investigate Amway as a pyramid scheme. I can't remember if it was restructered after that or not. The founders are just as above board and honest as Doris.

Chain letters are a pyramid scheme for example - In a legally structured multi level marketing business a person that is recruited could actually move ahead or make more money that the person that signed them up. Example in TPC a consultant could recruit on person that become a Director. She/He will get over rides to the third level if I understand correctly.

Here is a website that explains in detail - I used to be in Amway/Quixtar many years ago. Great people but I LOVE TPC.
http://en.wikipedia.org/wiki/Pyramid_scheme

 

[SilverCeladon]

Nope-we all have the same potential to make money...we all start at the same level and don't have to pay an enormous amount of money to a "higher up" just to get us started, i.e (your director or recruiter).

 

[BethCooks4U]

Had this discussion often with DH and even he is totally convinced after being at a conference with Doris and Jay where they talked about PC's business model.

Some points:

In a pyramid scheme you make money off of the people you recruit and most of your income is from them.

With PC even the highest level directors only get paid up to their 3rd line.


Most of our income comes from our own personal sales.

ALL consultants are required to have sales to earn the overrides and perks.

 

[Teresa Lynn]

I think we are one level under what is considered a pyramid I don't know how it works but I remember talk of it years ago,
I'd be careful who you tout Warren Buffet to, some people do not care for him or his charitable givings. PC was given a bad rap for awhile after he came on board and Doris sent us a letter.
I AM NOT trying to open a can of worms, just warning you he isn't favored in everyone's eyes. It amy come back to haunt you!!

 

[DebbieJ]

My NED gets fired up about this. PC is "network marketing." The bottom line is we don't get the big bucks until we help others succeed.

In pyramid schemes, the recruiter gets bonuses for signing people and then not much else, so the focus is on recruiting recruiting recruiting and then you are ignored.

 

[DebbieJ]

I think we are one level under what is considered a pyramid I don't know how it works but I remember talk of it years ago,
I'd be careful who you tout Warren Buffet to, some people do not care for him or his charitable givings. PC was given a bad rap for awhile after he came on board and Doris sent us a letter.
I AM NOT trying to open a can of worms, just warning you he isn't favored in everyone's eyes. It amy come back to haunt you!!

Warren stopped sending corporate contributions from Berkshire Hathaway to Planned Parenthood after all that. Now he just supports them personally.

 

[ChefLaurel]

My DH said the same thing when I wanted to join

My director told me to tell him - It can't be a bad pyramid to be part of if WARREN BUFFET is at the top (Berkshire-Hathaway)

That made him pipe down

 

[pamperedlinda]

I think the key word in this discussion is SCHEME.....we are not schemers (don't know if I spelled that right - it sure looks strange!)

 

[cmdtrgd]

One thing you need to know is that we do NOT get overrides on our downline unless we hit a sales goal AND our cluster hits one, too. Also, most multi-level marketing people will get paid on their downline even after they have left the company!!!

 

[pamperedbecky]

Warren stopped sending corporate contributions from Berkshire Hathaway to Planned Parenthood after all that. Now he just supports them personally.

AND his company actually stopped giving corporate contributions to ANY organization, not just PP, from the way I understood it. Interesting.

 

[pamperedbecky]

My DH said the same thing when I wanted to join

My director told me to tell him - It can't be a bad pyramid to be part of if WARREN BUFFET is at the top (Berkshire-Hathaway)

That made him pipe down

Exactly!! Anyone who knows anything about the business world will know that this fact means a TON. Pretty impressive!!!

 

[cmdtrgd]

AND his company actually stopped giving corporate contributions to ANY organization, not just PP, from the way I understood it. Interesting.

Personally, I think it is so sad that people could be so closed minded that they freaked out about the donations to Planned Parenthood and threatened to stop purchasing and being consultants. Did you know that Planned Parenthood is not only for birth control?

From the Planned Parenthood website:
With more than 860 health centers nationwide, nearly five million women, men, and teens turn to us each year for essential services — services we provide regardless of income, marital status, race, ethnicity, sexual orientation, age, national origin, or residence.

Planned Parenthood offers high-quality health care, including birth control and family planning, gynecological care, STI/STD testing and treatment, pregnancy testing, and abortion services. Our providers prevent an estimated 617,000 unintended pregnancies annually, helping to ensure that everyone has the right to choose when or whether to have a child, and that every child is wanted and loved. We advocate for expanded access to these services, drawing on a base of 3.5 million activists and supporters. We also work with allies worldwide to ensure that all women and men have the right and the means to meet their sexual and reproductive health care needs.

Even if you aren't for abortion, and that IS your choice, they provide so much more than that!

I'll get off my soapbox now.

