The QNET Scam and 2 Questions that haunt me

The QNET Scam and 2 Questions that haunt me

On 30th August, 2013, I asked this question via this Quora post

What is the Business Model of QNet?

In the past few months, I have come across many people who are engaging in this business called ‘QNet’.

At first I brushed it aside, thinking it to be one of those Amway kind of ‘pester marketing networks’, but the noise didn’t go away.

Recently, I was contacted by an ‘agent’ of QNet via Linkedin who had not researched my profile. I indulged her to ‘reveal’ what the business was all about. She asked me to come to some mall in Malad (suburb of Mumbai) for a ‘meeting’ which I politely refused. Then some ‘Senior’ from QNet from Ahmedabad was visiting Mumbai and wanted to meet me. I was again asked for a ‘meeting’ in Dadar (Central Mumbai). I refused and simply said, “Why don’t you guys come and meet me in my office?” That DID NOT SUIT THEM. Finally we agreed to a telecon. On the call, the ‘Senior’ said “QNet is in London, Paris, etc etc….” I cut him in the middle and asked him, “Do I have to pay to get involved?” He did not like the question and in the end said, “You aren’t the right profile for us…”

I FOUND THE WHOLE CONVERSATION SCAMMY. The ‘Lady’ sent me a rude message later saying, “You should have told me who you were…” ???? 

Last week, I met another person who seemed almost brainwashed by QNet and that incident prompted me to post the following 10 questions for QNet. Note that I have ALSO provided example ANSWERS so that there is no confusion in what to expect as a reply:

Q1. WHAT is the Business of QNet 

Example Question – What is the Business of Jet Airways?
Answer – The business of Jet Airways is to transport people using Airplanes.

2. What is the GREATNESS in products that QNet sells?

Take a look at http://www.qnet.net/en/products/

(Example Question What is the Greatness of the products Apple Inc sells?

Answer to example: iPhone is one of the best mobile phones in the world, and that has been proven by its global sales volumes

3. Who makes these products that QNet sells and what is the relationship of QNet the Company and the manufacturers?

Is it Vendor – Principal, Self Manufactured or a combination of both? (Question is to understand the cost structure of QNet)

4. What margins are possible to be earned on such products? Answer with world examples of similar industries and quote some publicly available data.

(Example Answer – See – http://biz.yahoo.com/p/sum_qpmd…. )

5. How can these margins be remunerative by sharing across multiple levels of people?

If margins are finite, how can sharing be infinite? (It is possible mathematically but if I divide say US$ 19 commission between say 390,000 people, each person gets a ridiculously meaningless share).

6. Why cant QNet sell its great products (with its great margins like Walmart) and become the biggest retailer in the world?

7. If the Business Model of QNet is to empower people, make them rich and free them so that they can pursue their hobbies, why can’t QNet FIRST become a Fortune 500 Company (like Walmart) and then OPEN A WORLD CLASS COLLEGE like Harvard that educates people for FREE and liberates people so that they can do what they want in the world??

Pointed question – WHY should people sell QNet to Free themselves?

8. Why is the process of approaching potential ‘members’ like that of a secret Cult? Why didn’t ANY OF THE PEOPLE who approached me simply say, “Alok, Sell QNet” (Like they say – Sell Insurance) – WHY DID THEY MAKE IT SOUND LIKE VOODOO??

9. Is the QNet model ONLY based on “PESTER MARKETING”? (Defined: I will tell you to buy and you WILL BE obliged TO BUY because you can’t say NO to me because of our relationship) 

10. WHY SHOULD I INVEST UPFRONT?? 

This is the most important Question. Let’s assume that I am a great seller (I know 100k people), and QNet has a great product, why can’t I just SELL PRODUCT on a case on case basis and pass on the moneys to QNet? Why should I invest lacs upfront (as I was asked to do) ???

Why can’t I buy say 3 products and sell them (as a trader) and then if successful continue to enlarge the circle?

***

I would be VERY obliged to receive answers to these 10 questions if possible!

***
After I posted the question, 43 replies came in over the weeks. Some replies revealed the kind of ‘brainwashing’ QNet had achieved amongst the most clever of people:

Check out some of those answers (Name of person linked to Quora Profile)

***

Gokul Nath

Great Questions!!! But I do pity most of the answers here!!

Guys you were “invited” by your friends to start with them in QNET. Most of you went for the meeting and chatted with them and feel that they were following a set pattern, practiced pattern for the meeting. Obviously!! In your own company, when you are making a presentation to your future clients/ customers/ alliances, you would definitely practice it so that nothing would go wrong at the time of the meeting.

