How To Tell If A Business Opportunity Is A Scam
by Hugh Simpson
In my previous columns I emphasized the importance of finding the right network marketing program for you as well as to be wary of the numerous scams around. Today, I'll delve further into how you verify that a company is legitimate. First off, when you review the headlines for many of the opportunities on the Internet you should become skeptical of those which are unrealistic. Headlines that scream HYPE like: "Earn $5,555 on a $5 Investment in 30 Days!" or "I Will Make You A Billionaire!" or "I Cycled in 20 Minutes Earning $2,000!" are all red flags. If an ad sounds interesting and do-able, as a recent ad for an Internet Mall program I saw, then your next step is to learn more.
When investigating an opportunity, you look to evaluate the products/services, the presentation of the information, the compensation structure as well as the support system. To review these principles I'll use my own research example of the Internet Mall program I mentioned above. After signing up for the program I received my first "Welcome Email" from the President. I explored their site, which I admit was very nicely done. They offered me discounts for buying from companies like Wal-Mart, Office Depot, K-Mart, and hundreds of other "bricks and clicks" companies. Also they had a benefits package if I decided to become a VIP, which included discounts on prescriptions, hotels, cruises, eyeglasses, etc. So far the company's presentation and follow-up looked good. Next, I moved on to evaluate the compensation structure.
The Internet Mall program uses a Straight Line program, which means that every person who signs up beneath me is in my Downline. The program had been encouraging me every day to see how many people had signed up under me who had also decided to take the next step and become VIPs. To keep the pressure on me they gave me only 30 days to make a decision to also become a VIP and have the other VIPs under me. Therefore, 15 days into the 30-day period I decided to check my downline. Well I had 415 VIPs under me. My review of the compensation plan earlier revealed that 415 VIPs in my downline would not put me on the road to millionaire status. In fact I would need at least 5000 VIPs to make really serious money! I was not even close.
To reach 5000 VIPs I would have to recruit every person I spoke to, every person I emailed, and more importantly start a major ad campaign! At this point having reviewed the compensation plan and actually seen the Internet Mall program in action for 15 days, my skepticism was growing but I still thought additional research was necessary. After all, the Internet Mall did say that part of my VIP benefits would be their super duper marketing plan! Perhaps the plan is the key to generating the 5000 VIPs. Now it's time to follow up with the person that would be my upline sponsor. I emailed him the questions outlined below. After each question I've explained why you too should consider asking similar questions about any company you're considering joining.
1) Who are the Founders of this program and what is their track record? (Note: Have you ever noticed in Founder profiles that they state the Founder came from one of the top 10 network marketing companies, however, they NEVER seem to tell you which company it was? Or that he/she was the Executive Vice President of a Fortune 500 company? Which ONE! Is there some law that prohibits them from telling me which company or companies?)
2) In regards to the Compensation Program, of the VIPs under me how many of them remain VIPs for 30 days, 60 days, 90 days, 6 months, and a year? (Note: If I'm going to be putting out $49.95 just to join and $25 per month, I want to know the FACTS! You would think that if this were such a great program then the company would be glad to share their Retention Rate. I, however, NEVER got back an answer to this question!)
3) There are numerous levels in the company that you have to attain before making more money i.e. Bronze, Silver, Gold, etc. I would like to know how many have obtained each level since the company began and the average time it took to reach each level. (Note: The Compensation Plan told me what I had to do. I wanted to know how LONG it should take me if I followed the Marketing Plan. If the average time for obtaining Bronze was 6 months, then I needed to decide if my TIME and MONEY would be better placed in another program. Time is MONEY, especially in these days. Again, I NEVER received a reply for this question!)
4) I saw photos at the site of your Diamond level distributors enjoying a cruise. How many Diamonds do you have in the company currently? What is their average monthly compensation? More importantly can I contact any of them to find out how they are doing? (Note: If you were trying to recruit me for your company, wouldn't you be more than glad to have the Diamonds give me a call! I'm sure that the Diamonds would be glad since I WOULD be in their downline with the Straight Line Program. Guess what - I NEVER got answers for these questions either!)
5) I also asked the upline sponsor to give me his personal marketing strategy. (Note: I received no response. I did learn, though, that my upline sponsor had put his career with the company on hold since he had lost his job. If this program was so wonderful and it only costs $25 per month to receive all these wonderful benefits, then don't you think he would have done every thing in his power to save the $25 per month to stay a VIP! Red flag!)
As you can see from my notes, my final evaluation of the Internet Mall program was a resounding NO! I hope from this example you have gotten the point of this article: Get the FACTS before you spend your TIME and MONEY! Review any new program thoroughly and ask questions of your potential upline sponsor. If he/she doesn't answer you, you might consider moving on. Or if you think further research is worthwhile then keep going upline until you get the information you need to make a decision.
Hugh Simpson and his team have recently launched FastTrackMillionaire.com which is a portal on the Internet for Millionaires In Training coached by Millionaire Coaches through their books, tapes, workshops and subscription chatroom. Download their FREE Weekly Email Course at www.fasttrackmillionaire.com based on the 1912 course taught to America's wealthiest elite.
