Troy Dooly over at MLM Help Desk is reporting that Lyoness America is being investigated as a possible Pyramid/Ponzi scheme.
After Troy broke the news, I hopped on over to BehindMLM and began reading some of the analysis and comments.
I didn’t go deep into Lyoness, but I did give the compensation plan the “eyeball test”.
My quick opinion:
Anytime you mix the word “investment” with $3,000 start up fees and no tangible product, you are asking for trouble.
Whether or not Lyoness is going to be shut down remains to be seen, but I will say that the hype is pretty thick among supporters.
Check out this comment from “truthsayer”:
Lyoness is different because it is the first global company to use Group or Collective shopping in the conventional business world as a bargaining tool for masses of people with Big Business, Major Brands, Multi Nationals etc. By guaranteeing those companies Loyalty – ie that of the Lyoness members, they gain a larger and regular customer base, which means they can reduce advertising etc.
Apparently this Lyoness Rep. has never heard of the Amway Shopping Catalogue or Fortune Hi Tech Marketing. Amway is probably the innovator when it comes to leveraging the buying power of it’s base.
Back in 1984-1985, Amway struck a deal with MCI to sell it’s long distance service.
Reportedly, the Amway/MCI deal was very successful and probably the first Network Marketing company to leverage it’s consumer base in this manner.
Here’s another one from the same character:
And Lyoness is NOT an MLM. They are ILLEGAL in many countries and many of those countries Lyoness is in….Any member who downpays has 3 UNITS (not people)…so 35 x 35 units = 70 – would be approx 23 PEOPLE in your DOWNLINE – from downpayments (THEY ALSO SHOP & create more FREE single units that come into your team).
This is classic. He screams that Lyoness is not an MLM, then goes on a couple of sentences later to talk about people in his “downline” and later “upline”.
Again, when a business like this has a high entry level ($3,000) and you see the word “investment”, they are likely asking for trouble in the United States.
We will keep an eye on this developing story for you.
They have a tough road ahead to win this debate…. in theory, you think the 'pre-buying' of savings would drive behavior to guarantee users to spend at the merchants that are part of the program, but in the end, the reality is they still have a HUGE issue at the POS to properly track this and have a seamless user experience for both the merchant and the user….. anytime when you have reps relying on the 'front loading' aspect of a program to make enough money to 'stick around', you got problems ahead…. it is difficult to prove that they are making their money by driving spending at real merchants with real consumers with real transactions. Perhaps in Europe it is stronger, but I doubt it is strong enough from actual end users as suppose to reps who 'invested'….
http://www.brainshark.com/hargant/vu?pi=678443078&dm=5&pause=1&appKey=77 Password 2020Vision
I just was exposed to this opportunity and within a day I’m seeing all sorts of “stuff” posted online regarding the legit standing of Lyoness North America. They obviously have been doing business in Europe for 10 years… mind you I’m not a rep.. I’m still researching.. however this link is rather compelling info when comparing Lyoness to traditional MLM.. listen then you decide..
I have been with Lyoness for a year and networking since I was 18 years old. I have seen lots of companies both good and bad and Lyoness is one of the best things I’ve ever been a part of and I’m not saying this to self promote. I would hate for anything to happen to Lyoness after working as hard I have to grow this business.
http://www.lyonessscamreview.info
One of the number one detractors of Lyoness on the internet was Troy Dooly,