Anyone who has not gone past the meeting stage, don’t deserve to answer here, because you don’t know what goes on once you are in. I personally know a couple of friends who are into this for over an year and are making decent money. They spend around $9K and then upgraded their investment to $13.5K, and they have recovered their investment in 10 months time and are now earning more than $6K a month, summing up to approximately 3.75Lakh rupees per month- bigger than our salary and that too while still being in the comfort zone of our job.

True that you have to invest big… but then when the returns are big, the investment should be bigger.

Q-Net is the direct selling partner for Manchester City FC guys and do you think that they or their lawyers are idiots to partner with a scam company?? They sponsored the F1 racing events..and they are around for 16 years +. I watched their intro video and they tell about all these gold quest etc..their evolution and all and its not kept a secret!!

I just joined a week back seeing the success of my pals and it looks great!! Don’t approach the meetings with a prejudiced mind. Keep your mind open to the positives. Frauds are there everywhere!! Even Satyam Computers had a fraud, but would u dare call the company a fraud?

But as I said, guys who joined them, and sincerely worked towards their dream, and still had bitter experiences, please do share your experiences, because then we can call this a scam…others are not even eligible to comment!!

I am positive that I can come back and give a good testimonial in an year’s time and then possibly get u guys to buy some products through me!! :p

****

Deepak FarmaniaHi Alok,

Thanks for bringing up all these questions in public. I see the opportunity in the challenge. Following answers are totally my understanding of QNET. I’m open for criticism / discussion but with an open mind.

Ans1) Qnet is in the business of selling various products and services through an ecommerce platform using direct sales and network marketing business models

Ans2) Qnet never claims its products to be the best in the market but they are definitely competitive. Few major products being sold in India are – 1) Biodiscs; 2) QVI vacations; 3) Swiss watches

Biodisc – It is a natural energy generating device that produces SCALAR energy frequencies that have no negative side effects. Based on Nano Technology, the energy created, specifically rejuvenates molecular structures in all liquids. This improved energized water become more hydratious, taste better and extends its shelf life, all being important to your wellness. Applications of biodisc are numerous; pls google.

QVI vacations – Very price competitive in the market; direct competitors are Club Mahindra; Country club …etc. In some criteria we are better in others our competitors are.

Swiss watches – we have 3 brands – Chairos; BH Mayer; Cimier. These are luxury limited edition swiss watches. Obviously there are various other swiss watch making brands in the world. Rankings can be referred in the barcil world watch show.

My understanding of world is – Greatness is a relative term and its very hard to say which product is the best in the market considering lot of criteria a product can be judged on. Its like India today rating IIT Bombay best in 2012 but Business standard rating IIT Kanpur the best. Thus even though iPhone is the best mobile (in few criteria) other mobile companies cater to a set of customers base who don’t like iPhone.

Ans3) Most of the products and services sold on Qnet portal are owned by QI group of companies. Pls refer – www.qigroup.com; Better understanding of the cost structure of Qnet can only be provided by corporate team of the company which is in Bangalore. QI group is head quartered in Hongkong with a very strong base in Malaysia as well

Ans4) QI group of companies markets its various products / services through its direct sales & ecommerce arm – QNET. The products are majorly categorized in following business lines – 1) lifestyle & leisure; 2) luxury & collectibles; 3) Training and education; 4) property development & project management; 5) Logistics 6) Direct sales. The margins in these business lines / industries are available in the link provided in the question itself.

Ans5) By not following a typical distribution model of wholesales & distributors QI group for selling its products / services it saves the MAD cost which is a major component of the end price of any product/service across industries. A part of this MAD cost is distributed as commission to the IRs (Independent representatives) when the products are sold through the direct sales arm – QNET. Please note that all business lines of QI group are not sold through QNET. To understand how the money gets distributed in the whole network of IRs, your mathematical logic is valid but unfortunately that’s not the business model. Lets sit with pen and paper next time, if we meet.

Ans6) Partly the question has been answered in Question#5. Further adding the simple reason is Walmart’s vision may be to become the biggest retailer in the world but vision of QI group of companies is to change the lives of people it touches by following the mission – RYTHM (Raise yourself to help mankind). The core values of the QI Group are derived from Gandhi’s teachings of Truth, Service, Care and Raising Oneself. Thus QI group uses QNET with network marketing as a business model as a platform to empower people towards financial freedom, which is truly organic in nature.

