An actual pyramid that depends on selling to others does have a problem with saturation. There’s even a Dragnet episode about this.
The catch is that Amway *IS* a pyramid scheme, but functions differently. The king pins don’t depend on the sales of products to bring in money. They just need to sell the business tools and get them to come to conventions and they’ll make money.
I don’t know what they use now, but in ’07 or so, they were selling CDs that cost about 50 cents to make, but they were selling them for about $10 or more. And I did the math on conventions. In short, for a smaller one of 5,000 – 8,000, we’ll assume there’s 6,000 people attending. I checked on venues that could host up to 11,000 people. Rental for the weekend (this was around ’07) would be about $25,000 for the weekend. Someone else here checked on insurance: $5,000. Advertising? They do it through CommuniKate or whatever voice mail system they have. It’s not only free, it’s paid for by IBOs. Minions to do all the work for them? People think it’s an honor if they get to help the pins – they almost fight for the honor of doing the manual labor. So that’s free. Hucksters selling items? They pay for tables, so that’s more income. And the IBOs? They pay $100 per person and say, “They’re not making much money. Rental is expensive. So 6,000 show up. It never occurs to one of the drone IBOs, but 6,000 people paying $100 each is $600,000 – which is more than half a million dollars. And the cost is under $50,000!
So if 6,000 people show up, they get $600,000 income minus less than $50,000 in expenses. That’s still over HALF A MILLION in profit!
While it doesn’t go to those hosting the event, it goes to their speakers, which are uplines in other Amway groups. So they’re making big bucks for those speeches. And when other uplines are hosting conventions, the people running this one will be the speakers.
As long as there are those who are gullible enough to be convinced they HAVE to go to these things and have to buy the tools, the uplines will continue to make money.
And there’s new suckers coming along every day. We know at P. T. Barnum said about suckers…
So it doesn’t collapse because the *sell* people on a pyramid scheme where products are sold, but the actuality is it’s a different kind of pyramid.