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SCAMS
101

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Friends In Business
& Scams 101


Where Does Their Profit Come From?

 
if it's coming from the "opportunity" itself,
you're knee-deep in doo-doo


Most "biz ops" make their profit on the OPPORTUNITY.  Those are the ones you want to stay away from no matter what.  Cut up your credit cards!  Close your checking account!  Have your phone disconnected!  Bribe your mailman to burn your mail!  Move into your bathroom and have your meals stuffed under the door!

DON'T LET YOURSELF BE SUCKED INTO THESE!!....

They are ALL BAD

Even if they aren't outright SCAMS because there really IS a product being sold and a couple of people may actually succeed, they are STILL very bad news, and the vast majority of people will fall flat on their faces.

FIRST LET'S LOOK AT A REAL-LIFE OPPORTUNITY:
A Job At Walmart

"Ick!" you say.

Okay, but humor me.  I actually have a point to make.

So maybe you only start at minimum wage, but you'll be MAKING MONEY from day one, won't you??  There's NO CHANCE you'll lose your life savings by getting a job at Walmart, right??

How does Walmart make its profit?

Do they charge their employees to fill out an application?
Do they charge their employees another fee the first day they report for work?
Do they charge their employees for training?
Do they charge the cashiers for the cash registers or the baggers for the bags?
Do they require their employees to run ads for Walmart?
Do they require their employees to contribute to a "lease pool" to pay for the building?
Do they require their employees to buy a minimum amount of merchandise every month?

None of the above.  If they did, you would probably have to ring up your own purchases when you shop there, because there wouldn't be anyone to do it for you.  They'd all be working someplace else.

HOW CAN THEY AFFORD TO DO THAT???  I MEAN, NOBODY GIVES YOU SOMETHING FOR NOTHING IN THIS WORLD, RIGHT???  THERE'S NO FREE LUNCH, BUDDY!!  YOU CAN'T EXPECT TO LOUNGE UNDER A TREE AND SIP LEMONADE WHILE THE BLUEBIRD OF HAPPINESS POOPS MONEY ON YOUR HEAD, GET IT???

That's what the people who make their profits on "the opportunity" will tell you.  In fact, if you don't "get it," sometimes they'll ridicule you.  They'll make you feel like a bum.  Your parents sure didn't instill "the work ethic" in YOU, did they??

Let's go back to the first question:.... HOW CAN THEY AFFORD TO DO THAT???

Because they make their profit BY SELLING THEIR PRODUCTS. 

They NEED those employees to sell their products.

They don't need their employees' MONEY.... they need their TIME, and they need their SKILLS.

WHY SHOULD IT BE ANY DIFFERENT WHEN A COMPANY IS LOOKING FOR "INDEPENDENT AGENTS" OR "AUTHORIZED DEALERS" TO SELL THEIR PRODUCTS??

THE RIGHT ANSWER:.... It shouldn't be.

THE REALITY:....   It usually is.

Okay, you're going into business for yourself.  Of course you have to buy your own cash register and your own bags, and you have to pay your own overhead.  That makes sense.  But the buck (pun intended) stops here.

You do NOT.... (let's make that, "You SHOULD not").... have to pay the parent company's overhead, buy any of their merchandise for your own use, or pay for their advertising.  And if they tell you otherwise, it's pure poppycock!!  That is nothing more than FINANCING their business for them -- IF they're really in business to sell the product.  More than likely, that was never their priority in the first place.  If each dealer is paying the costs of doing business and then some, they don't need to sell their products at all, do they?  Any profits made from merchandise sold to actual CUSTOMERS.... (who are, after all, the name-of-the-game in any legitimate business).... is pure gravy!

NOW LET'S LOOK AT AN "OPPORTUNITY" I FELL FOR....
NOT ONCE, BUT SEVERAL TIMES

There is a company that I chose not to identify in the original rendition of this article, because in spite of my ugly experience with them, they had been in business for over 14 years and managed to maintain a squeaky-clean reputation.... until that bright sunny day when they closed their doors, leaving dealers everywhere saying, "HUNH??"  (Just so there's no misunderstanding, I was no longer a dealer at that point; they cut me off at the knees when I started publicly questioning their, ummmm, integrity.)

