Late at night on December 28, 2021, according to well-known media reports, the company actually controlled by Lin Ruiyang and Zhang Ting was investigated and punished on suspicion of pyramid schemes! This time it was officially stamped. The Shijiazhuang Market Supervision and Administration Bureau revealed the fact that Dalwei, the operating company of the brand name "TST Court Secret", was suspected of pyramid schemes in the form of a verification letter. The case is still under further investigation.
As early as June 2021, Zhang Tinglin Ruiyang’s company was investigated for suspected pyramid schemes. Moreover, according to official disclosures, Zhang Ting and his wife tried to transfer or hide pyramid scheme funds during the investigation. After being discovered by the authorities, the Market Supervision Bureau also took corresponding preservation measures and froze the funds of the Zhang Ting and his wife’s company twice, with a total amount of up to 6 billion. What is the business model of "TST Court Secret"?
TST’s business model is not disguised. It is open to the public. After digging around, I found that it is different from the models I have come across that are characterized as “pyramid schemes”, but they seem to be essentially the same. According to the TST official website:
1. The agency model does not require stocking, and there is "zero" investment cost;
2. Strict price control system, unified price across the country;
3. The only official channel to get goods, eliminating fakes;
4. Free sales model, you can place an order with your mobile phone in hand.
However, after carefully analyzing its business model and comparing it with the "Prohibition of Transmission Regulations", the above-mentioned so-called micro-business model cannot withstand scrutiny. Let's not discuss the previous two categories of gold and silver cards. System, take a look at the "TST New Bonus" just launched in September 2018:
It divides all agents into gold card and small gold card agents. The salary of the small gold card (i.e. F level) consists of two parts: if the performance is below 2500, the personal sales commission is 15;
In addition, there is the so-called self-media promotion award, which requires your team to The performance is below 2,500, but your personal sales reach 600, the total performance of the direct agents you develop is more than 1,000, and you also have a self-media promotion award that is 3% of your total performance. The gold card requires a monthly performance of 2,500 yuan. Gold card members are divided into levels A-E. The commission ratio for each level also increases step by step according to the team's performance. Not only that, you can also get the so-called batch and retail difference bonus.
TST’s main bonus system is as follows:
Experts explain Zhang Ting’s business model in detail: Micro-business cannot withstand scrutiny and is actually suspected of pyramid schemes!
There must be some advice from an expert. This business model repeatedly emphasizes that your bonus is only related to the bonus of the direct agent you develop, and has no connection with the downline of the downline. In this way, It seems that the third-level crime of organizing and leading pyramid schemes cannot be formed, and there are only two levels.
In the original business model, small gold cards were called silver cards and required sales of at least 300 yuan. This is no longer the case. Some people may have accused TST of having a threshold fee. If there was a threshold fee, Income entry fee that qualifies as a pyramid scheme crime.
In the original business model, there is also the so-called team education bonus. Team education bonus = knowing the agent’s comprehensive team performance * commission ratio, your personal sales performance must reach 2,500 yuan. Secondly, you have a third-generation agent, and he has also produced performance, second-generation and third-generation performance When the sum reaches 5000, 1.5 is extracted; when it reaches 10000, 3 is extracted.
However, it is easy to judge that the bonuses containing third-level components no longer exist in the new model, which shows that TST has been committed to avoiding the risk of pyramid schemes. Not only that, TST has been paying taxes legally and compliantly, which is indeed much better than many MLM companies. Team-based MLM is still established
Why is TST so popular? From a market perspective, in addition to its products and star effect, it has something to do with its business model.
In accordance with the provisions of Article 7, Item 3 of the "Regulations on Prohibition of Communication", the organizer or leader of a pyramid scheme activity requires the person being developed by the pyramid scheme activity to develop other personnel to join, through the development personnel, to form an upline and downline relationship. , and calculate and pay upline remuneration based on the sales performance of the downline, which is a "team compensation" MLM activity.
Therefore, even if TST strives to avoid the three-level structure and circumvents the "income gate fee" MLM crime crackdown type by canceling the 300 yuan, the team-based MLM activities can still be recognized.
As a business operation without store transactions, MLM should inherently be represented by a multi-level sales model such as team remuneration. This model has inherent advantages in achieving marketing effects. Assume that the company can train 3 agents every month, and each agent can sell 20 items, then the company's monthly operating volume is 3*20=60 items;
For the same company, if Using team remuneration as the power source, agents can recommend two agents, and the trained agents can also train two agents again. Even if the agent's own consumption is not calculated, the company's monthly sales volume may reach 3*2*2*20=240 pieces. From this comparison, we can clearly see the vitality of team compensation.
In team-based MLM, personal income is closely related to team performance, which will inevitably inspire team leaders to help downline salespeople obtain better sales and develop new people, helping the company obtain higher economic benefits. The more advanced team-based MLM incorporates the principles of multiplication, interpersonal science, and network science. During the product sales process, the interpersonal chain of the "own-person effect" is used to build a radial network that multiplies geometrically.
Furthermore, although this business model claims zero cost investment, in order to become a high-level agent, in addition to your own limited sales, I am afraid that you must continue to develop people, because these people also have basic skills. Performance requirements, in order to maximize the team's sales performance, this is naturally suspected of pulling people's heads.
Furthermore, according to common sense, does everyone who joins really understand cosmetics? Do you really have the ability to sell? Is it too casual to grant agents qualifications based solely on the products they purchase? In this way, I am qualified as an agent. Is it suspected of being a pyramid scheme? My opinion on this matter
From the perspective of professionals, Zhang Ting and Lin Ruiyang are not very innovative. In economically developed areas, there are tens of thousands of companies that use team compensation as their business model. In today's market economy where competition is so fierce, many companies simply cannot make a profit without using this business model.
Through this, I have been promoting the clarification and leniency of current laws and judicial interpretations on pyramid schemes and pyramid schemes through writing articles. I hope that legislators and drafters of judicial interpretations can standardize team remuneration. , decriminalization, rather than demonization and criminalization. At the same time, I hope that while cracking down on pyramid schemes, I will give many entrepreneurs a way out, protect corporate property rights, safeguard the rights and interests of entrepreneurs, and recognize the contribution of team-based companies in solving employment problems and promoting economic prosperity.