"Sell our stuff for profits" Scam?

I have a friend who doesn’t get online and wants to start a business. He showed me a brochure from some company that wants 100 bucks to get him started. IMHO, that’s how the parent company makes money. They don’t care if you ever sell anything. Just get more people to sign up and pay that 100 bucks.

What do you folks think?

Scam

Your friend will most likely either send the money and never hear anything from them again, or will receive a ‘startup pack’ of envelopes that need addressing, or cat5 cables that need terminating or whatever; the senders will make some excuse about the work not being up to standard and refuse to pay out.

Or, he could be getting into some sort of Amway or Cutco knvies (aka Vector Marketing) deal, whereby he has to buy the startup samples. The company then doesn’t care whether he sells anything (well, I suppose they’d prefer he sell, since the company then makes even more money). If this is the case, unless he’s a really motivated person looking to sell the hell out of something, he’ll sell just a few of whatever it is (likely to friends, neighbors, or family) and then stop. Final analysis: waste of money.

I’m thinking it’s more along the lines of what Peepthis said.

A couple of years ago my mom and sister were looking into selling kitchen stuff. A neighbor had a party for them and hit the three of us up to not just buy stuff but get signed up to sell as well. The pots, pans, and little gadgets were outrageously expensive. I told her I just didn’t have time for something like that. She kept stressing that I could make money by signing up other people blah blah blah. The outrageous prices and the 550 dollar startup fee made me figure it’s all somewhat of a scam.

Any company which wants you to pony up cash to start working is a scam. They know you’re bound to fail, and want to get their money ahead of time. I’ve known quite a few people who tried those type of selling “businesses” and evry single one of them failed, and not through lack of trying.

I’ve lost a friend to Amway. In her desperation to sell the products and get her own recruits, she annoyed the bejeezus out of every friend, relative and casual acquaintance she had. Her calls do not get returned.

It’s probably a better idea for him just to find a couple places that sell at wholesale (a business license will probably be required), but from them, and sell. You know, just like all the other retailers. :wink:

There do seem to be some legitimate businesses that operate this way (Mary Kay comes to mind), but many scams too. There are several important questions to ask:

  1. Are the products quality items at reasonable prices? The company might be able to refer him to the nearest distributor so he could inspect the goods in person.

  2. What percent of the company’s revenues come from actual products sold, and what from charges their salespeople pay?

  3. Are salespeople required to buy a minimum amount of the product every month, or can they place orders according to whatever amount they wish?

  4. Do they charge any additional fees, require attending any seminars, or anything else that costs money after you’ve signed up?

If he cannot find those answers before signing up, it’s time to look elsewhere. Perhaps he could head off to the library and look for books on starting a business from scratch.

the internet, you say . . . Quixtar? That’s what Amway calls itself now . . . same principle, but not quite a full-force scam. As in, it’s possible to make money, as long as your friends have a high tolerance for being annoyed to buy $40 worth of vitamins every month (those things scared the hell out of me . . . I peed neon yellow for weeks)

Oh yeah, he may wish to check out this link too!

http://www.mlmwatch.org/01General/10lies.html

Why anyone falls for these “pay me and get rich quick” schemes is beyond me.