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A Home-Based Business Online
Practical home business ideas, strategies
and resources for the work-from-home
entrepreneur
Issue 109 : November 19, 2001
Sent to 11,872 Opt-In Subscribers
Editor: Elena Fawkner
Publisher: Fawkner Publishing
http://www.ahbbo.com
Contact By Email
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IN THIS ISSUE
1. Welcome and Update from Elena
2. Home-Based Business Idea of the Week - House Sitting
Registry
3. Feature Article - A Pyramid By Any Other Name Will
Still Come Tumbling Down
4. Surveys and Trends
5. Motivational Tip for the Day
6. Advertise with AHBBO
7. Subscription Management
8. Caveat Emptor
9. Contact Information
1. Welcome and Update from Elena
Hello again and a warm welcome to all the new subscribers
who have joined us since the last issue.
I spent a good deal of time this week playing with one of
those "wealth creation" opportunities you see advertised
from time to time (all the time, actually) as fodder for this
week's article. It was, of course, nothing but a classic
pyramid scheme but it's amazing how many people fall prey
to them no matter how many times they're warned. That's
what this week's article is about. Pyramid schemes, how
they work, why they never work (except for the promoters
at the very top of the pyramid) and why you should run for
the hills rather than invest your hard-earned money in them.
In the same vein, I received no less than six Nigerian
scam emails this week. Seems like they're doing the rounds
with a vengeance again. PLEASE, if you're new to the
Internet and you get an email from someone somewhere
on the other side of the world who's made a fortune
skimming on government procurement contracts and asking
you for your bank account details so he can park his
millions of US$ in your account in exchange for a fee of US$1m
or more, don't do it. It's a scam. Your account will be wiped
out.
Watch out for the latest variation too. Purports to be
from the widow of some prominent South African wanting
a way to launder her late husband's cash.
As always, thanks for reading and I hope you enjoy this
week's issue.
Remember, AHBBO is for YOU! If you have comments or
suggestions for topics you would like to see addressed, or
would just like to share your experiences with other
subscribers, I want to hear from you. Please send
comments, questions and stories to Contact By Email .
Dear Mom...This is a letter from my heart to yours.
I'm a mom with three kids. I know what it feels like to
have to work outside the home and feel torn between your
need to work and your need to be with your kids. Now I
found a way to make money at home and be there for them.
I want you to be able to find it, too. Please...read this now.
http://www.adminder.com/c.cgi?PDIMarketing&ATC24
2. Home-Based Business Idea of the Week - House Sitting
Registry
If you're a renter, what's the hardest part of buying your
own home? Saving the downpayment. It's tough to do when
your salary is being spent on rent and other living expenses.
If you don't have much of a surplus, saving for that
downpayment can take forever.
If you're a homeowner, what's the hardest thing about going
on extended vacation? Worrying about your house, garden
and pets while you're gone.
Here's where your business can come in. A House Sitting
Registry basically brings these two groups together. Many
renters, instead of paying rent every month, would prefer to
house sit in someone else's home and save that rent towards
a deposit. In exchange for free accommodation, the renter
takes care of the property, tends to the plants and looks
after the owner's animals. The renter's only expenses are
utilities and food.
Home-owners, naturally enough, are going to be concerned
about exactly who it is who's going to be living in their house
for the next six weeks. For this reason, it's vital that your
sitters come with sterling references. Of course, once that
sitter's first assignment is complete it becomes a whole lot
easier because the home-owner can provide a reference and
you can provide a reference based on the first experience
and away you go.
Your income from this business comes from the sitter. The
sitter should pay you a membership fee for a certain period
of time, say one year. I've seen membership fees of around
$250 per year. You allow home-owners to list their property
for free.
If you're interested in learning more about this business idea,
I suggest you visit the Australian House Sitters site at
http://www.housesitters.com.au. It's an excellent example
of how this idea can work in practice.
-----
There are many more ideas like this at the AHBBO Home Business
Ideas page at http://www.ahbbo.com/ideas.html with more being
added all the time.
