Kyani Pyramid Scheme: Can a Health Company Have a Pyramid Marketing Model?
Before you read the below article, please note that the phrase &8220;Kyani Pyramid Scheme&8221; doesn&8217;t mean we are saying Kyani is a Pyramid Scheme.
It is not.
They just have an MLM marketing model that can be confused with a Pyramid Scheme by some people who don&8217;t know what a Pyramid or an MLM is exactly.
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What Is Kyani?
Kyani or Kyäni Inc. is essentially an Idaho based MLM company specializing in health nutrients.
Studies by independent organizations reveal that perhaps some of their claims could be rather difficult to digest.
Questions have been raised on their overall business model as well.
In fact, complaints have been registered with the US Federal Trade Commission on possible Pyramid Scheme allegations as well.
So are the allegations of a Kyani pyramid scheme justified?
Or should we say that it is an aggressive multi-level marketing initiative that distractors are ready to malign like Amway, Younique, Arbonne and Transamerica often convinces its team members about the negative publicity it gets?
Well, before we delve any deeper into whether Kyäni Inc is legitimate or an illegal pyramid scheme in reality, let&8217;s devote a little more attention to the functioning of the company.
Founded in 2005, this health and wellness supplement maker earns profit via commissions earned from converting its customers to distributors.
The company&8217;s products are supposedly well received by the customers.
Now the question is if the products are well received because
- They are extremely effective and help customers gain good health?
- Or are the sales driven primarily because of the opportunity it provides via recruiting more representatives?
Converting the customers to distributors isn&8217;t illegal.
When you use a product and you are happy with it, you recommend it to the others.
You will appreciate if the supplier company compensates you for this.
They can do that to encourage you to promote their products.
There is nothing wrong with it.
What if they offer you to recruit the others as well and encourage them to promote the products, and then they compensate you for that in addition to selling the products?
2) Is This Illegal?
Can you name it a pyramid scheme?
If you make money through the sales and even the monthly membership fees of your direct referrals, then it is called a two-tier marketing program which is legal.
However, if you also make money from the third, forth and&8230; downline levels&8217; sales and membership fees, then it is called a pyramid scheme which is illegal.
You have to note that when you refer some people and they can also refer some others like what you do.
And, their referrals can also do the same, and so on.
But when you don&8217;t make any money from the referrals of your referrals, then the program is a two-tier marketing system.
It is not a pyramid scheme and not even a multi-level marketing program.
Keep in mind that even multi-level marketing is not illegal in some cases unless the program breaks some special rules.
So you can&8217;t call a program scam, as soon as you see they pay you if you refer the others.
A Scam Pyramid Scheme or a Legal MLM
In most cases, it is not that easy to distinguish whether a company like Kyani and what they do is a scam pyramid scheme, or a legal MLM or maybe a two-tier marketing program.
Kyani is an American company that can easily be prosecuted by FTC.
Having complaints still doesn&8217;t mean the company is scam and has problems.
The reason is that some people are used to complain against anything and call everything scam.
All business are scam from some people&8217;s point of view because they make money.
Some people think that someone or a company who makes a lot of money is scam otherwise it wouldn&8217;t make any money.
What people think and say doesn&8217;t make a company or a person, scam.
I am not saying this to say whether Kyani is legitimate or a a scam pyramid scheme.
What I mean is that it is not that easy to accuse a company for being scam.
You have to be careful.
Understanding the Kyani Pyramid Scheme
Well, one fact that can be mentioned in support of Kyani; it is not an outright pyramid scheme.
At least, there is a real product that is in use and which the company is using to attract more distributors to its circle and increasing the base of the pyramid.
Perhaps, one of the facts that differentiate this pyramid from many others is that the US Federal Trade Commission might be proving that it sells a real product.
Just that its affiliates in many ways end up becoming some of the biggest customers that the firm boasts of.
Though they have a credible product in hand, the question is does it justify to pay the price that customers pay for the product.
Most times, you are stuck in the business as a result of the hope that you will be able to recover at least some part of the money through the recruits you get and the commission that you can earn from that as a result.
Minimum Sales Level
Most times, it is seen that sales representatives of the pyramid schemes continue to keep the products and maintain their bare minimum sales level till it is sustainable.
Beyond a point when it starts taking a toll on their resources and overall savings, many continue even then in the hope of recovering some bit of the savings that they might have invested.
The fact that many representatives are unable to still extricate themselves push them deeper into the overall investment quagmire adds to the woes.
It can be the same with Kyani too.
One basic aspect that you must remember is that if as a sales representative, you are not making more than $1000 and continuing with the same company, is it still worth as an alternate career.
To most, it would be a logical no, and that is exactly why the Kyani pyramid scheme attracts negative attention.
Recruiting Is a Problem
Most time representatives are not able to convince more than two or three people at the most as potential recruits.
As a result, the gains are again limited only to a selected group and the common participant is unable to optimize on the overall returns prospect that the company promises.
Of course, this is the problem that all sales representatives in any program have, not just in the pyramid schemes that Kyani can be one of them.
For example, only a very low percentage of realtors make money because they are able to sell.
The others have problems.
From my point of view, this cannot be known as the sign of a Pyramid scheme because in any business, there is a low percentage of people who make real money.
The rest, struggle and give up.
Marketing and recruiting are not easy jobs and not everybody is able to make money through promoting of the products or recruiting the new members to company.
Another factor that raises the question mark on the legitimacy of the business model that Kyani follows, is the fact that how authentic are their claims of the efficacy.
The products claim that the Alaskan berries are one of the star ingredients that make their products great because of the Tocotrienols that they contain.
You don&8217;t have to be a scientist for knowing this one but what exactly Tocotrienols are.
Neither is there any detail about Tocotrienols or what they are supposed to do.
It is difficult to find a reference about how to even pronounce Tocotrienols, let alone the authenticity.
Kyani: The Concern Areas
More concerns that should act as the signal of being a pyramid scheme against the Kyani business model and could mark it as a scam is the fact that despite being around for a considerable period, it has not expanded its business product offerings to a large extent.
In fact, despite the limited product offer, the price of the product is rather steep.
Moreover, following the MLM strategy of growth, if you want to chart out your growth within the company, it is deeply dependent on the fact that you will have to recruit more representatives.
There is really no other way to go about.
The product might not be completely a flop.
But as in any other MLM strategy, network marketing is not that simple to adopt.
To continually convince recruits and rope them in is not really everyone&8217;s cup of tea.
Moreover, the compensation plan that Kyani follows is shrouded in mystery and is not available for anyone&8217;s reference.
As you get deeper into the net, you get to understand it piece by piece in tranches.
Interestingly, the only ones making money from the business are undoubtedly the whopping 1% who are at the top of the rung and call the shots.
Of course, the other members of the pyramid scheme could make money as well if they could refer and recruit.
Like Younique and Arbonne, Kyani is a Better Business Bureau or BBB registered company.
Surprisingly, 67% of the reviews have been positive.
8% have been neutral and only 25% of them have been negative.
So Kyani has a good BBB records.
So frankly there is no clear yes or no to the question whether Kyani is an illegal pyramid scheme or a legitimate business?
The authenticity of the product can be validated to a certain extent.
Perhaps the business model is more dependable.
But the MLM way of working surely makes it a major concern.
The fact is today you can work on numerous avenues online and earn money without recruiting anyone.
You can also make money without investing a big chunk of money.
So, why would you choose this over other options?
Ultimately the fact remains that if you want to make money as a Kyani representative, you have to recruit people aggressively and sustainably.
That sure makes it an unviable proposition even if not illegitimate.