xtroublex
September 15th, 2003, 10:38 PM
What I am about to tell you is absolutely true! The reason I know it’s true is because I was a site owner who participated in all of it. I have since closed my site and refunded my customers partly due to sales slowing to a stand still and mostly due to GUILT. Let me start from the beginning.
I have always been big on trying to make some extra money on the internet. I have read just about every book, report, website, seminar, you name it and I’ve most likely bought it or read it or both. I had not had very much success. I made a few dollars here and there but never enough to brag about.
One day I was checking “Ebay” for business opportunities when I came across an auction that said for $1.99 they would send me a link to a website where I could purchase a 42” plasma TV for $100.00! Being somewhat experienced in these types of things I did hesitate but I figured what the heck, it’s only $1.99 to satisfy my curiosity. Needless to say I bought the link and was sent to a website that shall remain nameless for legal reasons. We’ll call them “simplestuff.com” for a frame of reference.
“simplestuff.com” began to explain to me that if I bought their e-book package for only $100, they would add me to a list of people, and each time that 50 new people bought that same e-book package the person at the top of the list would receive a brand new 42” plasma TV!
Well, alarms started going off in my head screaming “SCAM, RIP-OFF, RUN” but I decided to investigate further. I read that not only could I get a plasma tv, but they were offering all sorts of other goodies as well! Like I could get an XBOX game console for $50 or a laptop computer!
As I was reading I started to realize that this was nothing more than a spin on the old pyramid scheme of the past. The only differences were they were offering a product, and they were giving away prizes instead of cash. The more I read the more intreaged I was with the fact that someone was actually making money doing this. My next stop was the “Frequently Asked Questions” section of “simplestuff.com”. I thought most of the questions that were speeding through my head would most likely be here.
The first thing that jumped out at me while I was scanning through the list of questions was “Is this legal?”. That was my most burning question so I clicked on it. The answer I received was incredible! Here it is word for word:
Yes! An example of an illegal matrix would be one where there is no product immediately sold. Since we are selling you a product our e-books), there is nothing illegal about it. The matrix entry is our free gift to you when you purchase our e-books.
Now I was starting to see a pattern here. If you sell a product, you are disguising the fact that this is a pyramid scheme, or at least giving yourself an out if anyone complains. I decided to check out some of these so called lists to see how popular this type of this was. I started with the plasma tv list. To my amazement the list was HUGE! There were even people who’s names were listed up to 10 times! I copied the list into a spread sheet program so I could see the actual number of names on the list. Once again I was amazed. There were over 1500 names on that list!
At this point I was almost ready to sign up myself! I thought that if 1500 people were in on this thing, somebody must be getting the plasma, but once again my brain told me “This is still nothing more than a pyramid scheme!” so I checked some other lists to see if they were the same. Guess what? THEY WERE! Some didn’t have quite so many and others had MORE! I returned to the plasma tv list and much to my surprise, there had been 3 people sign up within a matter of 6 or 7 minutes!
I began just sitting on that page and hitting my “refresh” button every 5 minutes or so and I could actually watch the list get bigger! At that point I called my friend and business partner Dan. I explained the whole thing and what I had seen. I asked him if he wanted to go in with me to buy a spot on the list. (notice we had no idea at this point how many people it would require for us to cycle and get our prize) After going through the answers to all of his questions and hearing the same sceptisism I had when I first got to the page, he reluctantly agreed.
I happily pulled out my credit card and joyfully charged $200 for 2 positions on the plasma TV list. After a the transaction went through, I went back to the site to do a little math. I wanted to see how much money was actually floating around on that site. I copied each list one by one along with it’s “e-book price” into a spread sheet and calculated the dollar amount….
$323,568.00
I’ll tell you, and please forgive me for being blunt, but I almost wet myself! This site had only been operating for a little over 11 months and they had banked more than $300,000! Needless to say, I wanted to get in on this but at this point I thought that maintaining the lists and keeping track of who was supposed to get what and when was above my technical ability. So I sat back and waited to see if the positions that I bought would payoff.
After a few days I noticed that 50 people had signed up after my position. I thought that at that point I would get my TV. That’s when I got the rude awakening. I sent an email to “simplestuff.com” and asked how this works because I thought I should have received a notice that my TV was on the way. That’s when they gave me the following formula:
Take the position number that you are in (Which was 1538) and multiply that by 50 and that’s how many people need to be on the list in order for you to get your prize.