Ans7) Very beautiful question. Thanks for asking this. Obviously the best and precise answer can be given only by the visionary and founder of the company. But let me share my understanding.
One aspect of the business model of Qnet is of-course making people financially free but that’s a very small part. As mentioned in reply to Question#6, the mission of QI group is RYTHM in which RY – (Raise yourself) means evolving oneself spiritually, mentally, emotionally, physically & financially and become a person who can create the change he believes in and as an entrepreneur duplicates his thoughts in others. Infact, making money becomes the by-product of this process and it automatically happens as the person becomes worthy of millions. Helping someone achieve such level of evolution / change can’t be done just by attaching them to a school (like HBS) rather by putting them in the education system which belives – “The wisdom is in doing and not just thinking”. To understand more reasons i highly recommend a read – “The business school” – by Robert T. Kiyosaki in which the author talks about the eight hidden values of a network marketing business, other than making money. You may choose to ignore the read but i share this with you with the same passion as you share “An autobiography of a Yogi” with others.

Ans8) Again a very interesting question. Very simple answer to that is because no 2 people can talk exactly same. If 10 people watch a movie then they will spread the word about it in 10 different ways. Qnet is a network marketing business where in millions of people spread the word in their million ways as long as they are complying with the policies and procedures of the company. I can completely relate to your feeling of this – “Secret cult thing”. But i can just say at this point that give Qnet a benefit of doubt because you can’t learn 100% about something unless you experience it.

But yes I can definitely explain why, to me, it doesn’t make sense directly to say – “Alok, lets sell Qnet (like insurance)”. Answer is because insurance and Qnet are totally diff things. There are 2 kind of prospects for an IR (independent representative) of QNet – a) A prospective customer; b) A prospective business partner. A prospective customer can be approached directly depending on the product segment he’s being targeted. But finding right business partners isn’t easy which i’m sure you can appreciate being an entrepreneur yourself. Before even putting that question about working together on Qnet i first need to know Alok as a person and whether we are like-minded and out belief and priorities in life, up to an extent, match or not. To do all this obviously i need to know you more and that obviously will take some time and few meetings before landing to the question – “Alok, lets sell Qnet”.

Ans9) No not at all. To be honest, i didn’t like the word – “Pester” but its okay. I’m open to criticism. Learning something out of it.
I believe you got this question because in the past you had the experience of people pestering you to buy based on relationship. But that doesn’t mean that’s Qnet model. That’s simply means that’s person’s style of talking / selling. If i ask 10 different people – what’s God? Obviously there will be 10 different replies which are purely based on their belief system which is shaped up by the past under the influence of few life event, situations, family, friends and society. But truth is God remains as one.
Like any other network marketing company, QNet faces difficulty in controlling how its IRs do the business but the challenge also presents an opportunity to stand out and prove that QNET is here to stay. I guess, since last 15 yrs QNET has come far ahead and stood different and that’s why you are brushing against it time and again through different people.

Ans10) Who said you can’t? There are 2 ways you can register with QNET – either as an individual or as a company. What you are exploring is probably possible if you register with QNET as a company. You need to contact the corporate office to know more about this option. In that case what i guess, and i may be wrong, that you will be registering your company with QNET either as a franchisee or a distributor / trader which is obviously not network marketing and your profit margins will be +/- some % of industry trends which of course will not make you rich. Ex – i haven’t heard any Apple franchisee owner / distributor becoming a multi-millionaire. If i’m wrong here then pls do correct me.

1000’s of people have 1000’s of reasons to register as an individual and do business with QNET but trust me on this – directly or indirectly what any person seeks, in this world, can be catered by network marketing business model (especially QNET). With rising unemployment, its the only industry in the world which can absorb anybody with any reason / dream to fulfill with only qualifying criteria of “being open to change and be worthy”

****

Piyush Tripathi

Qnet is not a scam before try anything its wrong to say about it, people who put case against Qnet already in jail and some cases are not proved against Qnet.I am already doing but thinking same earlier but its different from MLM skeams. I an already earning good every month. If need more information contact me. Company already completed 16 years , if scam then how completed think it and also sponsor Manchester city soccer team, how Manchester city will not ruined their name if Qnet is scam, its a place to earn extra apart from salary.****

