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These may NOT
all be reasons to avoid a program, but they are
certainly reasons for caution. You must be sure you
can deal with the problems which will result from
each of them before you invest in a business which
has one of these problems. If they have more than
one, please consider more carefully.
Items
in Red are considered major problems
1. No
differentiation between the product, and the
ability to resell the product - in other words,
if you buy the product, you are also buying the
ability to resell it. This is a flaw in our
opinion, because this often means that the product
itself is not sufficiently valuble to sustain long
term sales, and that the program will suffer
burn-out common with unstable MLM businesses. This
puts such businesses in about the same category as
the chain email letters for which you receive a
"report" after you pay your money. The product
itself is not what people value, it is the ability
to resell the product. People who join want to make
money just to make money, not to provide a product
of value. To our way of thinking, this categorizes
them as a glorified pyramid scheme.
2. Product
overpriced due to high MLM compensation. This
interferes with the ability to sustain long term
repeat sales. I have heard people say repeatedly
about popular MLM products: "I love the products,
and would love to keep purchasing them, but I just
can't afford to."
3.
Contradictions and inconsistencies in
advertising literature or presentation. We see
this a lot, in many ways. One is the Plan, that
shows you how much you can make, but neglects to
mention that payment to your downline has to be
deducted from that amount. Another is in the fine
print at the bottom of the presentation that says
that the average distributor makes only $X per
month, and the amount is under $100 - or this quote
"*The income testimonials presented are applicable
to the individuals depicted and are not a guarantee
of your income nor are they typical. The incomes
presented are those of persons within the top 1% of
all participants." Yet another is that the seller
tells you how much you can make, and then confesses
they only just started, or worse, they have been
doing it for years and are not making anything. The
last one we see commonly is someone who tells you
that this latest product is THE way to go, but when
you ask them, they are working five or six
different programs, all with only a little result.
You see a lot of this online, you go into someone's
website and find links to all sorts of other
things, each with a similar pitch. Many people are
addicted to programs the same way a gambler is, but
are successful at very little. Not a reason not to
do it, but a reason to be cautious and investigate
carefully.
4. Restricted
ability to use company logo and name in your own
advertising of their products. If a company
wants you to sell their product, then ties your
hands on being able to use the logo, they are
effectively taking away your best tool for doing
so. It is like telling your child to sweep the
floor, then taking away the broom. Some companies
have limitations on how you can use it, and for
legal reasons that is acceptable to a point, but
others do not let you use it at all (or charge you
a fee to do so!), including limiting unreasonably,
the use of product names, and their company name.
We recommend you avoid companies that do this,
because it becomes almost impossibly hard to
effectively advertise the product. If the product
has a good reputation, you ought to be able to use
the name and logo to market it. If they charge you
extra to do so, then they are counting on making
their money off of your fees, not off of the legit
product.
5. Marketing
strategies which conceal the identity of the
business until you get to the end of the
presentation. This smacks of dishonesty. Not
only that, but it indicates a real problem with the
company's own self-image...I mean, if you know your
company is a good thing, and it is honest, then why
wouldn't you want to use that name as THE
fundamental advertising presence? If it truly is a
great thing, then the reputation that preceeds it
should be a good one, and the name itself should do
half the selling. If you run into companies that do
this, it means that they know that most people who
try the business fail at it, and that people are
more likely to have a negative attitude about it
than a positive one, which is why they hide the
name until the last. You may feel that you can
advertise the products or recruit downline in a
more up front way, but when the company is not
supportive of this, and all sales tools are geared
toward a different approach, you will find it
almost impossible to make headway. You will also be
fighting a negative attitude among your prospects.
It usually ends in discouragement.
6. Affiliate
sites that tell you they know the secret to
making money online, and they have links to 50
different online programs, including other programs
telling you how to make money. If they knew how to
make money, they would focus on what worked, not on
advertising everybody else's systems in hopes they
can sucker you into being their downline. Watch out
for anyone who gives you a link for signing up for
an online business if they have not told you
exactly what you can expect out of it. If they have
tons of links, you can figure that none of them are
really making it for them, and they are still
hoping for one of them to pay off if they push it
hard enough. These are different from genuine
informational sites that use affiliate links as a
means of supporting the site or of increasing site
revenue, the sucker sites don't have any really
useful information in them.