Since this squeaky-clean company simply disappeared off the face of the earth (I support the alien abduction theory) and they can no longer accuse me of wishing them ill....

Ladies and Gentlemen, I take great pleasure in introducing (da daaaaaa)....

Borges Lamont Corporation (henceforth BLC)....

The people behind F.O.N.E.... (or FONE) (gotta make sure the search engines find me).... the amazing "Business In a Box" (now a four-letter word in my book) that promised to make a Closeout Dealer out of me and thousands of others.

I went to a "Work At Home" seminar, and there I bought the F.O.N.E. "opportunity" for a mere $495.00.  Then I obediently paid BLC $60.00 a month for what seemed like an eternity.  WHY??  To find out WHAT they had for me to sell each day.  Does that make sense?  (I know, I know.... but it seemed to at the time.)

Then I went to a SWELL day of training, for which I paid $99.00, and they didn't even buy my lunch.  At that SWELL day of training, they sold me another SWELL opportunity with ANOTHER company called ITGlobal.... only it really wasn't "another" company at all.  It was the same company for all practical purposes (although possibly not legally, who am I to quibble?).  They went by a different name and claimed to be a "separate entity," but they occupied the SAME building, they sold the SAME products, and they were run by the SAME people.  (A simple coincidence, no doubt.)  So I gave them another $495.00

They tried to sell me still ANOTHER opportunity with yet ANOTHER company (Recyclewear, buying and selling used Levis) for ANOTHER $495.00 -- but all my credit cards were used up.  I was SO glad they were.... because imagine my surprise when I found out that as a card-carrying member of ITGlobal, I had full access to Recyclewear.  (Betcha they never would have mentioned that if I'd had a credit card with space on it.)  And imagine my surprise when I found out that the DISCOUNTED price of $495.00 available ONLY to those of us who "cared enough to attend the training".... (the regular price was $995.00 you know).... was not discounted at all, because it had never been sold for more than that, and depending on which seminar ripped you off, you might even have paid less!! 

Okay, so that all seemed a little shady, but this company had a great reputation.  No suits by the FTC.  No BBB complaints.  And with SO MANY successful dealers, I knew it had to be MY problem.  I just wasn't good enough! 

Shortly after that, they came after me again and wanted a mere $1,495.00 for six weeks of personal coaching.  At half an hour per session, that came to $500 an hour.  You don't think I was stupid enough to fall for that, do you???

Uh.... yeah, I was.

"But you said all your credit cards were used up."

Right. 

But lucky me.... at "the training" (perhaps better described as "the sales presentation"), they convinced me to sign up for their "exclusive" charge card which would give me $2,500 credit JUST to build my BLC-ITG-Recyclewear business.... and (just my luck).... the bank accepted me.

Here's another little "neither-here-nor-there" story I can't resist sharing:  They lied about the credit card.  Said it was a special card that could ONLY be used for BLC merchandise.  I found out much later that it was a credit card just like any other.  I could use it to buy dinner.  I could use it to buy a new set of duds.  I could use it for anything I wanted.  Of course I didn't because I maxed it out paying for my personal coaching and buying inventory for my "exclusive product showing" (the surest way to jumpstart your business) at the height of the Christmas shopping season.... the one where gazillions of people went CLL (they Came, they Laughed, they Left) because the prices were so high.... (you know, the prices I slashed to mere pennies over my cost).... but I digress.

Let's get back to the $500-an-hour personal coaching. 

Why did I do it? 

Because I was ignorant.

Because I blamed myself for not being able to succeed in this business up until that point.  (This whole thing is very carefully choreographed.  You're SUPPOSED to feel that way, see??  It's all part of the The Master Plan that so many biz ops depend on.)  I thought if I just had the proper training, I would be able to succeed like SO MANY OTHER SUCCESSFUL DEALERS WERE DOING.  It wasn't until I started the Friends In Business Message Board that I found out TONS OF THEIR DEALERS WERE IN THE SAME BOAT.  (Like most of our links, this one will open a second browser window, so you can look around all you like without getting lost; just close the window when you're ready to come back here.)

