Wednesday, August 17, 2011

Pyramid Schemes and the ViSalus / Ryan Blair Scam



pyramid schemeI recently read an article on Forbes/Yahoo regarding a certain Ryan Blair and his business ventures. I was drawn to the article because of the topic of entrepreneurship and the piece's focus on Blair's success -- specifically with his company ViSalus Sciences -- even despite his criminal past. In the first paragraph, I was particularly impressed by the fact that the company was on the brink of bankruptcy but Blair was able to make a last ditch effort to save the company -- and not only save it, he invested a million dollars and the company was able to convert it into more than $150,000,000 a year in revenue in only 16 months. Now that got me really curious, so I read on.


However, the article itself revealed very little about the company ViSalus but was instead geared on promoting Blair's book "Nothing to Lose, Everything to Gain." So, I began to do a little research on the net, especially after a number of comments on the article cried "scam." And I didn't have to look far to confirm the suspicion.

Apparently, ViSalus promotes and sells a multi-vitamin pack, not much different from standard supplements you'd find at Wal-Mart or a drug store -- except in price. A 30-day supply of ViSalus' vitamin pack costs about $150 - $170, where as purchasing their equivalents at a drug store would only cost a fraction of that price (and might be more effective too, considering they are legit supplement companies). It is not surprising that ViSalus also provides a stack of scientific evidence to market their product to the ignorant (or scientifically illiterate, as explained by astrophysicist Neil deGrasse Tyson), who seem to be easy prey when exposed to mumbo jumbo and unrealistic claims along with maybe some extravagant before-after weight loss photos for added measure.

Except for the type of product being sold, it's really no different from another scam I previously exposed: FusionExcel. FusionExcel sells "special" rocks, while ViSalus sells "special" powder. Culturally, the Philippines being more superstitious probably explains why the rock is currently more popular there.

They call themselves MLMs or Multi-Level Marketing companies, but it's really a pyramid scheme / scam. The eight-ball method, Matrix scheme, and Ponzi scheme are similar fraudulent systems.

pyramid scheme

"A pyramid scheme is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud."


"The network marketing or multi-level marketing business has become associated with pyramid schemes as 'some schemes may purport to sell a product, but they often simply use the product to hide their pyramid structure.' And the fact while some people call MLMs in general 'pyramid selling' others use the term to denote an illegal pyramid scheme masquerading as an MLM."


"A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula which is used for profit. The essential idea is that a 'con artist' Mr. X, makes only one payment. To start earning, Mr. X has to recruit others like him who will also make one payment each. Mr. X gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, Mr. X gets a cut. He is thus promised exponential benefits as the 'business' expands."


"Such 'businesses' seldom involve sales of real products or services to which a monetary value might be easily attached. However, sometimes the "payment" itself may be a non-cash valuable. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information. The flaw is that there is no end benefit. The money simply travels up the chain. Only the originator (sometimes called the "pharaoh") and a very few at the top levels of the pyramid make significant amounts of money. The amounts dwindle steeply down the pyramid slopes. Individuals at the bottom of the pyramid (those who subscribed to the plan, but were not able to recruit any followers themselves) end up with a deficit."

If you look at ViSalus' website and try to shop for a product, you are prevented from proceeding until you identify the person who referred you. In fact, it's easier to gain shopping access to their advertisement tools and paraphernalia than it is to gain shopping access to their "magic" vitamins. In fact, you can just disregard their product, as it is purely a pyramid scheme, with the purchase of the product merely disguised as the investment ticket into the scheme.

Owner/criminal/scammer Ryan Blair may convince you that you have "Nothing to Lose, Everything to Gain" as his book is titled, but I am telling you otherwise. Unless you are at the top of the pyramid, you are more likely to lose money -- feeding the pharaohs at the top.

29 comments:

elmerlovesoreo said...

I believe that too. You can only get rich in a Pyramid Scheme if you're on the top of the "food chain". David, have you heard of Vera7? I believe it's similar to this.

ami de manila said...

I was a victim of this scam . I was in it because I thought I could have a legit business.

Anonymous said...

Like magic, none of the demos (at fusion Excel) they do will ever pass the scrutiny of a scientifically controlled environment (with high speed cameras, retest, lab work..etc.) They use obfuscation, illusion, and the promise o unlimited earnings to appeal to both our sense of reason and desire to make money....-Ray

Anonymous said...

he's a total scammer and has loyal following of idiots

check out the reviews on amazon!

Anonymous said...

@ami de manila: How did you get scammed?

