What is a Pyramid Scheme? Too Many Are Ill Informed.

Call 425-687-0100 if you want realize what I did. BTW- I'm now at 202 lbs.

Call 425-687-0100 if you want to realize what I did. BTW- I’m now at 202 lbs.

When my wife and I made the decision to represent AdvoCare as Distributors we did it because we were so totally impressed with the products and the people representing Advocare. Our friends and AdvoCare mentors are such wonderful and impressive people, which we’ve learned even more so in the nearly one year we have been accepting their teachings and guidance. But one thing they warned us about, and others within the AdvoCare family warned us about has come to pass when I absolutely didn’t think it would. We were warned that a lot of people would outright reject Advocare without ever hearing about it because they were convinced it was a “Pyramid Scheme“. I didn’t think this was such a threat because I didn’t think there were going to be that many people my wife and I encountered who were THAT stupid.

Ok…Ok…that was mean.

Not stupid. How about ignorant?

Better…but still a little too demeaning.

Let’s stick with “ill-informed”.

Anyway, there have been a lot more of those ill-informed people that I ever thought possible.

If you’re one of those stup…errr…ill informed people you probably became that way through absolutely no research done on your part. My guess is you asked someone about Multi-Level Marketing or maybe it was because of you specifically asked someone about AdvoCare and this person being equally stup…errr…ill informed said to you, “I heard its a pyramid scheme” and that was it. You were done with AdvoCare or Multi-Level Marketing completely. You made no effort to learn from someone who knew better, you didn’t even bother to evaluate the intelligence or wisdom or experience of the person who gave you that false information. In all likelihood this person who gave you this bad, incorrect information was not accomplished in any way. But their word became your Bible, on this subject anyway.

It’s amazing how many people take the words and advice of friends and family who have no credentials, no accomplishments, no resume`, education, or bank account in which to measure their advice as worth while. Don’t get me wrong. I’ll take friendships from where ever they’re offered. But in the words of Sales Trainer Tom Hopkins, “I won’t take advice from anyone more screwed up than I am”.

You, the ill-informed one, need to know what a pyramid scheme actually is because neither Advocare nor most other multi-level marketing companies are “pyramid schemes” They are closer to what “Rich Dad, Poor Dad” author Robert Kiyosaki called “the perfect business”.

The definition of “pyramid scheme” from Wikipedia is: pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.

Bernie Madoff was busted in 2008 for operating the biggest pyramid scheme in U.S. history, totalling $65-billion dollars in fraud. He did it by taking new investors money to pay off earlier investors. And then he kept getting more and more investors, all of them paid off with money that came from newer investors. The obvious end result of this is that eventually Madoff ran out of new investors, and the stock market crash of 2008 painted Madoff into a corner in which he couldn’t escape. Investors kept asking him for their money. He paid out as much as he could, but couldn’t keep up. The dier economy left him fewer and fewer investors and eventually he was caught and arrested, December 11, 2008. Madoff made no investments. He sold no products. He just took from Peter to pay Paul.

Advocare sells products. AdvoCare sells the finest health and nutritional supplements in the world. The company has hundreds of thousands of satisfied customers; most of whom take the products and never work it as a business. And not one AdvoCare Distributor is paid a dime for signing-up another. AdvoCare is a products driven company. And it is a for-profit company. It’s been around for over 20 years and you don’t get to stick around that long by being a pyramid scheme. A pyramid scheme is not successful in signing up famous national spokespersons like Drew Brees, Jason Whiten, Matt Hasselback, Sam Bradford, Michael W. Smith, Doug Fister, Veronica Campbell-Brown…and so many others. A pyramid scheme doesn’t sponsor NCAA football Bowl games, like the AdvoCare Independence Bowl. A pyramid scheme doesn’t sponsor Nascar races or race cars, like Advocare.

I once had someone actually tell me, regarding multi-level marketing, “I have a problem making money off the labor of others.” I told them of my previous employers. This broadcast sales company had a single owner, a General Manager, and a Sales Manager, in descending order of rank and/or responsibility. Not one of them sold anything to any customer (In truth I think the Sales Manager made a few sales every year…but not much) or made any of our products. They made money off the labors of the Sales Staff. We had a sales staff of between 40-45 people. They sold everything and were paid a wage based on how much they sold. The Sales Manager made a living based on how much the sales staff sold. The General Manager’s salary was raised based on whether the sales staff sold. The owner increased his wealth or earnings based on how much the sales staff sold. Are you beginning to get the picture?

