This is gonna hurt a lot of people’s feelings, so let me apologize upfront.
By the way, if you missed the previous lesson, you can take a gander at it over here.
When I see people say this thing or that thing is a pyramid scheme, I see that a lot of people are terribly misinformed.
Some people want to paint all home businesses and make money from home opportunities as Ponzi schemes and scams.
Lack of knowledge.
The fact of the matter is that some people don’t think it’s possible to start a business or make money from home. So anything that falls within that realm must be a scam to them.
If these people could just do a little investigation on their own – a little due diligence they would find that is not the case at all.
What’s Old is New
People working from home is nothing new. Think of a seamstress who does work on the side from home. What about the neighborhood mechanic or the person who sells home-baked goods or crafts from their home.
Go back into your childhood and try to remember the people in your life (family, friends of your family, teachers, etc…) who sold things or made things from their homes. Can you remember who they were and what they sold?
For me it was my grandma’s friend who made liquid homemade remedies that tasted god-awful! Then there was the mom of one of my childhood friends who sold Jafra Cosmetics from home.
Think about AVON – it’s been around for over 100 years! It’s always been a direct sales kind of business and the reps have not been required to rent an office space or have a storefront for their business – it’s home based unless the rep is out and about peddling brochures or products.
The Home Business Boom
Although home businesses are not a new concept, they have greatly exploded over the past 15 years – especially as more and more people are:
*Struggling to get ahead financially
*Tired of wasting time in commuter traffic
*Sick of their bosses and gossiping co-workers
*Wanting to create a better lifestyle for their family or spend more time with the family
These people are looking for an alternative to that job they hate going to everyday. They want to find a way to make a living from the comfort of their homes and ditch that commute. In fact, you’re probably looking at an SFI business because you want to find that “job” alternative that can pay your bills (and then some) and get you more time freedom with your family. Is that right?
When the demand for more opportunities goes up, quite naturally there will be an uptick of people who have less-than-honest intentions and take advantage of these opportunity seekers.
And that brings us to…
What Really is a Pyramid Scheme?
I’m gonna give you the frank and to the point definition of what a pyramid scheme is without all the fluff, filler, and nonsense that I see all to commonly with definitions on supposedly “reputable” websites.
But first here is a good to the point definition of how a pyramid scheme differs from a legit MLM. After you read that article above, let me tell you that even that article misses the mark BIG time.
Let me give you the simple explanation and the two biggest REAL red flags you have to look for:
Red Flag #1 – There is not a product or service involved. In other words, you’re basically selling “air” i.e. nothing. Do NOT join a business opportunity that does not tell you and show you what you would be selling (marketing) before you join.
The Biggest Ponzi Schemes and Scams Are Not in the Home Business Industries
The truth of the matter is that the financial and mortgage industries are ripe with schemes. The reason being is that papers can be doctored very easily. In fact, I was a victim of mortgage scam many years ago. In these particular industries you don’t need to produce a physical product. Think of how Bernie Madoff pulled off his schemes for years.
Red Flag #2 – There is NO viable product or service. In other words, would a reasonable person by that product at the price-point it is selling at. There have been countless biz opps that have produced sub par products and then built a lucrative (for the seller) compensation plan around it.
Some of these companies that operated like this either got shut down, went out of business, or were forced to produce better quality products and/or change their mode of operation.
Whatever business you decide to join, make sure the product(s) have value and that real people (not just the distributors themselves) are willing to buy the products(s) at the price-point it is selling for.
In that BBB article above, there are some good tips, but the main red flags you should look for foremost are those two listed above. If you get these two right, you’ve won over half the battle to not becoming a scam victim.
Is SFI a Pyramid Scheme?
If you checked out Tripleclicks, you’ll see everything from dresses to electronic gadgets, to pet accessories to supplements and everything else in between is being sold there.
Do real people buy these types of items?
Well of course yes. If they’re Amish – probably not. (This is a joke people!)
SFI has broad mass appeal.
The type of product you’d find in a typical network marketing company is very nichey.
In other words, the average person is not likely to be a buyer of those kinds of products. Think $200.00 face creams, $120.00 exotic jungle juices.
You really have to be a marketing whiz or hang out in all the right spheres of influence in order to sell these kinds of products. Which is why distributors in these types of companies have a really hard time selling (retailing) their products – and so they focus on recruiting.
The FTC isn’t happy about this and in fact has come down hard on companies like Vemma and others like it that puts its entire focus on recruiting and not on the sales of its products (that’s according to the FTC). I’m not picking on Vemma, it just so happens that they became the “poster child” (courtesy of the FTC) for what not to do in network marketing.
Here’s the lesson…
If you’re going to join a network marketing company, pick a company that has products that you know for a fact that you could sell (retail). In other words, find products with mass appeal – it will make your “job” a whole lot easier.
One of the biggest reasons why SFI had done so well with its Tripleclicks platform is that it has everyday products that average people use.
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