Kamalakannan BalasubraniamI couldn’t hold my laugh by seeing this,

Please think.
Look these few things below:
Links
• QNet as a member of the the direct selling association of Malaysia:
 http://www.dsam.org.my/members-list
•  QNet as a member of the direct selling association of Singapore:
http://www.dsas.org.sg/dsas/Html…
•  QI Group as one of the fastest 315 global growth companies in the world economic forum:
http://www.weforum.org/community…
•  QI Group as one of the sponsors of the commonwealth business council:
http://www.cbcglobal.org/CBC_Pag…
• QNet as a main sponsor for the Asian Champions League:
http://www.the-afc.com/ar/compon…
• Case study of Microsoft on QNet (march 2010):
http://www.microsoft.com/casestu…
• Another case study by Microsoft:
http://www.microsoft.com/danmark…
• QNet partnership with CISCO Malaysia:
http://mis-asia.com/resource/net…
• QNet wins direct selling award:
http://blog.qnet.net/2011/05/qne…
• QNet as a licensed distributor of FIFA WORLD CUP COINS:
http://blog.qnet.net/2010/08/201…
• QNet gaining the VERISIGN SECURITY CERTIFICATION:
http://blog.qnet.net/2010/06/qne…
• Most important of all is the RHYTHM foundation links:
http://www.rythmfoundation.org/
http://www.rythmfoundation.org/projects.aspxhttp://www.rythmfoundation.org/newsevents.aspx<http://www.rythmfoundation.org/newsevents.aspx%C2%A0>
(please read this carefully to learn about this great foundation)
Leader Profile
• Dato Vijay as a personnel of the commonwealth business council:http://www.cbcglobal.org/cbc_pag…
• Dato Vijay receiving an Honorary Doctorate from SWISS MANAGEMENT CENTER:
http://www.vijayeswaran.com/anno…
• Dato Vijay’s book “sphere of silence” accreditation on FORBES:
http://www.forbes.com/2007/03/22…
• FORBES choosing Dato Vijay as one of 48 philanthropy heroes:
http://www.forbes.com/global/201…
• Dato Vijay Clearance from Manilla’s accusations:
http://indonesia.questnet-scam.com/
• Vijay Eswaran receiving the title DATO from the SULTAN OF PAHANG for his contribution to the economic growth in the region:
http://www.prweb.com/releases/20…
Products
• Certifications of ENERGY PRODUCTS:
http://biodischealing.com/bio_ce…
• Certifications of HOME PURE FILTRATIONS SYSTEM BY NSF:
http://www.nsf.org/Certified/DWT…
• To learn more about the NSF:
http://www.nsf.org/
• SWISS MANAGEMENT CENTER that provides scientific contents of the courses of the SWISS E-LEARNING INSTITUTE:
http://www.swissmc.ch/
• Testimonials from people who tried QVI Club and Xchange World vacations packages:
http://www.qviclub.com/testimoni…
http://xchangeworld.com/xperienc…
• Bernhard H.Mayer registration to the SWISS REG:
https://www.swissreg.ch/srclient/faces/jsp/trademark/sr300.jsp?language=en§ion=tm&id=530845<https://www.swissreg.ch/srclient/faces/jsp/trademark/sr300.jsp?language=en%C2%A7ion=tm&id=530845>
• Members List | Direct Selling Association of Malaysia (DSAM):
www.dsam.org.my<http://www.dsam.org.my>
Founded in 1978, the Direct Selling Association of Malaysia (DSAM) is a national trade association aimed at promoting the direct selling industry as well as act as the de facto voice of the industry.Qnet in FORBES:
If you think Qnet bribed Forbes sorry for you.

http://www.forbes.com/sites/dona…

http://www.forbes.com/sites/dona…

http://www.forbes.com/sites/dona…

Hi, still if you say it is scam ask your questions to Qnet directly at
https://c.getsatisfaction.com/qnet

Sorry, I don’t have time to give answer to all your queries. My Qnet business is more important than answering you

One more thing if a person rejects you for not recruiting  as an IR.
change yourself.

****

Of course there were lots of sensible replies that directly spilled the beans:

****

Jaineel Aga, CEO, www.planetsuperheroes.comI was one of the few unfortunate ones who was contacted by a Sales Agent on Qnet as well. This was on LinkedIn – and the theme was to “Partner for a business plan”. I also asked the  upfront question – What was the business and why have you picked me to partner? The gentleman, I must say was a great salesman and convinced me that this was something that needs to be discussed in person and not over the phone – FIRST RED FLAG but I gave him the benefit of doubt.