The Classic Business Pyramid

The Classic Business Pyramid

Multi-Level Marketing became tied to the idea of what a Pyramid Scheme was over 20 years ago when the U.S. Justice Department charged Michigan based Amway Corporation with being a “pyramid scheme”. Amway defended itself, and won in court. It isn’t and wasn’t a Pyramid scheme. Unfortunately though for them and other MLM’s the label stuck. Amway was a billion dollar sales company in the U.S. prior to the lawsuit and a damning 60-Minutes tv profile. They have since fell on very hard times and a bad reputation within the United States. But Amway is still one of the top 25 business companies, in revenue, in the country thanks to the fact that the reputation-damaging false charges didn’t diminish Amway’s over-seas sales.

Multi-Level Marketing companies have existed successfully in this country for nearly 150 years. The Fuller Brush Company being one of the first and longest lasting. A couple of others you may have heard about are Avon or Mary Kay Cosmetics, and Tupperware…just to name a few. Multi-Level Marketing simply means you are creating leaders who lead a sales force and get paid according to that sales force’s level of success. But unlike the Classic Business Pyramid as shown in the picture above, the sales force of a well run MLM has its own sales force under them (If they choose to.) The fact is most buyers of Mary Kay Cosmetics never sell Mary Kay Cosmetics. That includes my wife. She’s bought Mary Kay for over 20 years and hasn’t sold a single lipstick container. Nobody accuses Mary Kay of being a Pyramid scheme.

I’ve never sold Amway or any other Multi-Level marketing product/company in my life, either. But all this information is on-line and free to find for anyone who looks.

The fact is name-calling, or demeaning something you don’t know about or understand, by calling it a pyramid scheme is a lot easier than taking the time to learn about it. And that’s why stup…errr…igno…ummm…I mean ill-informed people will continue to believe Advocare and other MLM’s are pyramid schemes. They’re just to lazy to learn the truth.

Thanks for visiting. Comments are welcome.

Go to our website, read our story and try some AdvoCare. You won't regret it.

Go to our website, read our story and try some AdvoCare. You won’t regret it.

The American Dream Needs Revisiting

The Statue of Liberty front shot, on Liberty I...

The big lie about the American Dream is the concept of upward mobility through dedicated effort to a career and a job. Statistics and surveys indicate THAT just doesn’t happen any more in America. The fact is great economic upward mobility comes from those who work not only harder, but smarter.

An article in the Seattle Times yesterday made us all aware of how bad things have gotten. “Problem With Paychecks” took much of its content from Parade Magazine’s annual “What People Earn” survey. Here are just some examples of what the story reported. The following list names the person, their location, and their annual income and descends from highest to lowest:

…11. Lorri Froid, Seattle
Office manager
$49,000
12. Heather Murphy
Woodinville elementary school teacher
$39,032
13. Anne Fogarty, Kirkland
Event planner
$37,760
14. Mary Purdy, Seattle
Dietician and adjunct college professor
$36,000
15. Nan Lammers, Skykomish
Forest services snowshoe ranger
$33,414
16. Curtis Hodgson, Burnaby, B.C.
Lacrosse player
$26,500
17. Ned Whalen, Seattle
Car sales professional
$26,000
18. Cara Sullivan, Seattle
Barista
$15,000
19. Betsy McPhaden, Seattle
Artist
$2,000

I didn’t list the Top Ten on the actual Seattle Times list since most of us are not them; i.e. Major League baseball pitchers, NFL running backs, CEO’s of billion dollar corporations, etc.

I know the income that my wife and I earn, and I know how much we struggle to meet our bills and live in what could only be described as a middle-Middle-Class lifestyle (8-10 years ago I would have said upper-Middle-Class, but that’s another story). Nine years ago when we bought our home in the Seattle suburb of Renton, WA it’s purchase price was exactly what the King County Association of Realtors was identifying as the median-price for homes being sold in King County at that time.

Map of Washington highlighting King County

Some up-grades may have pushed its price slightly above the local median price/value; but for the most part it serves as a pretty evident measuring stick for middle-Middle Class. My point is…for the people listed above…I don’t know how they make it.