 

[pamperedbecky]

Personally, I think it is so sad that people could be so closed minded that they freaked out about the donations to Planned Parenthood and threatened to stop purchasing and being consultants. Did you know that Planned Parenthood is not only for birth control?

Not to start a debate, but I thought it was sad too. AND the fact that it then affected all of the other causes that his company supported because now they receive no donations either (at least through Berkshire Hathaway).

 

[The_Kitchen_Guy]

Ok, my husband said TPC was a pyramid scheme (because of the whole recruiting-having teams and getting bonuses from teams etc) like Amway and although I don't exactly know how those work, I told him it WAS NOT a sheme and that it was different even though I dont' know how?? Can someone exlpain the difference? Just so I know and if someone else were to say this, I could reasonably explain that it is not.

The following paragraphs were taken from a business plan that I wrote as part of an entreprenuer workshop I took a couple of years ago, while not the definitive answer, it's a place to start.

Because The Pampered Chef® is a direct selling company working through independent consultants, detractors might say that the Pampered Chef® is a “multi-level marketing” scheme or worse, a Ponzi scheme.

It is most certainly not a Ponzi scheme, where only the first to enter the pyramid are the successful ones while latecomers are left holding the bag. In the strictest sense of the word, the Pampered Chef® could be called “multi-level marketing” because sponsors do receive an override on recruits. These override commissions are limited to three levels for most director levels, four levels in the most senior positions. Safeguards are in place to make sure that directors earn their commission overrides.

In the pages that followed, I laid out the director levels and described the cluster sturcture of your PC business. Each consultant is an independent contractor and, as such, in control of what they do or don't do, and each director is in control of their own little cluster. If you recruit 5 consultants, you become a director and you earn an override on them and the first two levels of their individual clusters. That alone is an incentive for you to help them reach the level of director, because when you have two directors in your cluster, you become an advanced director.

As a director, you have rules to follow and goals to reach. The safeguards are more for the benefit of your cluster. If you only recruit 1 consultant, no override. If you recruit 1 individual who is a go getter and reaches director status, but you don't, too bad. You lose them as part of your cluster. As such, you have several incentives to do the right thing to build your business. If you go inactive, you lose your cluster.

In a true pyrmaid "scheme," you would have that cluster forever.

You can assure your husband, if TPC were a scheme, it would have collapsed under its own weight many years ago. Instead, it is one of the most respected direct marketing companies in the world and you can be proud to be associated with it.

He should be proud of you, too, to have the courage to start and run your own business.

 

[jwpamp]

OK, the true definition of a Pyramid Shceme is this:

In a Pyramid Scheme, a person gives money to a person above them in exchange for only the right to be in the Pyramid. There are no products exchanged, and no real property involved.

No, Pampered Chef is not a Pyramid Scheme. We are independent consultants who build our "downlines" to help support the sales team of the company. We ARE the Human Resources Dept. In exchange for us training and supporting our Teams, the company PAYS US an additional amount of commission based on our sales of products.

More about Bershire Hathaway, by the way...their subsidiary companies include: Fruit of the Loom, Dairy Queen, Helzberg Diamonds, Benjamin Moore and Pampered Chef just to name a few. Check out these links:

http://beginnersinvest.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=beginnersinvest&cdn=money&tm=15&gps=86_970_1020_566&f=00&tt=14&bt=0&bts=1&zu=http%3A//www.berkshirehathaway.com/

http://beginnersinvest.about.com/gi/dynamic/offsite.htm?zi=1/XJ/Ya&sdn=beginnersinvest&cdn=money&tm=15&gps=86_970_1020_566&f=00&tt=14&bt=0&bts=1&zu=http%3A//www.berkshirehathaway.com/

 

[fruit76loop]

Can of worms...This issue is always so touchy to everyone. I personally agree with the above posts that it is sad. I proudly announce at every show that we are part of the Berkshire Hathaway company and that Warren Buffett is the owner of the company. It shows that our company has a strong foundation and a huge financial backing, why is that a bad thing? Most people are impressed! Do you really think that those who threatened to stop buying Pampered Chef did not buy from the other Berkshire Hathaway companies?? See's Candy (yummy)? Dairy Queen? Gillette? Geico? American Express? RC Willey Furniture?? Coca-Cola? Bridgestone? (my husband's company is also owned by Berkshire Hathaway!) plus many more?

But each to their own and their beliefs! I am just glad that Warren Buffet, The Pampered Chef and Doris Christopher acted as fast as they did to save us the heartache!

 

[thechefofnorthbend]

I am a Christian. I am a red stater (living in a blue state world...opened a can of worms there, huh?). I am a PC consultant. I do not care for Warren Buffet. I do not care for Dentists, but that didnt stop me from working for Delta Dental for 6 years.