STEPS FOR SUCCESS THE SIX HABITS OF HIGHLY SUCCESSFUL
WEBMASTERS
"The Most Powerful Direct Response Marketing Site on the web
today!" This site contains Marketing Techniques, Tips,
Strategies, and Everything you could ever need to make money
from home! FREE - No Obligation. I will show you how to make
THOUSANDS Per Week just by visiting
http://6habits.com/4201/indexc.htm
3. Feature Article: A Pyramid By Any Other Name Will Still
Come Tumbling Down
© 2001 Elena Fawkner
"Three Days, Three People, Retire in 30 days!
Make no mistake, People will start BEGGING you to sponsor
them in!
Take a look at this Income Projection Chart:
Level | # of Days | # Benefactored | Income Projection
1 3 3 $70
2 6 9 $130
3 9 27 $290
4 12 81 $660
5 15 243 $1520
6 18 729 $3520
7 21 2,187 $8160
8 24 6,561 $18,880
9 27 19,683 $43,520
10 30 59,049 $99,840
11 33 177,147 $227,840
12 36 531,441 $517,120
13 39 1,594,323 $1,167,360
Days add up in a hurry and so does your downline!"
OK people ... I know how tempting this looks but REALITY check
time. This is but one example of a number of "wealth generation
programs" currently being touted online. The idea is that you
must find three people who want to join this program, you pay
$20 to "benefactor" each of them into the program (for a total
"investment" of $60) and you're set for life. Oh, and you have
to do it in three days. Each of your three, if they are to remain
in the game and thereby derive the same wondrous riches from
the program as you, must also find three people, benefactor
them into the program (again within three days) and their
three must find their three in three days and so on.
And, because non-performers are booted from the program,
so the theory goes, the only people getting paid are the
ones actively benefactoring in their own recruits, each of
whom down the line contributes their "investment" of $60.
THE "PRODUCT"
The product each person gets for their $60 (because this is
NOT, of course, a PYRAMID SCHEME - banish the thought!) is:
"Software entitled "Building an MLM Empire using the Internet",
in which you Own Full Licensed Retail Rights to Market the
software. Retail Value $29.95 All Sales Are Final-No Refunds!"
OK, three points on the "product".
First, your investment is $60. The product is worth (let's give
them the benefit of the doubt) $29.95. HELLO!? But you get
RESELL RIGHTS!, I hear you protest. That makes it more
valuable than just the purchase price of the product itself. Oh
yeah? Well, you HAVE to be able to sell the product otherwise
the whole scheme ... er ... program would be nothing more than
a wealth distribution arrangement wouldn't it? And that's
against the law, and we couldn't have that.
Second, this is not "software", it's an e-Book.
Third, the title of the e-Book deviously and insidiously implies
a relationship between this "wealth creation program" and MLM
(multi-level marketing). MLM is a different thing altogether.
For a more detailed explanation of what MLM is and what it is
not, read "Not MLM! ... Why ever not?" at
http://www.ahbbo.com/notmlm.html .
'WEALTH CREATION' PROGRAMS
OK, so what about these "wealth creation programs" then?
Sounds like a great idea, right? Everybody wins! Well, think
about this ... if everyone goes out and gets three people who
each have to throw $60 into the pot for their three, everybody
up and down the line has effectively contributed $60 and that's
all there is in the pot. How do you get more than your $60
back?
Ahah! you cleverly point out, those who don't recruit ... er ...
"benefactor in" ... er ... SELL (yeah, that's it, SELL) the "product"
to their three gets dropped, don't they, so now the $20 their
benefactor contributed for them to join the program is still in the
pot but they're not. They've forfeited their investment. THAT'S
how we make money.
OK! Very good. I can see you're paying attention.
Just one, teensy little problem with this brilliant plan.
It's B.S.. It's a pyramid scheme and it's ILLEGAL.
PYRAMID SCHEMES VS. LEGITIMATE MLM
In her prepared statement to the International Monetary Fund's
seminar on "Current Legal Issues Affecting Central Banks" in
May 1998, Debra Valentine, General Counsel for the U.S. Federal
Trade Commission, had this to say about pyramid schemes:
"What is striking about these schemes is that while they are
very old forms of fraud, modern technology has vastly
multiplied their potential for harming our citizens. The Internet
in particular offers pyramid builders a multi-lane highway to
world-wide recruits in virtually no time.