J said...

hi david poarch. my name is jerry (caucasian) living in bohol for quite sometime now.

i felt sorry if you're not able to buy your delicious visalus shake.  but anyway let me introduce you to a filipino distributor where i placed my order successfully.  here - 
http://ashleydulay.myvi.net/    salamat!  :)

get the facts said...

The difference is ViSalus has more customers than promoters of the product.
Do your research all successful businesses focus on customers first.
If you have a job and your not the CEO, your part of a pyramid and your not at the top.
With 70% of America overweight and 37% OBESE, they have plenty of CUSTOMERS.
McDonalds has Billions served ViSalus is just starting.

anonymus said...

you are an idiot. MLMs are legitimate businesses that MUST have superior products to survive for more than a few years because they rely completely on the word-of-mouth advertising to grow. Instead of paying for ads and a retail site's over-head the company pays their customers to "spread the word" and sell their products. If you had truly done your research on Ryan Blair, you would have seen that he has successfully developed and sold SEVEN million dollar companies in his life and that Visalus, a science-based nutrition company, is only his most recent venture. Also, anyone who has done any study in the area of nutritional supplements in the last 20 years understands that the cr*p you find on the shelves on any of the W stores might as well be flushed directly down the toilet. There is no quality, the absorbability is nominal and the claims of nutritional content are highly inflated due to the horrible but cheaper methods of processing. Please, next time, do your due diligence before you expose your ignorance.

anonymus said...

ill check back to see if you have the courage to post my last post since it exposes your ignorance in this subject. The Visalus website doesn't allow you to shop for a product because they are very strict about giving credit to the person who referred you, unlike many unethical companies who would gladly take your money for a product without paying out any commissions to their distributors.

Bodybyvi said...

 Actually, I might believe what you're saying about Visalus if I had read your article before really trying the product and knowing the difference that the products have made for me. Ironically you say that their vitamins are no different than drug store vitamins, however I always took Jamieson Vitamins right from the drugstore and they never eliminated arthritic pain and changed my ability to function the way that Visalus products have. You make the comment about their vitamins being just common drug store brands, yet have no proof that connects their products to another vitamin brand manufacturers or scientific backing to prove it. Yet the millions of testimonies and more than 87,000 people have had their lives affected by using their excellent products, and I personally I've taken the product and now able to lose weight, become active again, essentially now free from pain and I am feeling great.

Not all Multi – Level Network Marketing companies are completely legitimate however people knock Multi-level Network Marketing without knowing the difference between MLM and a truly fraudulent Pyramid Scheme. Corporate America is set up in a Multi-Level Network Marketing format starting with the man at the top, then the executives, then the level down is the administration and then the labourer on the bottom, however Corporate America likes to keep pushing you down. Visalus's team members always to help the one on the bottom to climb up. Visalus is set up the opposite from Corporate America (incidentally, Corporate America doesn't look too good in the economy right now) and with Visalus every one is paid the same for their efforts. An AUTHENTIC Multilevel Network Marketing company does not operate under the definition of a Pyramid Scheme ... which is {Wikipedia says}, “A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud.”(end of Wikipedia definition)

Your article indicates that you know nothing about the operations of Visalus. Amway and ACN actually have elements of their company that would fit a Pyramid Scheme rather than Visalus. By the way, Avon cosmetics is a form of MLM too that once shone for being the most credible MLM company however in the last few years, changed it's program that caused Avon to be under investigation at some point in the last 6 years. .... I'm just saying..... Your article judges too quickly and makes flat out claims without all the facts and information. Visalus has a 20% growth increase month after month and has been consistently growing since the company was established 6 years ago and so it would seem that Visalus is a recognized sustainable company, that even the NY stock exchange took notice of while our economy is on a slippery slope down.

Jersontriguero said...

If it sounds like a scam, looks like a scam, IT DEFINITELY IS A SCAM...
there is no such thing as an easy-money, if it sounds too good to be true, IT IS!

Sewingsucks said...

You clearly do not have all the information, first being the Vi-Pak vitmamin pack retails for $50 and that is right there in black and white on their website. It is not a pyramid SCHEME it is multi-level network marketing and if you actually did your job correctly and researched it, again it is in black and white for anyone to read. Moron!

Just a scam seeker myself said...

Opinion vs Fact. Poor job. Respect lost. Research not done at all. And that pyramid example is from a scam without a product. Not what the attacked company uses at all.

Janser maciel mansur said...

What you tell us about the "winguard winalite"?
(http://global.winalite.com/product_html/pro_04.html)

Matthews2 said...

