I dont usually believe reddit stories, but this is plausible, and interesting even if its a lie. A kid in my middle school accidentally created [a pyramid scheme]. I was in middle school in the early 1990s, around when Sams Clubs and the like started opening up. None of us could drive yet (obviously; we were like 14) and few of our parents had club memberships, so it was rare that anyone could go there and buy stuff. And none of us had jobs or anything anyway, so youre looking at about $5 in allowance here and there as your budget. One kid had a great idea and bought some of those HUGE bags of Blow Pops for $5. Lets say he walked away with 100 Blow Pops -- 5c a piece. He came to school and sold them for a quarter and was out of stock within a few days. He did this for probably three weeks before others got in on the game. (There were a bunch of arguments over whether the others had to go into a different line of candy, or if Blow Pops were fair game. The first wave decided that everyone needed their own kind of candy, creating a little cartel. Kind of funny in retrospect.) About a month or so later, a new kid starts selling, and he has everything. Must have spent $50, maybe $100. But he quickly ran into a problem. The school started cracking down on student-run candy sales in the cafeteria, so lunch time -- where the money was -- became a really dangerous time to sell. Most of the kids who were selling just stopped, cashing out while they could. But this one kid had way too much candy to do that. There were only four classes after lunch and you really werent selling candy during the first two periods, so that left five or six reasonably good times to find customers. The bad news was that typically, you had the same kids (give or take) in all of your classes by now, because we were broken up into levels. (The exception, things like gym and band, were really bad times to sell candy.) The good news was that homeroom was between second and third period, and that was homogenous. So you got to see kids youd otherwise not see -- and, more importantly, theyd see kids youd otherwise not see. The kid with all the candy ended up repackaging it into ziplocks of five pieces and sold it them to kids for $1/each. That happened for a few days until one of the kids in his homeroom asked to buy five, explaining that he was reselling the candy for 25c a piece and effectively getting a free piece of candy each day, and there were a few kids in his next period class who wanted to do the same. He offered $4 because he wanted to make a profit off his friends. The kid with all the candy agreed, and not only sold out by the end of the week, but ended up buying another $50 or so worth of candy to do it the next week, too. A few other kids in the homeroom caught wind of this and wanted in. Candy kid ended up selling 5 bags at a time to about five or ten kids in his homeroom, each seeing the opportunity to make a free dollar a day just by being middlemen. It was an easy sale -- youd tell your friends how you bought the candy and sold it quickly and flashed them the wad of singles you had. It worked for two days, maybe three. Basically, the entire grade got flooded with candy sellers, and the candy being sold wasnt scarce any more because the supply wasnt controlled by one person or a cartel. It was a commodity now. Prices crashed to like 10c per piece and the MLM-style distribution structure couldnt support that price. The whole supply dried up pretty quickly thereafter, and with teachers starting to crack down, no one reentered the market for months.
Posted on: Wed, 10 Sep 2014 19:10:17 +0000
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