"What is a Pyramid Scheme and What is Legitimate Marketing?
"Pyramid Schemes now come in so many forms that they may
be difficult to recognize immediately. However, they all share
one overriding characteristic. They promise consumers or
investors large profits based primarily on recruiting others to
join their program, not based on profits from any real
investment or real sale of goods to the public. Some schemes
may purport to sell a product, but they often simply use the
product to hide their pyramid structure. There are two tell-
tale signs that a product is simply being used to disguise a
pyramid scheme: inventory loading [recruits are forced to buy
more product than they could possibly sell] and a lack of
retail sales [sales are made only between people inside the
pyramid, not to the public in general - sound familiar?]. ...
"[P]yramids are quite seductive because they may be able to
deliver a high rate of return to a few early investors for a
short period of time. Yet, .. pyramid .. schemes are illegal
because they inevitably must fall apart. No program can
recruit new members forever. Every pyramid .. scheme
collapses because it cannot expand beyond the size of the
earth's population. [Footnote 3: "Assume a pyramid scheme
in which each person recruits 10 new people. There would
be one person at the top, 10 beneath her, 100 beneath them
and so forth. The pyramid would involve everyone on earth in
just 10 layers of people with one con artist on top. The
bottom layer would have more than 4.5 billion people."]
When the scheme collapses, most investors find themselves
at the bottom, unable to recoup their losses.
"Some people confuse pyramid .. schemes with multilevel
marketing. ... [U]nlike pyramid .. schemes, MLM's have a
real product to sell. More importantly, MLM's actually sell
their product to members of the general public, without
requiring these consumers to pay anything extra or to join
the MLM system. MLM's may pay commissions to a long
string of distributors, but these commissions are paid for
real retail sales, not for new recruits."
Now consider how our "wealth distribution program" above
works. Which is it, do you think? Pyramid scheme or MLM?
Bzzzz ... time's up. All who think it's a classic pyramid go
to the top of the class.
FEDERAL TRADE COMMISSION GUIDELINES
Not surprisingly, the U.S. Federal Trade Commission ("FTC")
pays close attention to so-called MLM's that are, in reality,
nothing more than pyramid schemes. It regularly prosecutes
the promoters of such schemes, obtaining injunctions and
orders freezing the assets of the promoters to be applied
in redress of victims. If you knowingly participate in a
pyramid scheme, you too can be named as a defendant in
such an action.
Bear in mind that as a distributor (whether you're participating
in a legitimate MLM program or an illegal pyramid scheme),
you're legally responsible for the claims you make about the
company, its products and business opportunities. It is no
defense that you're merely rehashing the same old
representations made to you by the company. The FTC can
require you to verify the research behind any claims you make.
For more on the subject of representations and your
obligation to be able to back them up, read "Not Just Six Lines ...
65 Characters" at http://www.ahbbo.com/adsftc.html .
In addition, if you solicit new distributors, heed the FTC's
warning in its Consumer Alert, "The Bottom Line About
Multilevel Marketing Plans": "You are responsible for the claims
you make about a distributor's earnings potential. Be sure to
represent the opportunity honestly and avoid making
unrealistic promises. If those promises fall through, remember
that you could be held liable."
Finally, here's the FTC's tips for evaluating a multilevel
marketing opportunity:
"1. Avoid any plan that includes commissions for recruiting
additional distributors. It may be an illegal pyramid. [And,
by the way, calling it "benefactoring" won't help. Just a
handy hint ...]
"2. Beware of plans that ask new distributors to purchase
expensive products and marketing materials. These plans
may be pyramids in disguise.
"3. Be cautious of plans that claim you will make money
through continued growth of your downline, that is, the
number of distributors you recruit. [Don't take this tip out
of context - by definition, the more people you have in
your downline, the more you'll legitimately make in MLM.
What the FTC is saying here is to watch out if the plan
rewards you for recruiting per se, rather than paying you
a commission on sales of product to the general public
generated by your downline.]
"4. Beware of plans that claim to sell miracle products or
promise enormous earnings. Ask the promoter to
substantiate claims.
