By some estimates, the number of people who will be working as freelancers is expected to blossom in the upcoming years. While "freelancing" is a more general term, many people will earn a living in various ways from the comfort of their homes.
For some, web design, marketing and writing will provide nearly all of their income. Unfortunately, for many, they will get tied up in a scheme that over time will cost them time, money and damage their credibility.
Now don't fall into the trap of thinking that all MLM's are bogus. In fact, some companies such as Avon, Electrolux, Tupperware all have been called Multi Level Marketing Opportunities. Some of these companies (like Avon) have been around for nearly 100 years and have thrived with a sales force of independent sellers. Another company that most of us are familiar with, Fuller Brush (later Stanley Products) was also a "door to door home workers distributor". So, no, not all of these are bad and many of them provide a legitimate product, some opportunity and don't tend to make exaggerated claims. But if they only ALL operated on that premise, we'd be far better off.
Unfortunately, the Internet has made it far easier for these companies to recruit unsuspecting people into their folds and create bogus claims of earning potential. Follow me.....
Do people really fall for this? When warning flags should be seen
I am always amazed that people can fall for any type of an internet scam, but I'm even more amazed when I see something that is so blatantly dishonest that it just jumps off the page and screams at you. This was my first impression when I landed on a page while doing research for another project.
So here's the words I saw "I was tired of working long hours and living paycheck to paycheck. I started this business part time around my job and in my first month I made over....." and while it suggests you go to the next page for more information, there isn't a next page to go to.
Now that in itself is probably NOT that big a deal, but I can never help myself. I take great pride in calling out Internet work at home scams and cons and when I saw this one I took my usual steps to see whether or not any of these claims would hold up.
Letting the facts speak for themselves
I don't want anyone saying later that I didn't do my homework! Below, you will see the image that contains the quote I used above as well as an income disclaimer that I took off one of the sites. Now the income disclaimer was run through Copyscape and I found it on over 100 websites.
What that tells me
What the 100 plus Copyscape matches tell me is that this disclosure is being used over 100 times. VERBATIM! Now I'm not stupid, I know that any site that is offering an opportunity to make money from home needs to have disclosures on it. But this one specifically reads (and this is a direct quote):
The incomes listed are verified and real, however the incomes depicted above are representative of some of the most successful participants and the majority of individuals earn less. These figures should not be considered as guarantees or projections of your actual earnings or profits. While most participants do not generate a profit, of those active leaders that do, 78% averaged earnings between $938 and $1,597 for 2013. Your success in this method results only from successful sales efforts, which require hard work, desire, diligence, leadership and talent. See the detailed income disclosure here.
Now that's pretty darned specific isn't it?
So, while this looks like it COULD be a legitimate MLM opportunity, when you start getting into doing some of the research necessary to make an informed decision you will be scared to death of what you find.
Earnings potential: How would you feel about signing up with an MLM and then finding out you have only a 30 percent chance to be one of the fortunate ones that really makes any money? This particular MLM in 2013 states that 70 percent of their distributors earned NOTHING. NADA. Not a single red penny.The fact of the matter is that you could earn more money by adding ONE quality blog post to your existing blog and you could make more in a year than nothing!
- Specialized products: Unlike Stanley Home Products, Avon and yes, I'm going to say it, even Amway, the products this particular company offers are somewhat specialized. They are not home cleaning products, makeup, vitamins or even home tools like brooms and mops. At one time, they were even gone after by the FTC for making false product claims.
- Recruiting matters: All MLM "lines" do better when there is depth in the line for the simple reason is there are more sales. However, when the top of the line does nothing but recruit, it's not too long before the chain collapses. This particular company really does depend on recruiting efforts as you can see by the number of various company names who are actually representing the same exact product.
- Complaints matter: When a company is averaging nearly one complaint a month (see the BBB summary) then it's a pretty good guess you are going to run into problems. Why would anyone put themselves on the line like this?
Heed the SEC warnings
Pyramid schemes are not that uncommon and in fact they are typically called out by the Securities and Exchange Commission. Here's what they say:
Pyramid schemes masquerading as MLM programs often violate the federal securities laws, such as laws prohibiting fraud and requiring the registration of securities offerings and broker-dealers. In a pyramid scheme, money from new participants is used to pay recruiting commissions (that may take any form, including the form of securities) to earlier participants just like how, in classic Ponzi schemes, money from new investors is used to pay fake "profits" to earlier investors. Recently, the SEC has sued the alleged operators of large-scale pyramid schemes for violating the federal securities laws through the guise of MLM programs.
Source: Investor Alert Bulletins
They also warn people about falling for supposed "Pyramid Schemes" where no real products exist. Now in the case of the company I've been talking about here, there IS a product but that doesn't make it legitimate.
So what's the end game
You will note that I have been extremely careful to NOT mention the name of the company in this writeup and that was intentional. I have no intention of naming them because I do not want people actually giving them any more air to breathe than they already have.
Before you get hung up with any MLM make sure you check out a number of things:
- Company history - check it out and make sure they have a good reputation. It's not hard to do, run a Google check for "NAME: Company History" and you will get some answers.
- The FTC - check out FTC Commission Actions to see if the company is or has been investigated. It can't hurt you and it may help you.
- Reputable websites - in addition to checking out the BBB, take a look at sites like Truth in Advertising and others of a similar nature.
Making money online is HARD and without hard work and a substantial effort, most people will fail. However, that does not mean you have to get caught up in a work at home scam and lose money on top of everything else.