7. Low initial
costs, but high continuing costs for materials and
renewals that suck the profit out of your
efforts. This is pretty common, many "business
opportunities" exist just to see if they can get
money out of you long term, not to help you make
money long term. Look for sales materials that are
provided as an ongoing thing (at a reasonable cost
if they are charged for), renewal costs that are
reasonable and well within what you feel you can
earn. If a company exists just to get the
distributors to support the company by sales to the
distributors, then the company does not have a
product of general interest that you can make money
selling. It also sets you up to be considered a
customer of the company (to get money from),
instead of a partner with the company (to help you
succeed along with them). Companies that do this do
not appreciate the value of their distributors as a
help to success, but see them rather as someone to
take advantage of.
8.
Anyone
who tells you they can tell you how to make money
without doing any work or paying
anything
(either one - they are going to get you
somehow). This one is not something you can live
with, this is a clear mark of an outright scam -
EVERY TIME. Common sense tells us that nobody
will pay you for doing nothing. They can replicate
their website as many times as they want for
themselves and rake in the profits if it really
works - they don't need you unless they can get
something out of you. If they tell you they will
set up a website for you and you don't have to do
anything, it is certainly a scam, and the scammer
is hoping they can get you to abandon common sense
long enough to pay them, or that you will join and
pay them something later in the hopes that if you
pay for the "special" version of the program that
you will actually make something. The net is full
of these types of things, and none of them make
money for anyone but the scammer (you will always
find that their pleas to get you to upgrade are
always carefully worded to avoid promising that you
WILL make more, only that you MIGHT, though they do
a good job of SOUNDING like they are promising
something without ever really doing so). It is just
glorified gambling on the part of the person who is
scammed. If you keep common sense in the driver's
seat you can spot these and not get
taken.
9.
ANY
offer that is unsolicited, or arrives by email,
that you did not specifically
request.
Legit companies do NOT do business that way, this
one also is ALWAYS a scam - NO exceptions. And why
would a total stranger send you an email that they
are looking for a "trusted partner". When they
don't even KNOW you? Common sense again tells
us that you cannot trust someone you do not know!
And common sense should tell you that you cannot
trust someone you don't know, who fished your name
out of an email mass mail list, to deliver on
promises that sound too good to be true. There is a
reason why they sound that way!
10. Signs of
poverty in the website when they are promising you
big earnings. Such things as obvious spelling
errors, poor site layout (or obvious boilerplate
site layout), the site being in free server space,
or using several free services such as Bravenet
mailing lists, etc. If they really had such a
supportive parent company, the parent company would
provide such simple things as a quality site
template, newsletter software, or autoresponder
software. If they really knew how you could make
money, they would be making it too, and they would
at least have a regular domain name. And major
spelling or language errors are a dead giveaway
that something is probably not right. Everyone
makes a mistake sometimes, but if the parent
company is supporting the business, then the
website template would not have obvious errors!
Now, slick design, domains, and expensive web
interactivity are no indication of legitimacy, and
having to operate on a budget is no indication that
a person is fraudulent. BUT, when they are telling
you that you just have to enter your email address
and click here to be rolling in the dough, and
those signs are there, then obviously they are not
making it themselves!
11. The
Questionable Value of Testimonials. In every
single thing that is being sold online by anyone
other than a huge corporation with a
well-established reputation has testimonials. And
every single book that talks about marketing a
"business opportunity" says to put testimonials on
your website. There is a reason why they say that.
Because people read them and think, "Well, if they
said THAT, then it MUST have been good!". Only
consider - Testimonials are totally anonymous. Sure
they have a name below them, but who knows if the
name is real? Who knows if the quote is genuine?
And sometimes, even when it is, there are clues
that ought to tip you off that something is not
right. Like the one that has five testimonials, all
of which say, "I bought your book last night (or
last week) and read it and can tell it is really
going to help me." but not a SINGLE ONE of
anyone who actually USED the advice and stated
that it worked in practice. Sure, you can use
testimonials on your site. I use a few quotes
from people on mine, but I use genuine ones. Things
people have said to me in an email, which
I have asked them if I could quote. And a lot
of times they are abstract, or specific to a
certain circumstance. But I could easily write a
dozen of them if I wished, and I could be
convincing about making each one unique! Be
skeptical about testimonials... Even mine! Because
while they work for sellers, buyers should ALWAYS
be suspicious of raving compliments, especially in
combination with indications that it may be a scam,
or near scam!
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