THEY WERE SINKING, JUST LIKE ME!  All those "success stories" were just part of the sales pitch!

This M.O. isn't anything unique.  It is TYPICAL of the biz-ops where they make their money by selling "the opportunity"....

I'm sure somebody is succeeding somewhere.... but those people are hard to find.  And what I know for sure is that at least a fair proportion of the people who are NOT succeeding are NOT incompetent, lazy sloths.  They are NOT succeeding because the program is NOT designed to allow them to succeed.... and it is most certainly not designed to HELP them succeed.  The program is designed to sell the business in a box.  The training seminars.  The personal coaching program.  And in this case, those SWELL daily faxes to tell you exactly what you're allowed to buy from them that day.  (Did I mention the one training program I did NOT go for?  I would have had to spend three days in Utah, or they probably would have gotten me.  They wanted $1,695.00 to teach me to sell Premiums and Incentives.)

Now at this little $99.00 seminar I attended, they told us there were 800 dealers in Southern California alone.  (They say it was so so it must be so, isn't that so?) 

Multiply that by $60 a month: 

Holy crap!!  That's $48,000 A MONTH just to COVER THE EXPENSE of sending out a three-page fax to each of these people five days a week. 

This is a great example because it's so obvious.  (Yeah, sure.  So why didn't I think of it??) Many of them aren't so obvious, and I'll go through some others at another time. 

Why did I keep paying the $60 a month for so long? 

That's easy:....  Because their products seemed to be selling.  On Tuesday there were 1,800 TVs available, and on Wednesday there were 22.  So if dealers were buying them, then they must be selling them, which means that I must be doing something wrong.

Right?

Wrong.

You see, their inventory system was screwy.  So screwy you wouldn't believe it.  Their "in stock" charts didn't match their "sold out" charts didn't match their "available" lists didn't match their "daily faxes" didn't match their "phone order department."  Nothing jived.  They were always putting in a great new system to get everything in sync, but the last I heard it was still a mess.  How could this be?  What's so hard about keeping track of how many TVs are in the warehouse?  You just subtract the number sold from the number on hand, right?  Uh-huh.  IF you have the TVs in stock in the first place.  When a bunch of us dealers put our heads together, here's a theory we came up with: Maybe (just maybe) they really don't have these things on hand.  They wait to see how many their dealers commit to, then they attempt to buy them from the source, but by then, they may not have as many left.  How else would you explain the item being "Sold Out" the night before the fax is sent?  That's just a theory, you understand.

Oh, did I remember to tell you that the "closeout prices" on most of these products were so high that you couldn't begin to compete with your local discount stores?  You couldn't even compete with Sears on some things.  It was a joke, and I have an attic full of junk to prove it.  It didn't take long for that realization to poke a big hole in my dream that people would be beating my door down trying to fill out one of those coveted "Wish Lists" so I could be their Personal Shopper..... But you know what??  I kept right on paying.  Why?  Because they told me "other dealers" were succeeding, and because I am an honest person, I often make the mistake of assuming the other guy is being just as honest with me.

THE SOLUTION?

You've got to start thinking like a crook.... or at least give up the fairy tale.

The reality is, there are some REALLY ROTTEN PEOPLE out here, and they'll happily take your last dime.

I HOPE, IN MY RAVINGS, I HAVE GOTTEN MY POINT ACROSS:

What exactly is my point?

I don't know.  I'm trying to remember.  Hang on a minute.

Oh yes.

A legitimate company should be making its profit from the selling its PRODUCT or SERVICE to CONSUMERS.

They are not doing you a favor by ALLOWING you to sell their products.  They NEED you to sell their products.

Training is not a "perk" they should be charging you for (over and above expenses).  If they want you to do your best, then they SHOULD train you.  Otherwise you won't succeed in selling their products, and they won't make any money, right?

