QNet: The “money game” played by MLMs to lure the gullible
QNet, the controversial MLM company is luring executives and professionals by promising a weekly income of Rs27.7 lakh. Do the math… this is about the salary that Mukesh Ambani, one of India's highest paid CEOs earns. Yet, this patently exaggerated claim by QNet is ensnaring people to invest their hard-earned money on the fake promise of an enormous wealth. Meanwhile, the company seems to operating under several different names that are designed to hide a trail to its operations
QNet, the controversial, Hong Kong-based multi-level marketing (MLM) operator with multiple names (GoldQuest, QuestNet, QNet, QI Ltd and QI group are the better known names) and identities seems to be working on a clear plan to hide the trail of its Indian operations. Interestingly, worried investors and bloggers or those burned by the pyramid marketing business are doing an excellent job of tracking its operations and publicising them. Here are some such trails gathered through helpful bloggers like Sherwette Mansour from Egypt (http://joinnetworkmarketing.wordpress.com ).
According to Wikipedia, QNet’s business model has been described as a simple pyramid scheme, where initial entrants to the scheme do make money, but as the number of IRs increase, finding more independent representatives (IRs) becomes harder and harder, until those that join late are unable to recover even their initial outlay and the model collapses. QNet counters this explanation as offering a business opportunity that doesn't have the high cost of start up as a limiting factor. When an IR recommends the product, the customer makes a purchase through QNet’s online system and the IR receives a commission based upon QNet’s compensation plan.
The compensation plan operates by the recruitment of customers by the existing IR. An IR is provided with an ID that gives access to a “Tracking Centre” (TC) in its computer system through which the IR’s sales are tracked. A TC has a left and right customer group. Every customer owns a TC which is then placed on the left or right customer side of the IR’s TC. A ‘direct’ transaction (a customer’s personal reference or sale) is counted as one transaction. An “indirect transaction (someone in the customer’s TC buys/refers/sells) is also counted as one transaction. QNet pays $250 each time three product sales on an IR’s left customer group are matched by three product sales on the right,” says Wikipedia.
According to Mr Mansour, the blogger, if you are being paid for every six new people you recruit, by 13th level down you would exceed the population of Earth. He uses example of his home country Egypt. He says, “By level 11, you will exceed the population of Egypt. So, I am assuming that the business flourish and reaches level 10, which will have 60,466,176 (6.04 crore) people. Let’s assume that all these people will join the business, keeping aside the fact that Egypt is a POOR country and not everyone can pay an average of $1,000 to join the business. By level 9, the last level making profit in the country assuming everyone will join, an average of 60,466,176x$1,000 = $60,466,176,000 ($6,046.6 crore) is sent outside the country for all members in level 9 to make profit. Please do keep in mind that this number of people entering the business is almost impossible because a small percentage of Egyptians can actually afford to pay an average of $1,000 to join the ‘business’.”
To read more about QNet on our wesbite, click here.
Here are the repeat sales points (RSP) and its cash and business volume (BV) equivalents provided by QNet in its FAQs for India...
Image source-QNet FAQs for India
QNet says, its IRs can achieve rankings like Bronze Star, Silver Star, Gold Star, Platinum Star and Diamond Star, depending upon, how much he and his network or down lines sells.
Image source- QInfinite Compensation Plan for India
QNet claims that a Diamond Star can earn up to Rs27,73,800 (Rs27.7 lakh) per week while the same for a Platinum Star would be Rs22,39,050 (Rs22.4 lakh) a week. The money earned by a Diamond Star in QNet is almost the same that Mukesh Ambani of Reliance Industries (RIL), India's richest man as per the Forbes list, earns every week as salary (Mukesh Ambani forgoes Rs23.82 crore from his pay package ). We all have heard about Mr Ambani and his wealth. However, nobody knows how many Diamond or Platinum Stars are there in QNet's MLM network. If you know, then please share it.
In India, QNet’s MLM operations were controlled by QuestNet Enterprises (India) Pvt Ltd, a company registered at Chennai till 13 April 2012. From next day, it shifted all its registered agents, database and business to Vihaan Direct Selling Pvt Ltd, company registered in Bengaluru. Here are the details mentioned in the frequently asked question (FAQ) section on QNet’s site…
Image source-QNet FAQs for India
QuestNet Enterprises was operating QNEI eStore, a platform from where IRs, which is how the investor-dealers of QNet are described, could place orders or buy products and also enrol new recruits. After launching Vihaan, the company asked all its old IRs to mandatorily register under the new business name in order to receive their commissions. It is pertinent to mention that the big crackdown on its operations also occurred in Chennai when QNet operated under the name GoldQuest and sold numismatic coins.
You may also be interested in reading about the many other MLM schemes that Moneylife covers. Click here to read about them.
More in Moneylife
Asset quality of PSBs set to worsen +1116 views
TODAY'S TOP STORIES
Moneylife Foundation: Maharashtra CM Fadnavis says financial literacy empowers citizens
Grab a Discount Coupon here
What's your say?
What you said
Thanks for casting your votes! View Previous Polls