The American Dream as it is defined by one on-line dictionary is as follows:

a·mer·i·can dream
Noun
The traditional social ideals of the United States, such as equality, democracy, and material prosperity.

The term was coined in 1931 by historian James T. Adams. It’s changed over the years but basically came to represent:

Owning a home and a car or two

Raising a family, with kids that grew up to do much the same as you

Working 40 hours per week for 40-50 years in a job or career

Taking 1-2 approximately week-long vacations every year to Disneyland or the big regional beach

Retiring in comfort to regularly play golf, bingo, and visit the grandkids once in a while. 

It became:

Leasing (buying) your home from the bank who charges you a low-interest rate for the right to do so; a home of 2500 square feet or more, 2-3 cars, and an RV.

Have kids raised by someone other than Mom or Dad who are too busy at the office to be home for dinner, let alone after school (whether as a family or not is optional); or raised by your 55-inch tv, or by Facebook. Pay $15,000-$20,000 per year per kid for 5-6 years for them to get drunk at college.

Work 50-70 hours per week for a wage capable of allowing you to save for retirement, or (as with the people listed above) 40 hours per week to barely scrape by and have zero retirement.

Vacation every year for 2 weeks in some exotic location, paying for all of it on your credit cards.

Retiring in your 70s with a reverse mortgage praying the 20-30% equity you’ve managed to accumulate in your primary residence is enough to maintain your lifestyle.

That’s some lifestyle. That’s a lifestyle in which children are sacrificed in favor of “stuff” and “status”.

Today working a job that keeps you from your family, or your recreations, 50-70 hours per week is something people wear like a badge of honor. Why? Wouldn’t you be better off working only 30-40 hours per week, making as much money or more, and devoting the rest of the time to your children, your wife, your husband, vacations, etc?  The obvious answer is, yes. And you can do it. But the key is to get money working.  Get multiple streams of income. The earlier mentioned Seattle Times article points out that median hourly income has rose only 11-percent since 1973. Additionally, in 2011, wages for males with college degrees were JUST 5 percent greater than in 1979. For men with only high-school degrees, entry-level wages were 25 percent lower than in 1979. Your single-solitary job is making you poorer and requiring you to work more hours. The 1-job, 1-career American Dream doesn’t work. You need money coming in from elsewhere.

We used a very large sales-commission check to buy our first home in 1994. Two years later being home owners allowed for us to borrow enough to move-up into a bigger house and keep the other house as a rental. We did the same thing again in 2003. My wife and I acquired nearly all our most valuable possessions, went on our most expensive vacations, and spoiled our kids during the time we had the additional income stream from owning rental property from 1996-2006. Warren Buffett, among others, is one who cites multiple streams of income as key to being successful.

The Missus and I have finally re-learned what we knew before. In our case AdvoCare is already giving us a new income stream. Based on the $20-25-thousand per month incomes our friends achieved with AdvoCare in just 3-years, we expect it to be a sizable stream, growing into a river. We’ve met many others who also are earning over $1000-per month with AdvoCare while working a mere 5-10 extra hours per week. And it’s a growing business. And it has the added benefit of paying us while we aren’t even doing anything. It has the added benefit of only paying us when we genuinely help other people. And it has the added benefit of being a continuing inheritable business and income stream, meaning should my wife and I die the income generated by our AdvoCare business becomes our children’s. Then they will have multiple income streams too.

Thanks for visiting. Comments are welcome.

Click to go to our AdvoCare website.

Click to go to our AdvoCare website.

The Fear of Buying

Advice for sales persons of all products and services, packaged in personal terms.

Whenever any one of us buys something we’re faced with fear. Except my wife. She has never seemed to manage this reasonable emotion (Just kidding, Honey). But in all seriousness you can be faced with fear of making a mistake; the fear the sales person is lying to you; the fear of parting with your hard-earned money; and in some cases the fear of embarrassment. Such fears paralyze many from decisions that clearly could be in their best interest.

For professionals, like myself who rely on sales for our living and our families well-being, we must find ways to overcome these fears and continue on in spite of them. Because try as we might, these fears aren’t going away. As correctly pointed out by the blog Wheelhous “Goal-oriented sales people can’t overlook the risk their sales prospect is taking on by giving them their time and attention.” …or the fear that accompany that “risk”. 

