Pyramid
Schemes
by Linda Sikut
Copyright 2002
Are you looking a business opportunity that
looks too good to be true? Be careful, it might be a pyramid scheme or a closed cash
system. There are a lot of "opportunities", especially online that are pyramids
because they don't have a real product. Some try to fake it with "reports" that
you pay for and receive every month, but most of those "reports" are available
free. If the product is something that only a member of your business can use then it's
probably a scheme.
What bothers me the most is that people spend
good money and share this "opportunity" with their friends only to find out in a
few months, more or less, that they've been taken. The company takes their money and folds
and they have lost credibility with their friends. Your good reputation is supported by
the actions that you take. When others see you getting involved with one scheme after
another it affects the way they look at you.
So how can you tell? First check with the DSA. While they are not perfect and have had
a few companies listed that folded, for the most part they are the industry standard. They
have a great article about pyramid schemes on their web site. Then look at the company. How long
have they been in business? Schemes are usually around only a few months to a year, but
some manage to stay in business longer, so be careful. Check with the Chamber of Commerce
and the Better Business Bureau in the city where the company is headquartered. Next look
at the products. Are they products that you can sell to people who are NOT part of the
opportunity? Are they reasonable priced? Any company that does not encourage retail sales
could be a scheme. Is the main focus recruiting? Do make money when you recruit others?
That is illegal so by pass that one. The bottom line question to ask yourself is "Can
the last person in make money?. If the last person in can still sell to those who said no,
then it's not a pyramid. But if the last person in can't make money because there is no
one left to recruit RUN! It's a pyramid scheme or money game.
If you want to investigate further, here are
some web sites that will help you in your search.
Federal
Trade Commission
Mazu Publishing
MLM Survivor
MLM Watch
World Wide
Scam
Linda Sikut owns http://www.bakingabusiness.com which is
filled with free recipes, contests, free printables, articles & more
Newsletter: mailto:bakingabusiness-subscribe@yahoogroups.com
You have permission to freely use this article as long as you include this
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