Its all over Canada now and these people are given a Bmw if they continue to make sales and of course if they stop they then must take over the 600 dollar plus payments a month for the car.  So stupid its an obvious pyramid that preys on dumb brain washable people.

Psychecee said...

fusion excel malaysia already closed.. affecting millions of investors. their leader paul ting is now in hongkong to avoid the heat of angry investors in malaysia. CLASSIC PONZY SCAM. 

Hunter0035 said...

You guys are complete nuts why cant you grow up and actually try something in life rather than try to bring others down to your level.

Brandigore said...

Wow. This makes me sad. I use Visalus and it has completely changed the health of our family. Keep an eye on them, they aren't going anywhere. Too many lives are being changed. I also know that they have a strict policy of restricting the amount of products promoters can have on hand since so many network marketing companies sustain themselves by convincing someone to sign up and they have to buy a ton of product where it seems like there aren't any real customers. I know just last MONTH well over 100,000 customers joined the Body by Vi Challenge. 

Also, Blyth, a huge and extremely reliable company is Visalus' parent company. Because of the growth of Blythe fueled by Visalus, Yahoo Finance just named them one of the 5 cash cows to have in your portfolio. Looks like you have more research to do.

Wellness said...

Do you actually read what you write or do you just copy definitions off wikipedia?

Mark said...

You are so stupid!  With ViSalus Sciences, I get paid between 700 and 1675$ a week.  I have a BMW paid every month!  I pay taxes on my income to the Gov!   I'm in a better shape, I work and I change the life of people around me!  In add, I help people to get back on the labor market!  ViSalus Sciences isn't a scam, a pyramid or something like Excel or other real scam!  It's simply a Network Marketing System that works fine.  ViSalus Sciences is accredited by the BBB (Better Business Bureau) and I do not think that Michael D. Seidman, MD (Internationally recognized) would not associate his name with a scam...  And I do not think that all these North American athletes would join ViSalus Sciences if it was illegal...  So stop doing bashing on others!  Unfortunately, ViSalus Sciences is too often confused with real scams...
http://www.hearingloss.org/content/michael-d-seidman-md 
http://visalus.com/ 

Jkruper24 said...

I have woked in the flooring industry for 20 years and- YEP I got paid a lot smaller % then the owner. WOW- that is shocking. The people who work 60 hours a week at Wal Mart get paid peanuts compared to the owner. Do both of these sound like Pyramids or scams????
Wake up- if you can sell and build a team you can earn INCREDIBLE money no matter what you do. The people who invent products or start businesses always make more then the people who sell there products. You can always say products are overpriced, but value is only important to the people who purchase the products.
Stop being haters just because you cannot find someone to join your team!

Larry Krakow said...

The truth is out about the ongoing junk in

Anonymous said...

These guys are all over Ottawa, Ontario. The end is near for this scheme, these "entrepreneurs" are about to learn what market saturation does to an unsustainable business model.

Tim said...

i have a very good business do an investigation. thanks!

Tracy said...

YOu have no clue what you're talking about!

Anonymous said...

Understand MLM's have been around for 50 years and are perfectly legal. Understand Pyramid Schemes are illegal. The fact that Ryan Blair has attracted so much attention, the government would've shut ViSalus down by now. This article is so one-sided, the writer probably tried network marketing believing it's a get rich quick and failed and in turn is angry at the industry itself. Network marketing takes time and effort like anything else. Watch out for those "Pyramid Scheme" experts, most are just MLM haters who hate on Network marketing successes.

PamelaB said...

Thank you for your information. My husband and I were sucked into this business which not only hurt us financially but my husband physically.

Werner Siebert said...

I wonder if you ever have done your homework completely and correct. With the knowledge you assumedly have you can easily prove a pyramid scam by making the calculation. Take the compensation plan and calculate if all what is/or promised to be payed, can be generated by the selling of the product. If that is so you can never speak of a scam, if not you have to press charges. So please if you discredit a system or company come with prove and not with assumptions . I am the first to believe you, but prove it!!! Its as simple as that.
I have been in a mlm company in belgium for 3 years now and no one ever told me its easy, because it isn't. It is no easy money either but everyone has the same possibilities. And if you don't follow the system it doesn't work, that's why it is a system. So please stop commenting and start proving and i will be the first to support you.

Werner Siebert said...

Once again someone who doesn't know how to read or hear. It is clearly mentioned what you have to do and continue to do in case of the bmw bonus. I suppose they read it? Or? I think its about time people take responsibility for their actions in stead of pointing fingers to another.

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