For those of you who don’t have a calculator handy, 76,900 people would have to be on that list before we would get our TV! I was flabbergasted as that number was rediculas! It would take years even at the rate of sign ups I was seeing at the time to actually get my TV. I went through all of the familiar emotions. First you get angry, “How can they be ripping people off like that?” then you feel stupid, “I should have listened to my intuition and known better!” then you get that kind of sick feeling in the pit of your stomach like someone just kicked you and you think to yourself, “Kiss that $200 goodbye!”
I continued to visit the site because after all, I had money invested, and I continued to see new people signing up. Some of them doing it multiple times! I kept asking myself, “What is it that’s making them keep spending money when there is almost no chance of getting what you are really paying for?” I guess I chalked it up to the old saying “there’s one born every minute..” (and I was one of them) and decided to try to find a way to recoup some of my losses. I noticed that the site was offering advertising oppoerunities so I inquired as to how I might participate. After all, this was a high traffic site and maybe I could take advantage of that with some of my biz op sites.
The next day I received an email from the owner of “simplestuff.com” asking me to call him to discuss the advertising. I made the call and explained the types of sites that I had and much to my surprise he explained to me that he didn’t think it would bennifit me to advertise on his site. He explained that it would be easy to just take anybodies money and throw up a link but that’s not what he was about. He didn’t want to cheat anyone if there was no benefit in it for them. He was very polite and sounded very professional. I have to say I was very impressed because if it would have been me, profit is profit.
This somewhat changed my opinion of the website and the people operating it. I thought “if he’s not even willing to make money from me, simply because I wouldn’t benefit from it, how bad could they be?” I decided to take a chance at that point. I sat down and typed out an email explaining that I would like to start my own site and possibly partner with him and cut him a percentage. After all, even if I was only half as successful, that’s $150,000! I sent the email to the owner who I spoke with, (We’ll call him Jeff) and eagerly waited for a response.
The response came a few days later. He explained to me that he had recently agreed to set up a couple of his friends in the business and he would be willing to do the same for me. He had a standard contract that he used and that all I had to do was sign it and send it back. He said he would also assist me in promoting and walk me through setting up and running the site. I could not believe it! I saw dollar signs and little cash register bells were going off all around me! The contract was attached to the email and I quickly opened it. All he was asking for was 1% of each transaction. This led me to believe that he knew exactly the potential of these types of sites and that he would still make a good profit from my site!
The next day I called “Jeff” and expressed my gratitude at him taking me under his wing. I asked him how long after he received the contract would it be before he would start promoting my site. He told me I could be up and running by Friday (it was Monday). That same day I signed the contract (even had it notarized) and overnighted it back to him. I then waited with anticipation.
Tuesday came and went and I didn’t hear anything. I thought “hey, he’s a busy guy!” and left it at that. Wednesday came and still no word, I called him up just to verify he had received the package. He said he had been out of the office the day before and had just received it this morning. He said he had some thing to do as the credit card processor he was using had frozen his accounts and he needed to take care of that imeadiatly. I told him I understood completely.
Thursday came and went. Friday came and went. The weekend came and went and still no word. On that following Monday I decided to call to get a status report. There was no answer so I left a voicemail explaining that I was just checking to see how things were going and to please call me back as I was eager to get started.
Tuesday came and went. Wednesday came and went. Still no word. Thursday I called and left another message voicing my concern as I hadn’t heard back and once again asking for a call. Friday, Saturday, Sunday, Monday, Tuesday, still nothing. I kept thinking “Your not paying anything, so you can’t really complain.” I called and left another message.
On Thursday of that week I received a call from “Jeff”. He stated that he had to fly out to the location of the credit card processor to handle the problem that he had told me about earlier. I told him I understood and asked when would we be able to start with my site. He said he would review it and email me.
I received an email the next day with some suggestions on changing the verbage for legal purposes and as soon as I did that we would be ready to go. I made the changes and launched the site.
I started doing some promotions utilizing some free stuff such as free classifieds and newsgroups but was not receiving much of a response. I then emailed my good friend “Jeff” to ask about when he would start promoting my site. I received no imeadiate response (3 days) so I joined a couple message boards that were specific to matrix sites.