I met him at a Cafe Mocha at Bandra. At first I was surprised when he was already chatting to someone who seemed to be keenly listening – SECOND RED FLAG – what seemed like a casual conversation was a well crafted, designed sales pitch.  (This was confirmed later that everything from the venue -Cafe Mocha at Bandra to the script is designed as a process chart and agents are “trained” to give the correct speech). He wasted 30 min of my time talking about my dreams – Be it from driving Ferraris to owning sea facing penthouses in Mumbai! While I found this rather amusing, he blamed my “corporate thinking” to have inhibited my  capacity to DREAM!….Man and I thought I had seen all the bollocks one could possible hear in Management consulting and Investment Banking!

Given my general pessimism towards flaky talks, I was running out of patience and I had to tell him that either we cut to the chase a.k.a the”business idea” or I would need to take his leave –

That is when he revealed the “masterplan”

Qnet – is similar to Amway or any other direct selling business started on the premise of creating a sales pyramid.You become part of the chain when someone sells you a product at a marked up price (say a 3 day hotel voucher at XYZ resort for 50K).

However, what they are truly selling is the ability to earn a commission everytime you downsell a similar product to another “bakra”. The non-linear growth in income is through increasing the pyramid under you (think of you being at the Apex of a sales pyramid). Every sale that comes from anyone you have introduced directly or indirectly contributes a % to your commission – Not a Ponzi scheme in the literal sense but Pyramid structure is similar.

Apparently, this guy was somebody senior in the pecking order with 120 under him (read… already had 120 bakras)

After he had finished, I complimented him on his perseverance, his selling skills and honestly 90 mins of amusement. He made me feel like Qnet would land me the Iron Throne ( for the GOT fans out there)

I thanked him for the coffee and promised him to repay with a beer, if someday I needed a head of salesman to run a  “real business”.

***

Aniruddha Sarkar, Fund Manager by the day and pursuer of bigger ideas thereafter!Interesting to see QNET’s business model being discussed here. It was high time that it got exposed. QNET was earlier known as GoldQuest and when authorities caught up its fraud activities, it changed its name to QNET. Re-emerging after changing your name, is reason good enough to doubt the genuine business model of the company.

Some pointers about this MLM model from my personal experience with some ‘Soldiers of QNET’:

  • QNET members are no less than Radical Salesman: QNET members treat Eswaran as a demi-GOD and are blinded by the lures of becoming a successful entrepreneur like him by fooling your circle of friends. One common trait you can find in all QNET members is there way of talking philosophical shit of becoming an entrepreneur, getting freedom from 9-to-5 job, being a team leader, achieving the bigger joys in life, Mission 2020, etc etc.
  • QNET is like a trap: Once you pay a big amount and become a member, you are desperate to bring in more members in order to recover your money. I would say its a fine blend of Ponzi Scheme and MLM.
  • QNET Products nothing less than crap: None of the products of QNET make any economical sense. Priced way too expensive and nothing unique in them. They cannot be sold in a competitive open market because they do not stand any chance of getting a single customer if sold openly. These products get sold only when there is one your known acquaintance who takes you to a coffee shop and emotionally coaxes you into getting into this trap.
  • Difference between QNET and Amway or Tupperware: The products of Amway and Tupperware are very Genuine and competitively priced. They also don’t require you to shell out lakhs of rupees to buy one of their expensive products and become an ‘Agent of QNET’.
  • QNET commission system is a Mirage: The big commissions QNET talks about can only be achieved by overcharging the gullible consumers and having hefty margins for themselves. Even by that standard, one starts getting commissions only once he has entrapped sufficient number of more members under him. 

The saddest part of something like QNET is that it is drawing educated and qualified professionals into the trap. One of the selling points of QNET by its Agents are that, “Vice presidents and Managing Directors of MNC banks have also left their high paying jobs and are doing QNET now. So you should also join and make a difference to your life”. Give me a break…..

QNET should be nipped in the bud itself before it makes India a land of salesmen selling fake and expensive products.

***

Then, the skeletons began to tumble out of the cupboard: 23:11:2013

And then it completely blew up: 03:01:2014

****

So, the 2 remaining questions I have this time are:

1. How can the most intelligent people on earth get fooled by something that easily looks like a scam? Do clever people really think that ‘easy money’ can be earned in a legit way? What makes them go blind?

2. How can people with a conscience fool their friends, family and colleagues? Does Greed overpower ethics?

Can you help me with your thoughts?

Ref: https://web.archive.org/web/20170416233526/https://therodinhoods.com/post/the-qnet-scam-and-2-questions-that-haunt-me/

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