How to Avoid Getting Ripped Off By Dishonest Home Based Business Companies
In this short space we cannot list every possible scam under the sun, but you will be alerted to the general things to watch out for.
You will be able to recognize the red warning flags that will indicate that you should be careful.
One thing to keep in mind is that there are different definitions and opinions regarding the concept of a scam in general, and a home based business scam, in particular.
1.
Selling Products and Services vs Selling Chance.
For instance, there are some multilevel marketing companies that sell real products.
They have some distributors who make a lot of money.
However, there are a lot of disgruntled former members who will tell you that the company is running a scam.
The truth is there is a lot of gray area on this subject matter.
For instance, a classic example of a scam is a pyramid scheme, where you trade in "chance", there are no products being sold.
You pay money just to get in a "matrix" and then you recruit others who pay just to join under you.
2.
Large Upfront Registration Fees.
Most business scam companies demand a large fee upfront as registration fee that is usually non-refundable.
The registration fee is explained away as the company trying to determine how serious you are to join the company.
It is interesting to note that when you apply for a job, the company doesn't demand anything upfront to prove your interest.
3.
The Nature of the Company.
You need to understand the company and its operations before joining to ensure that the company is not just a pyramid scheme.
This is often confused with MLM (multilevel marketing), also referred to as, network marketing, but there is a big difference.
In MLM there are real products that are sold.
When you buy them, you receive value from them.
When you refer others, they do not pay for their position in a matrix.
They simply commit, like you, to buying products, usually on a monthly basis.
4.
The Company's Owners and Officials.
The truth is, many MLM companies are set up for most people to fail.
It is called, breakage.
The owners of the company make money, as well as a handful of "heavy hitters.
" Yes, there are actual products, which makes the organization legal, but for most of the members, it could very well be considered a home based business scam.
That is because the intent is not for everyone to be able to make money.
It is designed to get newcomers excited about getting rich, so they will pay a significant one-time registration fee that could easily run into the hundreds of dollars.
They are willing to do this, because they know for every person they get to join under them, they will get a portion of their registration fee, as a payment known as a fast action bonus.
The best way to avoid this kind of home based business scam is to make sure that any company you join does not require a large fee just for becoming a member, they should have great products that you would buy even if you were not trying to make money, and the price should be competitive with the free market.
Also ensure that the owners and officials are serious business people and not con artists.
You will be able to recognize the red warning flags that will indicate that you should be careful.
One thing to keep in mind is that there are different definitions and opinions regarding the concept of a scam in general, and a home based business scam, in particular.
1.
Selling Products and Services vs Selling Chance.
For instance, there are some multilevel marketing companies that sell real products.
They have some distributors who make a lot of money.
However, there are a lot of disgruntled former members who will tell you that the company is running a scam.
The truth is there is a lot of gray area on this subject matter.
For instance, a classic example of a scam is a pyramid scheme, where you trade in "chance", there are no products being sold.
You pay money just to get in a "matrix" and then you recruit others who pay just to join under you.
2.
Large Upfront Registration Fees.
Most business scam companies demand a large fee upfront as registration fee that is usually non-refundable.
The registration fee is explained away as the company trying to determine how serious you are to join the company.
It is interesting to note that when you apply for a job, the company doesn't demand anything upfront to prove your interest.
3.
The Nature of the Company.
You need to understand the company and its operations before joining to ensure that the company is not just a pyramid scheme.
This is often confused with MLM (multilevel marketing), also referred to as, network marketing, but there is a big difference.
In MLM there are real products that are sold.
When you buy them, you receive value from them.
When you refer others, they do not pay for their position in a matrix.
They simply commit, like you, to buying products, usually on a monthly basis.
4.
The Company's Owners and Officials.
The truth is, many MLM companies are set up for most people to fail.
It is called, breakage.
The owners of the company make money, as well as a handful of "heavy hitters.
" Yes, there are actual products, which makes the organization legal, but for most of the members, it could very well be considered a home based business scam.
That is because the intent is not for everyone to be able to make money.
It is designed to get newcomers excited about getting rich, so they will pay a significant one-time registration fee that could easily run into the hundreds of dollars.
They are willing to do this, because they know for every person they get to join under them, they will get a portion of their registration fee, as a payment known as a fast action bonus.
The best way to avoid this kind of home based business scam is to make sure that any company you join does not require a large fee just for becoming a member, they should have great products that you would buy even if you were not trying to make money, and the price should be competitive with the free market.
Also ensure that the owners and officials are serious business people and not con artists.