I noticed that they had sections where you could post announcements and ads so I posted there for my new site. It was a matter of minutes (literally) and traffic started hitting my site. In my first hour after launch I had received $2000 in sales! I could not believe it! No other business had ever been that responsive! I figured if I could get that kind of response from a message board, “Jeff” must have some really good places for me!
In the mean time I started reading some of the posts on the board and started to discover that the guy that I was partners with, was not what I had thought at all. I was reading all kinds of complaints. Some about the lists not being reported correctly, some about the lists not being updated, some about not receiving the merchandise and on and on. I was now into my 3rd week since I made that first phone call to “Jeff” and I decided to give him one last opportunity to live up to his end of the bargain. I went to his website “simplestuff.com” and what do I see, a link to someone elses website on the home page! Not only was I insulted, I was PISSED OFF! Here we were supposed to be business partners and he is placing someone elses website link on his homepage instead of promoting mine as agreed.
I sent off a rather heated email explaining my concerns and asking him to explain his actions. He answered with some excuse about his email list being lost so he could not send out the advertisements he had promised. He NEVER responded to the fact of having another link on his site and not even including mine.
At that point I decided that I had been screwed twice by “simplestuff.com” and I would have to support myself in this effort. I began promoting more and opening new lists. I gained some wholesale contacts which allowed me to be cheaper and/or have smaller lists. I was raking in about $4000 per month and was on track for a $6000 month! Then I read a post from a guy who had supported matrix sites all along the way. He had found out the reality of matrix sites. He stated that only 2% of any names on any list will ever receive what they signed up for. He said he now realized that there were a lot of people being cheated because they were not given all of the facts. He even went as far as saying he had received many things including cash from a lot of these sites only because he managed to be one of the first 5 or 10 people to sign up. He apologized for misleading people and stated he would not participate anymore.
The only thing I could think about at that point was “He’s killing the business!” Sure enough, sales started to decrease. Then it happened. My friend “Jeff” announced that his site would be frozen for awhile due to his payment processor freezing his funds. A flood of posts in the message boards with panicked customers. Not to mention 5 to 6 new matrix sites a day popping up. Some just taking peoples money and then disappearing. An article popped up stating that matrix sites were nothing more than pyramid schemes (sounds familiar) they even interviewed my friend “Jeff” because he had the biggest and one of the first sites out there.
Mixed opinions were flying around all over the place. I started rethinking what I was doing and whether or not I should continue, but the draw of easy money is a hard habit to kick, so I continued. Suddenly, third party credit card proccessors were freezeing accounts left and right. Matrix sites were closing but for every one that closed about 6 more would open. PayPal was the first to freeze accounts. Then Paysystems, others would just randomly hold accounts for some and not others. StormPay, one of the payment proccessors I used in the beginning froze my account, then refused to answer emails or even give me a reason why the froze it. Since they were based in the West Indies, I had no recourse.
I signed up with a company called Ginix who was based in California. I thought they would be good as they were based in the US. They started to do funny things as well. Every month they would come up with a new reason why they could not give me my money! They would chargeback some customers and email me to refund others. They would usually email me after they made sure they chargedback enough to be able to hold my funds for another month. I was spending all my time fighting battles that could not be won and my site suffered for it. I was no longer making any sales because I was too busy protecting my current funds.
Well, at this point I started doing some research and here are the stats:
Only 2% of the people in ANY list type program ever receive what they are promised.
The only difference between a "Ponzi Scheme" and a matrix site is matrix sites sell a "product".
The products you purchase, NEVER are worth what you pay for them.
More than HALF of new matrix sites NEVER INTEND ON STAYING IN BUSINESS!
ALL matrix sites are detined to fail no matter how fast they grow their lists.
REMEMBER MY EXAMPLE:
The first time I signed up for a matrix site I was in position 1538 which meant 76,900 people would have to be on the list to get my "prize"
Needless to say, I closed my site. Before I had an opportunity to start refunding anyone, Ginix suspended my account.
My Advise?
If you are thinking of buying into a matrix site DON'T! You WILL be ripped off in the long run GUARANTEED!
If you are thinking about opening a matrix site DON'T! All legal arguments aside, you will only be hurting the people who are your customers as you can NEVER live up to the promises you make over the long haul.