"5. Beware of shills - "decoy" references paid by a plan's
promoter to lie about their earnings through the plan.
"6. Don't pay or sign any contracts in an "opportunity
meeting" or any other pressure-filled situation. Insist on
taking your time to think over your decision. Talk it over
with a family member, friend, accountant or lawyer.
"7. Do your homework! Check with your local Better
Business Bureau and State Attorney General
about any plan you're considering - especially when the
claims about the product or your potential earnings seem
too good to be true. [Don't rely too much on the BBB
though - companies pay to be listed with them so they're
not as authoritative and independent as they seem. Asking
whether they have complaints on file about your particular
program is worthwhile, however.]
"8. Remember that no matter how good a product and how
solid a multilevel marketing plan may be, you'll need to
invest sweat equity as well as dollars for your investment
to pay off."
By testing any opportunity against the above tips, you'll
go a long way to ensuring that what you're getting yourself
into is a legitimate MLM program and not an illegal pyramid.
Probably the best gut check of them all though is the good
old "if it sounds too good to be true, it probably is".
Hmm ... $1.1m in 39 days for an investment of $60 ...
somehow, I JUST don't think so ...
------
** Reprinting of this article is welcome! **
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------
Elena Fawkner is editor of A Home-Based Business Online ...
practical home business ideas for the work-from-home
entrepreneur. http://www.ahbbo.com
Yes, we want to ... yes, we CAN work from home.
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4. Surveys and Trends
© 2001 Ryanna's Hope
=> WONDER IF WE CAN SELL ICE CREAM "ONLINE?"
Euro RSCG Worldwide surveyed US internet users about how
their attitudes and behaviors changed roughly 40 days after
the September terrorist attacks. The report covers everything
from eating patterns (about one-fifth of men and women are
consuming more ice cream) to fears (47% of men and 43% of
women "worry that terrorists will tamper with our water supply").
Both genders report accessing the internet more often for
current events information.
=> THEY MAY BE ONLINE, BUT THEY'RE NOT THE ONES BUYING
Andersen Consulting and Online Insight report that the number
one myth in online marketing is to target the youth. The report
states that, in reality, 10% of the population accounts for 70%
of spending -- 44% of online buyers are over 35 years old and
36% are over age 25.
=> LOOKING TO SELL ANY OF THESE?
According to Business 2.0, the following poll was taken from
about 500 readers who voiced their opinion in regard to online
markets.
Which of the following online markets is most DOOMED TO FAIL?
Grocery delivery - 204 (46%)
Car sales - 82 (18%)
Online apparel sales - 126 (28%)
Entertainment programming - 29 (6%)
=> WHY PEOPLE ARE BUYING FROM T.V.
When a recent survey sought to find out why people bought
from television, the results resembled those of 1998. The
results indicate that lack of availability elsewhere (LOA) and
convenience were the primary reasons that people purchased
from television.
"Demonstration" came in as the third most popular reason
people bought from television, while price actually dropped to
the No. 5 spot.
------
WANT MORE?
Ryanna’s has published over 45 business articles nationwide
for the home entrepreneur. You can obtain free info about their
offer of “Cash Making You’ve Never Seen...” and you can
obtain free ebooks and other articles at their site. Subscribe to
their free ezine “Surveys and Trends For Entrepreneurs” too!
Go to: http://home.sprintmail.com/~rypublish/
How One Man Turned An Unprofessional, Home-Made
Website Into Over $100,000 In Profits Last Year ...
And How You Can Too!
http://www.roibot.com/w.cgi?R5469_iie
5. Motivational Tip For The Day
© 2001 Jan Tincher
Remember the old adage: Success is the result of good
judgment, good judgment is the result of experience, and
experience is often the result of bad judgment.
Do you learn from your mistakes or do you agonize over
them? Whatever you focus on, you attract. What are you
focusing on? Why not focus on the times when you made
good judgment?
-----
Learn unique strategies and techniques for personal success
from Jan Tincher online at
http://www.TameYourBrain.com/subscribe.htm
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8. Caveat Emptor
Although all of the information presented in AHBBO is
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9. Contact Information
Elena Fawkner, Editor
A Home-Based Business Online
Contact By Email
http://www.ahbbo.com
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