This subject has been on my mind lately because my wife and I are AdvoCare Advisors, distributors of fantastic nutritional, energy, and weight loss products that have positively changed our lives in the past 6 months.

AdvoCare allowed me and my wife to lose 30 lbs each in just 4 months.

AdvoCare allowed me and my wife to lose 30 lbs each in just 4 months.

I just can’t belief everyone we know is not more willing to take my word-for-it that this company and these products are “the bomb” (’90s term, right? Oh well). Of course, the fault is with me and not with them. In sales terminology I need to earn their trust, and upon doing so confirm it. The “closing” parlance calls for this confirmation to be acquired by simply asking, “You trust me, don’t you?”. Let’s face it, your best friend and even your Mother withholds trust unless you ask this simple question. Upon asking they tend to feel a little sheepish about saying they don’t trust you. And with the exception of only the worst of us fellow human beings, why would I or any sales person lie to you? Especially if they’re family or friends already? You just need to remind them that they do…trust you, that is.

Affordable Weight Loss

 

As for the fear of parting with their hard-earned money you just have to convince those you’re presenting your sales proposition that their lives will be better without that money. In my case with Advocare it’s usually easier to convince someone that they would live and feel better minus the extra 40-50 pounds they’re caring around than it is to convince a another very fit person that they too will feel better, have more energy, and probably look better too. But both are true. But we have to get past their fear.

 

The fear of embarrassment is easier to overcome. But I’m not like most people. I have a pretty high tolerance for embarrassment. With Advocare there’s the embarrassment of admitting that *gasp*, your fat! My own fear is in approaching clearly over-weight people with a product that I know will help them, and that if they or I are embarrassed by their girth we need to get over it in order to help a fellow human being. The other embarrassing aspect of Advocare and similar products or companies is that they are a Direct-Sales company. This doesn’t embarrass me in the least. But it does others. Here we just have to be tough and correctly point out how AdvoCare does hundreds-of-millions of dollars in business every year and has been in business for 20 years. Direct Sales is a common form of dispensing products and has been used for a variety of companies for well of 100 years. So as the expression goes, get-over-yourself. What’s good enough for Mary Kay, and Avon, and Fuller Brush, Pampered Chef, etc, etc. The list is endless.

Whether you are selling cars, homes, knickknacks, or AdvoCare you will be faced with your prospects fear. Failing to overcome it is your fault. Know that you are doing them a favor by helping them over-come it too.

Thanks for visiting. Comments are welcome.

Related articles

Your Closest Friends and Family Will Not Support You. Why?

When I entered into the world of direct sales, or Multi-level marketing, by becoming an Advisor for AdvoCare  a few short months ago my friend and up-line (MLM term referring to the person who signed you up) said something totally out of their character. He said not to be surprised if your closest friends and family do not go along with your offering. He said in most cases this would prove to be true. I thought how strange to hear this coming from a guy who is one of the happiest most-positive individuals you will ever come across. And…I thought him wrong.

Turns out he was right. My friend and his lovely wife have built a business with AdvoCare that pays them $20,000 per month on average. And their business is growing. They expect to be making $40,000 per month within a year. And they’ve done all this in only three years, on their own. He points out that his Best Friend from 3 years ago STILL hasn’t come on board as a distributor. To my understanding (I could be wrong) neither have his closest family members including his sister, who I also know and have worked with. My up-line has over 1200 people signed-up as AdvoCare Distributors or Advisors. Remarkable!

English: A simple binary tree diagram illustra...

A simple binary tree diagram illustrating the hierarchical structure of a multi-level marketing compensation plan.

And yet here’s what I found. MY BEST FRIEND, who could stand to greatly benefit from the weight loss and nutrition AdvoCare products provide, not only hasn’t joined me. He won’t even listen. He hasn’t a clue what AdvoCare is or provides. And I’m his best friend, and he’s mine. Remarkable. The list of those close to me who won’t listen to anything my wife and I have to say about this company that has us so excited doesn’t stop with my best friend. My immediate neighbors and business partner in my video production company, Total Broadcasting Servicelikewise will not only not sign up as our customers or distributors…they won’t even hear a presentation. Remarkable!

English: A picture of Atlanta Motor Speedway t...