Good luck to everyone and I hope you find what you all are looking for!
WildCardz
I have always been big on trying to make some extra money on the internet. I have read just about every book, report, website, seminar, you name it and I’ve most likely bought it or read it or both. I had not had very much success. I made a few dollars here and there but never enough to brag about.
One day I was checking “Ebay” for business opportunities when I came across an auction that said for $1.99 they would send me a link to a website where I could purchase a 42” plasma TV for $100.00! Being somewhat experienced in these types of things I did hesitate but I figured what the heck, it’s only $1.99 to satisfy my curiosity. Needless to say I bought the link and was sent to a website that shall remain nameless for legal reasons. We’ll call them “simplestuff.com” for a frame of reference.
“simplestuff.com” began to explain to me that if I bought their e-book package for only $100, they would add me to a list of people, and each time that 50 new people bought that same e-book package the person at the top of the list would receive a brand new 42” plasma TV!
Well, alarms started going off in my head screaming “SCAM, RIP-OFF, RUN” but I decided to investigate further. I read that not only could I get a plasma tv, but they were offering all sorts of other goodies as well! Like I could get an XBOX game console for $50 or a laptop computer!
As I was reading I started to realize that this was nothing more than a spin on the old pyramid scheme of the past. The only differences were they were offering a product, and they were giving away prizes instead of cash. The more I read the more intreaged I was with the fact that someone was actually making money doing this. My next stop was the “Frequently Asked Questions” section of “simplestuff.com”. I thought most of the questions that were speeding through my head would most likely be here.
The first thing that jumped out at me while I was scanning through the list of questions was “Is this legal?”. That was my most burning question so I clicked on it. The answer I received was incredible! Here it is word for word:
Yes! An example of an illegal matrix would be one where there is no product immediately sold. Since we are selling you a product our e-books), there is nothing illegal about it. The matrix entry is our free gift to you when you purchase our e-books.
Now I was starting to see a pattern here. If you sell a product, you are disguising the fact that this is a pyramid scheme, or at least giving yourself an out if anyone complains. I decided to check out some of these so called lists to see how popular this type of this was. I started with the plasma tv list. To my amazement the list was HUGE! There were even people who’s names were listed up to 10 times! I copied the list into a spread sheet program so I could see the actual number of names on the list. Once again I was amazed. There were over 1500 names on that list!
At this point I was almost ready to sign up myself! I thought that if 1500 people were in on this thing, somebody must be getting the plasma, but once again my brain told me “This is still nothing more than a pyramid scheme!” so I checked some other lists to see if they were the same. Guess what? THEY WERE! Some didn’t have quite so many and others had MORE! I returned to the plasma tv list and much to my surprise, there had been 3 people sign up within a matter of 6 or 7 minutes!
I began just sitting on that page and hitting my “refresh” button every 5 minutes or so and I could actually watch the list get bigger! At that point I called my friend and business partner Dan. I explained the whole thing and what I had seen. I asked him if he wanted to go in with me to buy a spot on the list. (notice we had no idea at this point how many people it would require for us to cycle and get our prize) After going through the answers to all of his questions and hearing the same sceptisism I had when I first got to the page, he reluctantly agreed.
I happily pulled out my credit card and joyfully charged $200 for 2 positions on the plasma TV list. After a the transaction went through, I went back to the site to do a little math. I wanted to see how much money was actually floating around on that site. I copied each list one by one along with it’s “e-book price” into a spread sheet and calculated the dollar amount….
$323,568.00
I’ll tell you, and please forgive me for being blunt, but I almost wet myself! This site had only been operating for a little over 11 months and they had banked more than $300,000! Needless to say, I wanted to get in on this but at this point I thought that maintaining the lists and keeping track of who was supposed to get what and when was above my technical ability. So I sat back and waited to see if the positions that I bought would payoff.
After a few days I noticed that 50 people had signed up after my position. I thought that at that point I would get my TV. That’s when I got the rude awakening. I sent an email to “simplestuff.com” and asked how this works because I thought I should have received a notice that my TV was on the way. That’s when they gave me the following formula:
Take the position number that you are in (Which was 1538) and multiply that by 50 and that’s how many people need to be on the list in order for you to get your prize.
