Hi Didi,
The system in place for most agencies is NOT a pyramid scheme.
A pyramid scheme works by having downline people to pay to join the scheme. The payment received is used to pay the upline. In order for it to work, the scheme needs constant recruitment of downline people to pay the upline.
For property agencies, there are terms such as upline and downline being used. However, downline agents do not pay to join the agency. When they join, they need to pay for courses, printing of namecards and nametag, which amounts to only several hundred dollars. The upline does not receive any money for recruitment of new downline agents.
The system works by when the downline agents close sales. When they close sales, the upline gets a small cut of the deal, which is usually 1-2% of the deal.
That is why the system in agencies is not a pyramid scheme. A pyramid scheme works when there is more and more recruitment, and paying to join. Whereas the system in agencies work by having the agents close sales.
This motivates the upline to guide and assist the downline to be knowledgeable, equipped and capable to close sales. Therefore, the downline agents benefit from such a system. They will receive assistance from their upline. If the downline agents do not make money, the upline do not get paid.
You are right to say that the boss does not have to work, and can live on the earnings on his downline. This is the dream of all serious agents - to build up his team and lead them so that they close many sales. It is especially vital as the team head gets older over the years and doing sales may be tiring for him.
However, it is not as easy as it is made out to be. Everyone is imaging the team head relaxing on his yacht somewhere while his team is frantically doing sales to feed his lifestyle. This is NOT TRUE. The team head has to work as hard as his downline, providing training to his team, brainstorming new strategies for his team, solving problems within his team, encouraging and motivating his team. And if he screws up just once, everyone of his downline can just leave him in a moment. His years of hard work can disappear in a moment.
So Didi, nothing comes free, especially in the property line. Everyone works hard, that is our livelihood. There are no pyramid schemes in this line, and I'm not sure how you came to the conclusion that there are pyramid schemes here. I hope you did not arrive at your judgement based on hearsay and gossip, without verifying the facts.
Thanks!
Regards,
Richard Wan
Black Diamond Real Estate Group
richardwan@live.com
94363793
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