Spring Breeze Twenty Years

Chapter 1311 The Beginning and End of Pyramid Schemes

Xiao Wei said, "Yes, definitely. Are you two doing it together?"

Li Weibing said, "That damned Wang Gang insisted on joining in the fun, saying he wanted to get together with four people."

Xiao Wei laughed and said, "You two are leaving no way for those who give gifts to survive, giving double portions."

Li Weibing laughed and said, "Next Sunday, you'd better come a day earlier, okay? That way you can help out."

Xiaowei said, "Okay, Xiaohui and I are going back to Kyoto tomorrow, so let's come back a day early and go with Miler then."

After hanging up the phone, Xiaowei stretched and yawned, "Oh dear, you're getting married soon. In a few years, the kids will be all over the place."

Chen Hui scratched his head: "This is ridiculous! They only notified us at the last minute, what are we supposed to deliver?"

Xiao Wei scratched his head, then turned to Miler and asked, "What are you giving away?"

Miler thought for a moment and said, "What should we give? Let's give money, how about 50,000 each? That should be about right, right?"

Chen Hui thought for a moment and said, "I feel like giving money isn't a good idea. It's too sensitive."

Miler said, "Then what should we give them? A house? A car? How much would that cost? Would they even dare to accept it?"

Chen Hui looked at Mi Le in surprise: "What kind of brain circuit is this? Fifty thousand yuan isn't good enough, yet you want a car and a house? Why don't you just give me a wife instead?"

Chen Hui thought for a moment and said, "How about the three of us do it together and cover all the beer at their wedding banquet? Okay?"

Miler said, "Beer? When they got married, they probably drank a lot of liquor, mostly because they were soldiers."

Xiao Wei said, "That's why we're including beer."

Miler paused for a moment, then laughed.

Xiao Wei said, "It's settled then. We'll send it to the bar, get it from you, and I'll make up the difference later. Get about a hundred bottles of similar red wine, two bottles per pack, so they can take them as return gifts. It doesn't need to be anything too fancy."

Miler thought for a moment and nodded in agreement. Actually, this gift wasn't cheap; it would cost tens of thousands of yuan, but it was still more respectable than simply giving money.

Several people squeezed into Mile's car, and Mile drove them back to the Xidu headquarters.

The two people don't come often, but the room and office are still kept and regularly cleaned to ensure they are always available.

They went straight to Xiaowei's office, where the two sat on the sofa, and Xiaowei made himself some tea.

Chen Hui watched Xiao Wei pour tea and said, "Now I get a headache just from flying. The thought of having to come back right away makes me anxious. I miss the carefree life I used to live. Those were good times. My office was right outside my door, and I could stay home all the time."

Xiao Wei laughed and said, "Raising pigs, huh? You were born with lofty ambitions, vowing to be a pig for life. It's good to get some exercise, haven't you noticed you've gotten more muscular in the last six months? You've lost some weight, and your belly has shrunk quite a bit."

Chen Hui patted his stomach, picked up his teacup, and said, "What do you think of what Gu Xuefeng said about that? You mean that gemstone pyramid scheme?"

Xiao Wei shook his head: "It's gone wrong, something feels off. Anyway, I don't want to get involved, and I suggest you stay away too."

Pyramid schemes entered China in the 1980s. With the reform and opening up and the recovery of the domestic economy, more and more economic theories and business models entered China, and pyramid schemes were one of them.

Initially, the government had no objection to or prohibition of pyramid schemes or direct selling, which is why they flourished in the mid-1990s. It was precisely this attitude of the government that gave some foreign organizations an opportunity.

Pyramid schemes like Ponzi schemes have now been banned in many countries.

So they set their sights on China, and various small and large organizations entered the country through various means, reaping substantial profits. And that's when things exploded.

By 1995, there were over 13,000 multi-level marketing (MLM) companies in China, but most were regional and had limited influence. The well-known Yangcheng Avon company was the first officially registered MLM company in China, established on November 14, 1990.

Moreover, due to the lack of laws and regulations, pyramid schemes have infiltrated all levels of society. Farmers stop farming, workers stop going to work, teachers stop teaching, and students stop going to school; they all go to pyramid schemes to make big money.

The most outrageous cases involve local officials or their family members who use their positions and power to cultivate a network of contacts, achieving almost anything. One provincial official's six-month income of 14 million yuan became the talk of the town.

By 95, pyramid schemes were rampant in the country and had become distorted.

All pyramid scheme products are touted as high-tech or miracle drugs. A regular glass cup with the word "nano" on it sells for 3,000 yuan, and a regular rocking machine sells for 13,800 yuan.

The root cause lies in the fact that none of these practitioners pay taxes. This highly profitable industry, spanning the entire country, involves over 13,000 companies (the number of unregistered entities is countless), with participants numbering well over 100 million.

Pyramid schemes began to degenerate into scams, with large numbers of people from all over the country entering the industry in groups. These scams included kidnapping, control of personal freedom, forced purchases, and deception, which completely changed the fate of pyramid schemes.

No matter the industry, there will always be some people who will try every means to gain something for nothing. There are far too many cases where a single rotten fish ruins the whole pot of soup.

Then in 98, the government finally cracked down on it: banning all pyramid schemes. A booming industry was brought to an end.

All pyramid schemes are illegal. Many companies are playing word games: the government cracks down on illegal pyramid schemes, so if there's something illegal, there's something legal, and we're legal. There are no legal pyramid schemes.

What's legal is direct selling, which aims to sell real products rather than recruiting people, such as Amway, Avon, and later Perfect, etc. They pay taxes.

……

Chen Hui shook his head: "I'm not interested. I have enough to do now, and I don't even have time to spend with my wife and son. Why would I want to do that? It's just that I feel this is actually a pretty good sales model."

Xiao Wei said, "It depends on the product. We don't have anything suitable. It has to be fast-moving consumer goods, health products or medical devices, or jewelry. Are you going to do a cake pyramid scheme? Or some kind of loud animal feed?"

Chen Hui grinned: "I'm still quite optimistic about this model. We'll talk about it later; we don't have time for that now. Why don't we have any suitable products? Furniture won't do, will it? If we sell directly to buyers without going through department stores, we can definitely get a discount, right?"

The price of solid wood furniture is rising steadily, mainly because the cost of timber is increasing year by year, as are the costs of sales channels, such as warehousing, retail, transportation, and handling. If these costs were eliminated, a significant amount could be cut.

Xiao Wei shook his head: "It's unlikely. It's too big; it'll be troublesome no matter how you handle it. Unless we can produce it locally."

Chen Hui said, "Absolutely! Where can't you buy timber? Just open a factory. Old Xu would definitely be happy to."

(End of this chapter)