He's not conning you in the strict sense of the word. This just looks like your classic MLM scenario (like Amway) where the bottom level "Associates" make little to no money but work ridiculous hours and only people with large numbers of "Associates" under them make any actual money.

You may not be conned into spending your money into the company, but you are being conned into spending your time and your own money to promote this store of theirs and get sales. The company is getting all the benefits of having employees do all the work and they don't even have to pay them! You'll be putting in 10-12 hour days and YOUR OWN MONEY to promote them and YOU take all the risk of failure. This is a golden deal, FOR THEM!

It saddens me to see someone truly believe in a company like this, because you're just being used and you don't even see it yourself.

[edit]
Wow, classic! The "store" is a penny auction. They are not only tricking their "Affiliates", but also the customers into thinking they are getting good deals. These people are geniuses!