For those of you who don’t have a calculator handy, 76,900 people would have to be on that list before we would get our TV! I was flabbergasted as that number was rediculas! It would take years even at the rate of sign ups I was seeing at the time to actually get my TV. I went through all of the familiar emotions. First you get angry, “How can they be ripping people off like that?” then you feel stupid, “I should have listened to my intuition and known better!” then you get that kind of sick feeling in the pit of your stomach like someone just kicked you and you think to yourself, “Kiss that $200 goodbye!”
I continued to visit the site because after all, I had money invested, and I continued to see new people signing up. Some of them doing it multiple times! I kept asking myself, “What is it that’s making them keep spending money when there is almost no chance of getting what you are really paying for?” I guess I chalked it up to the old saying “there’s one born every minute..” (and I was one of them) and decided to try to find a way to recoup some of my losses. I noticed that the site was offering advertising oppoerunities so I inquired as to how I might participate. After all, this was a high traffic site and maybe I could take advantage of that with some of my biz op sites.
The next day I received an email from the owner of “simplestuff.com” asking me to call him to discuss the advertising. I made the call and explained the types of sites that I had and much to my surprise he explained to me that he didn’t think it would bennifit me to advertise on his site. He explained that it would be easy to just take anybodies money and throw up a link but that’s not what he was about. He didn’t want to cheat anyone if there was no benefit in it for them. He was very polite and sounded very professional. I have to say I was very impressed because if it would have been me, profit is profit.
This somewhat changed my opinion of the website and the people operating it. I thought “if he’s not even willing to make money from me, simply because I wouldn’t benefit from it, how bad could they be?” I decided to take a chance at that point. I sat down and typed out an email explaining that I would like to start my own site and possibly partner with him and cut him a percentage. After all, even if I was only half as successful, that’s $150,000! I sent the email to the owner who I spoke with, (We’ll call him Jeff) and eagerly waited for a response.
The response came a few days later. He explained to me that he had recently agreed to set up a couple of his friends in the business and he would be willing to do the same for me. He had a standard contract that he used and that all I had to do was sign it and send it back. He said he would also assist me in promoting and walk me through setting up and running the site. I could not believe it! I saw dollar signs and little cash register bells were going off all around me! The contract was attached to the email and I quickly opened it. All he was asking for was 1% of each transaction. This led me to believe that he knew exactly the potential of these types of sites and that he would still make a good profit from my site!
The next day I called “Jeff” and expressed my gratitude at him taking me under his wing. I asked him how long after he received the contract would it be before he would start promoting my site. He told me I could be up and running by Friday (it was Monday). That same day I signed the contract (even had it notarized) and overnighted it back to him. I then waited with anticipation.
Tuesday came and went and I didn’t hear anything. I thought “hey, he’s a busy guy!” and left it at that. Wednesday came and still no word, I called him up just to verify he had received the package. He said he had been out of the office the day before and had just received it this morning. He said he had some thing to do as the credit card processor he was using had frozen his accounts and he needed to take care of that imeadiatly. I told him I understood completely.
Thursday came and went. Friday came and went. The weekend came and went and still no word. On that following Monday I decided to call to get a status report. There was no answer so I left a voicemail explaining that I was just checking to see how things were going and to please call me back as I was eager to get started.
Tuesday came and went. Wednesday came and went. Still no word. Thursday I called and left another message voicing my concern as I hadn’t heard back and once again asking for a call. Friday, Saturday, Sunday, Monday, Tuesday, still nothing. I kept thinking “Your not paying anything, so you can’t really complain.” I called and left another message.
On Thursday of that week I received a call from “Jeff”. He stated that he had to fly out to the location of the credit card processor to handle the problem that he had told me about earlier. I told him I understood and asked when would we be able to start with my site. He said he would review it and email me.
I received an email the next day with some suggestions on changing the verbage for legal purposes and as soon as I did that we would be ready to go. I made the changes and launched the site.
I started doing some promotions utilizing some free stuff such as free classifieds and newsgroups but was not receiving much of a response. I then emailed my good friend “Jeff” to ask about when he would start promoting my site. I received no imeadiate response (3 days) so I joined a couple message boards that were specific to matrix sites.