Right....

IF they're one of the Good Guys. 

The Bad Guys don't give a hoot if you sell their products.  They already made their money on you when you bought the opportunity and the training and whatever else they had to peddle.

And what's this garbage about "giving you something for nothing"?  I've been cussed out on many a bulletin board when I've warned people against paying through the nose for "opportunities," and that's always the argument they use. 

Exsqueeze me? 

By ALLOWING you to sell their products, and TRAINING you to do the job right -- the company is creating more SALES, reaching a larger MARKET, and selling more PRODUCTS.  Isn't that benefiting them, too?  What, exactly, have they given you "for nothing"? 

(By the way, there are darn few products out there that you can't find a source for on your own -- at least not the kind that are being sold through "biz ops."  So you really DON'T need these rip-off artists in your life!)

"We don't succeed unless you succeed!"

That's what they all say, isn't it?  But that theory bites the dust when you realize that THEY succeed just by selling you the opportunity at an inflated price, the training at an inflated price, sales aids at ridiculously inflated prices.... all that stuff.  THEY succeed.... and you're in hock for the next 20 years.  Or bankrupt.  Or living under a bridge.  (Don't laugh; stranger things have happened.)

(Did you know that at the typical interest rate, if you owe $2,000 on a credit card and make the minimum payments, it will take you 33 years to pay it off?  I just thought I'd add that bit of trivia to brighten your day.)

The ONLY company that is motivated to help you succeed is the company that makes its money ONLY from the sale of its products.  If they don't need to sell their products to turn a profit, all this garbage about "helping you succeed" is just another line of bull.

If they are making their money on products and not on the opportunity itself, they should be overjoyed to have you!!

This is not to say that a company shouldn't charge a "good faith deposit," but it should be refundable within a reasonable framework, and it should be covering expenses.  There are thousands upon thousands of curiosity seekers who send for every opportunity they can find.  They don't do diddly with it.  No company could survive if they sent expensive starter packages and training materials out for nothing to everyone who asked for it.

So look at the numbers.  GIVE YOURSELF TIME!!  A good opportunity will still be waiting for you next week, next month, or next year.  Decide whether the amount of money they want is reasonable, or if it has a hefty profit built in.  If you see their profit comes from the opportunity itself, there's no need to investigate further.  Just move on.  If they actually seem to be concerned with selling their products....

Well, that's the next class.  I'll be back when I recuperate from this one.

Take me back to the Scams 101 Index!

Gather 'round, Kiddies!     

What does "Making a Bundle on eBay" mean to you?  How about spending every waking moment hunting down products, taking pictures, writing listings, and RElisting all the stuff that didn't sell (as in "most of it")?  Oh yes, then there's standing in line at the Post Office for 17 years... and don't forget counting that profit on your ten little toes.

Granted, that's how a lot of people do it (including more than a few Power Sellers)... but that isn't the way smart business owners do it.  Once you learn to write killer ad copy and combine eBay selling with tried & true email marketing techniques (on autopilot no less), you'll have time to actually enjoy some of that money (what a concept!).

                                                          Click here to blow the cork off your eBay business . . . . .


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REFRESH to rotate MAAMAW'S CLICKY NOTES thru this space..... Timely Tips, Best of the Boards & More

PROTECT YOURSELF FROM SCAMS!  Research all business opportunities thoroughly, and never blow off other people's bad experiences.  Ask around (and listen!).  The Scams101 Message Board is a good place to start.  What's that?  You've found a Biz Op and you're wondering if it's endorsed by FIB?...  Not unless it's listed in MaaMaw's Magnificent Toolbox.





Me & Katie
HERE'S WHERE TO FIND ME:

  Lesley Fountain                          Click Here to Send an Email
  P. O. Box 542                                  Phone:  (707) 682-0303
  Fortuna, CA  95540                                          ↓        ↓        ↓

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  in a timely manner.....   PLEASE leave your email address when you call.

Copyright 1998-2007 by Lesley Fountain.  All Rights Reserved.
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SCAMS
101

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