A picture of Atlanta Motor Speedway where the annual Labor Day Weekend AdvoCare 500 takes place.

And yet it turns out…not so remarkable. In a blog entitled “Why Friends and Family Members Won’t Support the New You”  business coach Ray Higdon spells out some of his ideas why this phenomena is so common. He says , in so many words, that those closest to you won’t support you because they’re used to who you “used to be” and can’t fathom you being different, in the mode of a marketer or successful person. He also intimates jealousy plays a part. They don’t want you to be successful because it will reflect poorly on them.                        I’m not sure about all of Higdon’s assertions. Direct-Sales companies face skepticism from everyone already, not just friends and family. It’s my job, and yours, to find people who you can help either with your products and service or with the income opportunity from the MLM, or both. There really are people who want to be their own boss and are disciplined enough to work a business as a business, and grow it, slowly at times, but grow it nonetheless. If you’re looking for a get-rich quick scheme most of the time you’ll be disappointed.                                                                                                                                    In this rather poor quality video Russ Howe, a network marketer with GDI, Global Domains International, actually says approaching friends and family about your business is actually a BAD IDEA:

Higdon correctly points out that your success can and will be determined by you going out and meeting and selling to new people. Which has proven to be true with me. In the approximately 3 months that I have actively represented AdvoCare 35% of the folks I’ve gotten involved with AdvoCare on a retail customer or distributor level I had virtually no previous or extremely limited contact with.  Another 53% I only had tangent contact with; which is to say periodic and infrequent. And the remaining 12% I was relatively close to and contacted with some frequency. And all this while working AdvoCare as a business very seldom. While only putting in 5-10 hours per week training myself, email corresponding, meeting in-person, and making phone calls I’ve managed a small income that has already proven valuable to my family. And since this has been done over a mere three months and with little actual time devoted I have every reason to believe the actual amount of return from this business will grow.

I find it remarkable that those who know you best are least likely to support you and your new business. You would think just the opposite were true. But facts are facts. Don’t let your friends or family drag you down. And realize it’s not personal and its not unusual and lots of folks, like my friend and sponsor, move past the disappointment of friends and family not participating in your new exciting business and go get those new friends who really do want to live well and independent.

I’m really curious to hear from other MLM representatives and tell me what your experience has been on this subject.

Private side note to any friend or family of mine: Yes, you not helping me and my wife build our business and enjoying what we have clearly benefited from DOES disappoint me. But it is what it is. Own it. It’s your decision. Meanwhile, I still love you. Period. 

Thanks for visiting. Comments are welcome.

Go Ahead Make Fun of MLM & Direct Sales. I Did.

Português do Brasil: Representação gráfica do ...

MLM or Multi-Level Marketing companies are a joke. But if that’s true, why are there 30-million Americans (1/10th of the country) involved in a Network Marketing Company?

Direct Sales companies don’t make you any money. But if that’s true how do you explain the checks I’ve been receiving for the two months I’ve been representing AdvoCare? Or the $20,000 per month a friend and his wife earn through Advocare in only three years representing this great company? And how do you explain the $153-billion spent on products and services provided by network marketing companies?

Like anything in life, its all what you put into it. AdvoCare or any MLM with a good product pays well to those who work and represent the products. To those who don’t, it doesn’t.

I’m a living example of getting out of work exactly what you put into work. In 1992 I began working in a sales job in my chosen industry of radio. I did OK for a couple of years and was pleased with myself. But others within my own office were doing better. I looked at most of them and said “What have they got that I don’t? Why can’t I sell as much and earn as much as them?”

So began my investment in myself. I spent thousands of dollars of my own money over the next few years on all kinds of seminars, books, videos and audio tapes with the goal of improving my sales ability and my income and my family’s lifestyle. Sales trainers like Brian Tracy, Tom Hopkins, Dr. Kerry Johnson and motivational speakers like Zig Ziglar

Live video feed of Zig Ziglar speaking at the ...

Zig Ziglar

became my mentors. It worked. In only 2-3 years I went from being an OK sales representative and among the top ten in my company to number one in my company. I regularly broke sales records for a 25 year old company that regularly employed around 40 sales reps. My sales were consistently 15-20% ahead of whoever was in second place. My income tripled. My family bought a 3000-square foot home in one of the more expensive suburbs in the country. And, after 13 years at that company I left it and started my own business, Total Broadcasting Service, and have been successful with it for 8 years (in spite of one of the worst economic downturns in U.S. history). I couldn’t have achieved any of this had I not put in the time to train myself and bring my sales from OK to OUTSTANDING.