He may choose to donate to whatever charity he likes, once his taxes are paid on his monies, he can take the profits and do with them what he wishes. He is so far up the food chain from PC anyways (and has no direct coilation to our company besides his hand in the pocket of the stocks and the stock holders) that it shouldnt affect our performance one way or another.

 

[heat123]

Told DH the differences and he said he wasn't trying to trash the company or anything but he just assumed all pyramid companies are the same and it didn't really even matter to him either way, if I can make $$ at what I do!
Thaks for all the input!

 

[The_Kitchen_Guy]

Marlene, IMHO, it's good to be pre-emptive about that sort of thing. With the Internet and the ability to rapidly disseminate both information and misinformation, the old adage about truth and lies is multiplied. It says a lie runs around the world three times before the truth has it's boots on. Today, it's more like a million times. Some urban myths take on a life all their own (Bill Gates will NOT send you millions of dollars for forwarding emails) some come and go and come back again (LSD laced kids' tatoos) and some just refuse to die (Otto Titzling did NOT invent the bra.) The Berkshire-Hathaway myth seems to be one of the ones that came and went, but there are some real zealots out there who hang on to this urban myth, despite the evidence, and freely distribute it. You have to cut them off at the pass before they can do any damage to the room.Some people just have to take shots at any good thing that they aren't a part of. (This thread has a couple of examples.)Here's the link to the snopes.com story about this myth.

 

[fruit76loop]

ahhh kitchen guy...I always love reading your posts!! And you are true about those lies and myths passing on so fast!!

 

[Shawnna]

It was sad that many good causes lost contributions because of the decision. However, planned parenthood may provide other services, but their main purpose is abortion and the "myth" information said population control...which basically means killing unborn babies because someone thinks there are too many people. It is my personal belief that abortion is wrong under all circumstances, but that is my personal choice. That does not affect how I feel about other people who believe differently than I do. I do not judge people.

And, yes people did stop buying from those other companies when this situation came to light...I know some personally. What I told people who asked me about the situation was that once Mr. Buffet received his income he was free to do with it whatever he wanted. The Pampered Chef was not contributing to Planned Parenthood or abortion. We cannot dictate how Mr. Buffet spends his own money. That is his choice. And, I believe that every company out there has individual people...and shareholder money...being distributed to causes that we may not like. We cannot stop buying everything. We have to eat and we have to have clothes. If McDonald's said they would give a portion of the money from every hamburger sold to planned parenthood...or some other cause I disagreed on...I would not buy a hamburger. But, if a McDonald stockholder said they would give a percentage of their income to planned parenthood, that would not affect my McDonald purchases. I can't tell them how to spend their own money...it does not belong to McDonalds.

All of this being said however, does not change anything and it is really something that should be forgotten. It does not affect The Pampered Chef. People have to make their own choices based on their own beliefs. We cannot judge people by their belief system.

The Pampered Chef is not a pyramid scheme. In a pyramid scheme, only the people at the top make money. With the Pampered Chef we can all make money no matter what our position...consultant, FD, Director, AD, etc. We are free to make as much money as we want to. I love The Pampered Chef.

 

[The_Kitchen_Guy]

Look, we've discussed this topic to death and we're all repeating ourselves. Let's just let the thread die, okay?

 

[thechefofnorthbend]

Look, we've discussed this topic to death and we're all repeating ourselves. Let's just let the thread die, okay?

BANG!! [shot it dead]

nuff said...

 

[Susan M]

I come from a corporate working world and clearly remember a company just down the hall from us where I was working that was shut down due to this type of activity. He was investigated and shut down by the FBI and the Federal Secruities Exchange. He had a pyramid scheme going on with selling bonds.

A pyramid scheme is when one person is at the top and nobody can pass you - think of an actual pyramid and how it is large at the bottom and a point at the top. If you are working under someone at the top - you will never get there nor make the same money that they do - unless they quit or resign - then the next person in line moves up to the point of the pyramid. This is very illegal and The Pampered Chef is in no way even close to a pyramid scheme - everyone can become a National Executive Director and you can only earn so far down in your line.

This company is the most honest and thought out organization I have ever seen and I for one am very proud to be a Pampered Chef Consultant/Director and would challenge anybody who would refer to this company as operating as a pyramid scheme. They obviously don't have a clue as to what a pyramid scheme is.

 

[cmdtrgd]

Susan - hear hear! And, check your signature. Putting your website in it is a no-no. Just put /susanmott if you want people to be able to go to your site and steal ideas!

 

[The_Kitchen_Guy]

Look, we've discussed this topic to death and we're all repeating ourselves. Let's just let the thread die, okay?

BANG!! [shot it dead]nuff said...

Darby - apparently, you missed.