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SkyBiz 2000 - A Mathematical Trick

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A mathematical trick

This page will show you that SkyBiz 2000 is after all only a mathematical trick and a highly immoral and unethical and fraudulent business venture. The figures used herein are the ones that were valid in December 2000.

In Finnish

SkyBiz.com.Inc.īs official income representation

You should find this article at any time on SkyNews pages e.g. http://www.skyboom.com/mail/daily5.html. (link expired, donīt open, danger of redirecting! This one has been copied on the 1st of October, 2000.)

Personal Income Representations

SkyBiz 2000 Associates are reminded that they are not to make any statements about how much income a potential Associate may make in the Home Based Business Program, with the limited exception that an Associate may say how much an Associate has made IF they have personal, verifiable knowledge of the income made, which usually means the income of the Associate making the income representation. However, ANY TIME that is done, the Associate MUST also say how much time, expense and effort went into making that much income AND disclose how much the typical Associate has earned. The typical Associate's income is updated each six months and is set forth under the heading, "Income Disclosure" under the 'Business' button on your Skynary website. Currently it states, "As of June 30, 2000, 2.53% of participants earned between US $1,000 and US $25,000 per week (11 earn $25,000 per week) but the average amount earned is $215 per week and the median amount earned (1/2 earn the same or more and 1/2 earn the same or less) is $70 per week. The great majority of participants earning those amounts have been in the program for a least six months. A participant is one who is actually conducting activities necessary to realize the benefits of the plan."

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Do the reps obey this rule?

In reality itīs very customary that reps of SkyBiz breach this rule. The company does though not enforce the impositions of penalty set forth in the Terms and Conditions.

 

Whatīs a typical associate?

What does the company mean with a typical associate? Most people understand that this means the average member in the business program. But in fact this cannot mean anybody but only those reps who make their first pay-check or more. And they are at maximum 10 % of all the reps in number! And only less than 3,57 % out of all business centers are profitable as you will clearly see!

 

Who will collect commissions?

A Skynary Account is called a business center. One gets a business center by buying a web pak and participating the business program or by just becoming a rep and not buying the product. Youīll find information of the commission plan on every memberīs Skynary page or on site http://skynary.com/source/skynary.asp. (link expired and abused, danger, donīt open) Click "overview" and "business".

How does the business plan work? Who will be eligible to collect commissions? Only those who will sell two Web Paks - one in both legs - and after that they will have seven or more purchases in their downline and the balance between legs must be 1/3 or better. So there must be at least nine purchases in every dowline that pay out any commission to the uplineīs business center in question. Only one out of ten business centers collect any commissions at all - and this is the best case!

 

Collecting commissions and still losing money!

By studying the commission plan you reckon that the first eighteen sales pay out less than the joining (administrative) and hosting fees for the first year have cost. The costs make 25 + 100 = 125 USD/ business center. Commissions make 70 + 35 = 105 USD. So the loss after eighteen sales or more are still 20 USD added with all the expenses due to marketing and promoting the business. Those business centers collecting commissions but still not profiting are less than 5,26 % of all in number. (1/19 up to 27)

 

The winners in SkyBiz are only less than 3,57 % of all the business centers

A business center will be profitable only if it will have 27 sales or more in its downline and the balance between legs is 1/3 or better. This means that only less than 3,57 % of all the business centers will profit anything. (1/28) In theory it is possible that a little more reps than this may be profitable.

Letīs take an example. An associate owns one business center. He/she will collect commissions for 36 purchases, 18 in both legs. Letīs assume that all downline-reps own three business centers. That makes 12 reps. (3x12=36) The associate in question is 1 out of 13 reps, that is 7,69 %. The commissions make 70 + 35 + 35 + 70 = 210 $. The profits are 210 - 125 = 85 $ subtracted with expenses. Usually itīs not enough to cover them. And all the reps in downline will be loosers. So the associate needs to have more reps and business centers in his/her downline, otherwise the pyramid will collapse. And if there will be more reps, there will always be more loosers as in proportion too. So this is the best case when a rep can be profitable. And it is far less than 7,69 % in practice. This example is purely theoretical. The odds are close to zero for this case.

Letīs take another example, more likely to take place. An associate has bought three business centers. He/she gets 52 purchases in the downline of the first businesss center, 26 in both legs. So there are 53 business centers alltogether, out of which 50 belong to others. Letīs suppose that 10 associates own 3 centers and 20 of them own only one. (30+20=50) The associate in question owns 3/53 of the network, that is 5,66 %.There are 31 reps so he/she is 1 out of 31, that is 3,23 %.

Purchase of three Web Paks cost 375 USD. (3 x 125 $) Add all other costs and you get total expenses. The associateīs first business center collects commissions letīs say 350 $ for an Orbit - that is 50 sales. The other two centers have each 25 sales in the downline. They would earn 105 $ each. (both for eighteen sales, 70 for the first nine and 35 for the next nine sales) Total commissions make 350 + 210 = 560 $. The profits will be 560 - 375 = 185 $. This is usually not enough to cover all the expenses. And all the business centers in their downlines are loosers. So in this case less than 3,23 % of all the reps are profitable.

 

Whoīs really "a typical associate?"

Shouldnīt the company reckon the vast majority of the reps as typical associates instead of the vast minority? I reckon they are more than 96 % in number! But now we see that the company has a unique way of defining "a typical associate". They state: "A participant is one who is actually conducting activities necessary to realize the benefits of the plan." This must mean a person who really works for the goal and also succeeds in his/hers efforts. And by saying this they leave from 90 to more than 96 % of the reps out of the calculation. Is this not misleading? Could this be Christian? What about the high morals and ethics in business? Think!

 

Loosers relax: itīs not really your fault!

How does the company know which reps really "conduct activities necessary to realize the benefits of the plan?" (This is so unclearly stated that I wonder how many English speaking prospects understand it - and letīs not forget all those people who speak poor or no English at all!) Of course they know by the commissions payed out! But it surely does not mean that those reps who never ever got their first pay-check are worse or lazier than others! Itīs the poor mathematical odds, disrepute of mlm-industry, almost worthless products, the missing contacts and abilities to work in home-based businesses and first of all - the honesty of most of the deceived associates involved in network marketing - that make them fail! They just simply cannot tell lies about the products and the poor business opportunity to their loved ones!

 

Genious pricing

How do the network marketing companies price their products? In a way that the money fleeced is not too much and not too little. The products cost in an average from 30 to 50 USD per month, (range from 15 to 80 USD) so itīs not enough for most people to complain about very much. But itīs enough for the perpetrators: they receive what they wanted in the first place - swindle a little from all which eventually makes a lot to a few and itīs often perfectly legal! But even if it were legal in some countries itīs highly immorral and unacceptable and everybody should fight back against it!

 

Want to be honest?

If youīre a SkyBizzer or any other MLM-rep, how do you market the products and promote your business now? By misleading advertising and telling lies about the odds in profiting from the business plan? Or are you really, really honest and tell all the essentials to your prospects that they need to know in order to make a secure and sound decision? Remember that some of them are your friends, relatives and family-members. They want to be that in the future too!

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Petteri Haipola, updated January 16 th, 2001.

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