Home » Business

Xocai - A Pyramid Scheme?

Aug 18, 2008
Let's face it. You can't deny the hype. Google Xocai, and all you see are hyped up ads promising you an abundance of wealth if you join their Xocai team. It's no wonder Xocai is getting a bad rap because of the in-your-face "pop-up" style ads many network marketers are using. Before you jump ship we need to clear up a few things.

There is a night and day difference between pyramid schemes and multi-level marketing. A pyramid scheme is an unsustainable system where an individual primarily makes money by simply enrolling another individual. The key here is that it is only recruiting that is actually bringing money into the "pyramid." This type of business model is obviously unsustainable because there is no tangible product involved. While few may get rich the pyramid inevitably crumbles and the vast majority of participants are left stranded. Pyramid schemes are, in fact, illegal in many countries including the United States. While there are many businesses in this country practicing a type of "pseudo" pyramid scheme, Xocai is certainly not one of them.

At first glance, Xocai does have a pyramid structure. There is a small group of people at the top. These are the company founders, CEOs and primary benefactors. From their it spreads out to more and more people who represent and work for the company. Does this sound familiar? In reality, every company has to start some where and by default, it will resemble a pyramid.

Another way that Xocai is similar to a pyramid scheme is that they pay their independent distributors to enroll new members. Well, in fact, this happens all the time in the business world. It's called a "commission." Employees are paid incentives to sell products, and recruit clients. It is what literally makes the business world go around.

But regardless of this, there is still a clear and significant difference between a legitmate network marketing company and a pyramid scheme. That is - the product.

The concept of network marketing or "multi-level marketing," refers to an alternative strategy for product promotion. Many major companies use mainstream advertising techniques. These can include, TV ads, print ads, and other types of multimedia. But network marketing companies employ a system of advertising where the actual advertising budget is paid to individuals as a reward for marketing a specific product.

Whether the company chooses to employ traditional methods, or alternative methods such as network marketing, is a decision that is often made before the launch of a product or company. In the case of Xocai, they made the decision early on, that they wanted company revenue to be shared with it's consumers. I find it hard to fault them for that.

The facts are simply this: Xocai has a solid business model and product. And their "healthy" chocolate seems to fill a very unique niche. While their network may resemble the shape of a pyramid, as do most companies, they are about as far from a scheme as you can get.
About the Author
David Webb writes for http://www.ProfitingfromtheInternet.com, a free resource for making money online and growing your online business. Click Here for more information about Xocai! For more articles like this please visit: Click Here for Profiting from the Internet!
Rating:
Please Rate:
(Average: Not rated)
Views: 246
Print Email Report Share
Article Categories