At June 1st, 2014 LSN – LEAD System Network is going to launch. Now in may 2014 the Internet (well, at least mlm-prone part of it) is buzzing about it. What is is? Is it a scam or pyramid scheme or legitimate MLM?
LSN – piramid scam or MLM
Let’s think first, what is it? Is it MLM with good and useful product, or is it pyramid scheme, where people down the line pay for those up the line?
To decide we need to analyze the product (good solid and needed product indicates MLM, shady virtual useless product indicates pyramid scam). We also need to look at compensation plan.
Lead System Network: the product
The product here is a set of “marketers’ tools”. Many people do not look deeply at the product, they just talk about finding new downline members, But let’s see what we have here:
- Autoresponder – if it is good autoresponder then it has some value (if you know how to use it), otherwise – there are some free autoresponders out there. So it needs to be good to be worth anything.
- Blog. Well.. anyone can start a blog for free. On many platforms. And you must have something to write about, or it is useless otherwise.
- Voice Autoresponder. Very interesting, looking forward for details.
- Lead management – is it for LSN leads, or external use?
- Lead capture pages – same as above
- Chat. A chatroom? Who you gonna talk wiht there? There are plenty of free chats.
- google hangouts – really? It is free
- Postcards (post leads followups). Who will pay for stamps? In which countries will it work? Anyway, interesting.
- Webinar room. For how many people? Is it stable?
In $100 pro packet there is also mobile app creating tool. There are free tools, maybe this one will be better. And bulk mailer?. To do… bulk mail? To who?
Very interesting. The company promises 100% commission. I wonder how? And if so, how do THEY earn money? Who pays for the tools costs (server, transfer)? Let’s not be naive. Santa Claus will not pay for running those tools.
I see a simple solution to this puzzle – you pay $50 a month, and your “sponsor” gets $30, and this is called 100 % commission . The company gets $20 (19,95 to be exact), sponsor gets $30 and he is convicted that he gets 100%. Everyone is happy 🙂
Note also that the 100% commission is for $30 products only. And just for customers you find directly, not those that spillover (or spillunder) in the matrix.
In the case of the pro package ($100) however, the commission is 50 %, and the other half goes to the “matrix”
Many people are excited by the fact that they can get $1000 without recommending others – just for the registration. But remember, that you need to spend $150 on products first ($100 for pro , $30 for basic and $20 for nothing)
You must also have 3 levels of paying members – 3 + 9 + 27 people = 39 people , paying a total of 39 * 150 = $5850 per month. And remember that you will get $1,000 without sponsoring anyone just once, if you want more – then you will have to find person willing to pay $ 150 a month.
Note that this is not so, that you sign up you pay $150 and get $1,000. You also need to have 39 people under you in the matrix , each paying $150 a month.
And what if you do not have so many people that bought the pro version ? Then perhaps you will be paying $ 150 a month until you find them 🙂 For example, if you have 2 people under you, each paying $150 you will earn 2$. See first comment after this article for explanation (thanks, WealthTeam 🙂 ).
Here we return to the story of Santa Claus – do you think that someone will give you $1000 for nothing? Or maybe instead of giving that money to you the organizer of this MLM should enter himself in that position and collects $1000 himself – why don’t he/she do it?
LSN Compensation Plan
Let’s talk about the cost first – you have to pay $20 (19,95 to be exact) every month and pay for the product too – basic $30 or pro $100 + $30. To make money from the matrix you need to be “pro” fro $150.
The marketing plan, (commission, remuneration) – is based on a forced matrix with spillover 3x3x3x3x3 ….. This means that at you is a maximum of 3 people on the front line and 3 times as much in each successive level. Note that in order to fill 6 levels you need : 3 + 9 + 27 + 81 + 243 + 729 persons , a total of 1,092 people .
To make money from “matrix” needs to find at least one person who will pay the $ 150 / month . To earn up to level 3 in the matrix you have to have one such person registered person (ie, you have to find one willing to buy this package for $100 +$30 + $20 ) . Down to 6 levels ( which consists of 1,092 persons as mentioned ) you have to find 6 willing to spend $ 150 every month. Down to 9 levels of 9 people.
As far as I know, the matrix only gets commission from the pro products for $100 .
See matrix rules below. Notice that in order to have a full 9 level you have to find ( yourself or with your downline ) about 27000 people paying $150 a month – that’s more than $4 million per month. Good luck.
There’s supposedly a 5% commission from the biggest leg down to infinite levels . Think – what if 21 people want to have a 5 % commission on that leg? 🙂
There are levels of master distributor for $1000 and franchise partner ($2500 ) but it is for serious MLMers, and they probably deeply understand how it works 😉
How much you earn, how much you lose?
We know what are the costs – 50, 150 or more a month , depending on the selected level. How much can you earn?
It depends on :
- How many customers will find these tools. Each customer get you $30, but only if he or she likes those tools. And it depends on whether the tool (eg autoresponder) are worth the price.
- If you choose to pay $ 150 a month – your earnings will depend on how many people you will personally talk to join for pro level (+ spillover)
- It can also make mobile applications for other people for money, if you can find customers for that and if the app generator will allow you to make a good application.
Prelaunch and reality
All enroll like lemmings, as long as it is free, and then what ? Typically, as they realize that they have to pay $50 $150 every month, most of them quit. And then what? Will you find these 50 or 1092 people willing to spend $ 150 for the opportunity to do mobile applications ?
In order to realistically predict you possible earnings , think about how many basic packages you can sell other people? How many people you can encourage to pay $ 150 every month for basic and pro, and whether they’ll need a tool to make mobile applications? Remember that although the spillover can get you some people do not count on much. You must rely on yourself.
Summary and whether this pyramid scheme scam
Well, technically it is not a pyramid , because apart from paying cash to the system it also has a product to sell . But how much will be worth this product , and if its value will be adequate for the money, and whether anyone will buy it off people interested in earning on it – it remains to be seen.
After June 1, 2014 we will be also on the quality of the products and if anyone is interested in that if it is to pay their own money ( and not just sign up for free as part of the general euphoria) . As will be some interesting news on the topic LSN that you will inform about it here , you can also write a comment below.
Feel free to comment and adding comments. Is something wrong I have described ? Do you want to add something?