I noticed that they had sections where you could post announcements and ads so I posted there for my new site. It was a matter of minutes (literally) and traffic started hitting my site. In my first hour after launch I had received $2000 in sales! I could not believe it! No other business had ever been that responsive! I figured if I could get that kind of response from a message board, “Jeff” must have some really good places for me!
In the mean time I started reading some of the posts on the board and started to discover that the guy that I was partners with, was not what I had thought at all. I was reading all kinds of complaints. Some about the lists not being reported correctly, some about the lists not being updated, some about not receiving the merchandise and on and on. I was now into my 3rd week since I made that first phone call to “Jeff” and I decided to give him one last opportunity to live up to his end of the bargain. I went to his website “simplestuff.com” and what do I see, a link to someone elses website on the home page! Not only was I insulted, I was PISSED OFF! Here we were supposed to be business partners and he is placing someone elses website link on his homepage instead of promoting mine as agreed.
I sent off a rather heated email explaining my concerns and asking him to explain his actions. He answered with some excuse about his email list being lost so he could not send out the advertisements he had promised. He NEVER responded to the fact of having another link on his site and not even including mine.
At that point I decided that I had been screwed twice by “simplestuff.com” and I would have to support myself in this effort. I began promoting more and opening new lists. I gained some wholesale contacts which allowed me to be cheaper and/or have smaller lists. I was raking in about $4000 per month and was on track for a $6000 month! Then I read a post from a guy who had supported matrix sites all along the way. He had found out the reality of matrix sites. He stated that only 2% of any names on any list will ever receive what they signed up for. He said he now realized that there were a lot of people being cheated because they were not given all of the facts. He even went as far as saying he had received many things including cash from a lot of these sites only because he managed to be one of the first 5 or 10 people to sign up. He apologized for misleading people and stated he would not participate anymore.
The only thing I could think about at that point was “He’s killing the business!” Sure enough, sales started to decrease. Then it happened. My friend “Jeff” announced that his site would be frozen for awhile due to his payment processor freezing his funds. A flood of posts in the message boards with panicked customers. Not to mention 5 to 6 new matrix sites a day popping up. Some just taking peoples money and then disappearing. An article popped up stating that matrix sites were nothing more than pyramid schemes (sounds familiar) they even interviewed my friend “Jeff” because he had the biggest and one of the first sites out there.
Mixed opinions were flying around all over the place. I started rethinking what I was doing and whether or not I should continue, but the draw of easy money is a hard habit to kick, so I continued. Suddenly, third party credit card proccessors were freezeing accounts left and right. Matrix sites were closing but for every one that closed about 6 more would open. PayPal was the first to freeze accounts. Then Paysystems, others would just randomly hold accounts for some and not others. StormPay, one of the payment proccessors I used in the beginning froze my account, then refused to answer emails or even give me a reason why the froze it. Since they were based in the West Indies, I had no recourse.
I signed up with a company called Ginix who was based in California. I thought they would be good as they were based in the US. They started to do funny things as well. Every month they would come up with a new reason why they could not give me my money! They would chargeback some customers and email me to refund others. They would usually email me after they made sure they chargedback enough to be able to hold my funds for another month. I was spending all my time fighting battles that could not be won and my site suffered for it. I was no longer making any sales because I was too busy protecting my current funds.
Well, at this point I started doing some research and here are the stats:
Only 2% of the people in ANY list type program ever receive what they are promised.
The only difference between a "Ponzi Scheme" and a matrix site is matrix sites sell a "product".
The products you purchase, NEVER are worth what you pay for them.
More than HALF of new matrix sites NEVER INTEND ON STAYING IN BUSINESS!
ALL matrix sites are detined to fail no matter how fast they grow their lists.
REMEMBER MY EXAMPLE:
The first time I signed up for a matrix site I was in position 1538 which meant 76,900 people would have to be on the list to get my "prize"
Needless to say, I closed my site. Before I had an opportunity to start refunding anyone, Ginix suspended my account.
My Advise?
If you are thinking of buying into a matrix site DON'T! You WILL be ripped off in the long run GUARANTEED!
If you are thinking about opening a matrix site DON'T! All legal arguments aside, you will only be hurting the people who are your customers as you can NEVER live up to the promises you make over the long haul.
Good luck to everyone and I hope you find what you all are looking for!
WildCardz