The other day I posted a link on Facebook to my AdvoCare website, something I do periodically. A bold former “friend” made a particularly nasty, negative comment about MLM’s and me posting about my involvement with them and posting on FB about a direct sales company he clearly had no knowledge of. Given I really didn’t know the guy and only connected on FB because of a single mutual connection, he made it real easy for me to unfriend him. Who needs that kind of negativity?

But in making his Comment he also did me a favor. He reminded me of an attitude that exists in the eyes of many about direct sales companies like AdvoCare. He reminded me of how I felt about MLM’s. And if you are skeptical and even cynical toward AdvoCare and other multi-level marketing companies its OK to admit it. I was the same way. But if you can admit your cynism perhaps you can also admit you really don’t know much about the subject of MLM’s in general, or AdvoCare specifically. I didn’t.

I grew up watching my Mom chase the pot of gold under every rainbow that ever appeared. She was part of all kinds of MLM’s over many years, including the BIG one, Amway. Her failure to devote time and stay dedicated to any of these businesses ultimately guaranteed that she would never be successful with them. Her failures became my reality. Perhaps you are like me…I knew someone once who tried something like that and it didn’t work. Perhaps you can be fair and admit that “someone” didn’t tell you much. “Someone” didn’t stay with “it” long. “Someone” didn’t put in a lot of time toward their business during the short time they “tried” it. And “someone” got exactly out of their business everything that they put into it.

My wife and I became AdvoCare distributors because we tried their products and each lost 30 pounds of fat in 3 months. We became distributors because we saw our friend and his wife leave the “regular” work world and begin raising their kids with a healthy income and a freedom we could only envy. We became distributors to find three other families who wanted to join us in earning $5000-$10,000 per month while working less than 20 hours per week.

Let me educate you about a few things you may not know about network marketing companies. They’ve been highly successful in this country for at least 150-years. One of the early successes was the California Perfume Company which began in New York in 1890 with 10,000 sales representatives and later changed their name to Avon. 

Español: Logotipo de la empresa estadounidense...

The Fuller Brush Company began selling their products in 1905 and by 1919 had made over $1-million in sales. Fuller Brush and its business model spurred the creation of other companies you may have heard of including Stanley Home Products and Mary Kay Cosmetics which began operations in 1963 and was already selling $2-BILLION in products by 1996.

Tupperware became a world-wide billion dollar company through the direct sales method, and in so doing they became a name synonymous with all plastic air tight food and beverage containers.

And Amway grew out of the Nutrilite vitamin supplement company in 1949. By 1973 Amway had over-taken Nutrilite, and bought the company. Amway’s bad name, in the eyes of many, began when the Federal Trade Commission filed suite in 1975 against the company accusing them of being a pyramid scheme. By 1979 a Federal judge had ruled in favor of Amway. But unfortunately the “pyramid” tag stuck (as do so many false accusations but not exonerations). Still it didn’t prevent Amway from growing into a company with $11-BILLION in sales in 2011.

So with all these success stories I gotta ask just how do you mean “They don’t work”? Are you afraid of success? Certainly some people are, and that comes down to self-esteem issues we won’t get into in this blog.

But, again, with huge, immensely successful company’s like AdvoCare helping people achieve financial freedom all over this great country why not ask yourself to re-examine your own prejudices, like I had to do. I’m a successful businessman with a growing company, happily married for more than 25 years, a nice home and a lifestyle that many would be happy with. And I’m no dumby. And I enthusiastically became an AdvoCare Distributor and Advisor. I plunged into the world of MLM and so far the water’s fine.

Is AdvoCare and specifically direct-selling for you? Well, I would ask that you look at the recent Rookie Bonus earners in AdvoCare and see what a diverse bunch it is, from Orthopedic Surgeons, to stay-at-home moms. Anyone and everyone does this and education or previous high income (or low) have little to do with one’s success with AdvoCare.

Don’t be afraid. Learn for yourself.

Thanks for visiting. Comments are welcome.

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