The New Pyramid Scheme

Commission; what a beautiful, enticing word.

Whilst making a salary is secure, commission is always the riskier and sexier option. Get paid for your good work, and because you only do great work; you’ll make loads, right? Of course it’s never that simple, and luckily most sales/marketing jobs have a basic salary that provides some security when you’ve had an off-month.

There’s a new cool kid in town, though, and they’re offering no basic salary in exchange for a higher commission. They’re so successful, in fact, that their marketing/sales firm is constantly hiring new talent. Tempting, especially when no other firms are going to hire you, or maybe they’re the only firm willing to hire you for an actual sales/marketing position. Despite the lack of core salary, you’re sure you can make it work. Shit, you can sell ice to the eskimos, you’re that good.

Of course, you’re not, and they know that. They just hired you full time, for 9 hours a day, 6 days a week; for £0.

This is the new generation of pyramid schemes.

What are these awful companies?

Usually these are marketing or sales businesses. I’d previously written about “wannabe marketers”, this is the next step up from that.

These pyramid scheme’s usually offering telesales, event marketing, and general sales services. The pricing of these services is never defined by the website – nor are the USPs of why you should hire them if it’s a bespoke service – as they are more focused on selling their lovely working environment. Because of this, it’s clear that their focus is on recruitment, as opposed to gaining clients.

Ultimately, their whole business model is created around hiring on commission only salaries. Rather than marketing themselves, they simply hire a sales team who reach out to potential clients and, once they land a client, hire more sales people on commission for the marketing/door-to-door sales.

Since these employees aren’t paid a salary, the company can hire an infinite amount of them (I’d seen one company have 30 employees at the time of writing). As long as three employees land a sale a day, the company’s owner continues to make money. Of course, that leaves a lot of employees with no sales for the day, meaning they’re making little to no money.

How do they get away with this? They force their employees to register as self-employed as opposed to being employed directly.

Looking on websites like Glass Door or Google Maps you can see previous employees complaining about not being paid their commission, or that sales were so low that they only made £20 a week if they were lucky. It’s clear these are students or aspiring salesman looking for an opportunity to gain experience (and earn some money), and it’s criminal that these pathetic businesses are able to take advantage of their position.

How can I spot them?

Bad Website, Or Not Focused On Their Services:

Because their business is built around recruitment, their website is disjointed. Yes, the homepage says it’s marketing or sales, but the majority of the website will be about achieving your goals and how amazing it is to work for them.

Additionally, because they’re not as successful as they seem to believe, usually they’ve made the websites themselves. As a result, the website is littered with spelling and grammar issues, in addition to awful stock photography.

Narcissistic Managing Director / CEO / Owner / Founder:

Usually their website will have a page designated to talking about the company’s owner. From here, we get a sense of what pathetic cretins run these businesses; arrogant, young, and from a wealthy background. Funnily enough, reading through several of these pages, you realise that most of the company owners actually have no real experience within marketing or sales. Sure, they might have an irrelevant degree, but the majority of the page is talking about their work within the hospitality industry (glorified bar manager), or the countries they’ve travelled.

It’s consistent with what you’d expect from someone who doesn’t pay their employees but still believes they’re a “self-made entrepreneur”.

Keep in mind these are written by the company owner, so when they call themselves an “avid explorer” or “a successful businessman and self-made entrepreneur”, it’s them sat at the keyboard writing it.

Google Maps reviews consists of former employees, not client:

Probably the biggest giveaway; no reviews from actual clients. All the reviews are from former or current employees, meaning they usually have a low rating and a few five stars from current employees who’ve been asked to bump up the review score.

From the looks of these reviews, it looks like people go unpaid for their sales, in addition to many of the managing directors engaging in predatory behaviour.

*

Upon writing this article I began looking further into this new pyramid scheme (/ recruitment scam) and the companies doing it in my local area, Southampton. Upon investigation into their CEO’s LinkedIn, I found that the company owners were all friends, and had other friends running exact same scam in different cities.

Not only is it interesting how these companies all have identical websites, services, and business models; but that they know of each other. Whilst they aren’t creative, I commend them for managing to find people as sociopathic as themselves.

Personally, looking at each of their profiles, I’m surprised they have stayed operational for the last few years. Not only are their businesses borderline illegal, but the owners are grossly inexperienced with marketing and/or sales. In fact, none of them had any previous experience within marketing or sales (unless you count being a personal trainer or bar manager as sales) prior to running their businesses.

There’s nothing wrong with lack of prior experience (I’m similar), but they all claim to be business prodigies with no real evidence to support their beliefs. Calling themselves a “self-made entrepreneur”, or one of them even having a personal blog and titling “My Life: Becoming the ultimate CEO”.

It’s pathetic, but also hilarious how someone running  a low-level recruitment scam can call themselves “the ultimate CEO” considering they’ve only been an inconvenience to society.

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One response to “The New Pyramid Scheme”

  1. Since writing about this topic, I reached out to the Daily Echo to further develop on the story and they stated that it was something they were interested in. If their article ever gets published (hopefully it will) the article will be linked here.

    In the article I’m hoping they will mention some of these businesses, but I will not here as I do not want to potentially deal with the potential legal ramifications.

    Like

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