Page 29 - Biz X Magazine - October 2015 Edition
P. 29
BIZ Direct Sellers Warn 1 What are the start-up costs? If they are
BITS Against Pyramid Scams substantial, be careful! Legitimate companies
want to make it easy and inexpensive for you
to start selling their products and services.
2 Will the company buy back inventory? If
not, then you could be stuck with a roomful
Each year, thousands of people take on there would have to be a never-ending supply of unsold and unsaleable inventory. Members
the exciting challenge of starting their own of new participants. In reality, however, the of the Direct Sellers Association adhere to a
home-based business. But many are drawn supply of participants is limited, and each strict Code of Ethics, which requires, among
in by illegal marketing scams known as new level of participants has less chance of other things, that unsold inventory be bought
“pyramid schemes.” recruiting others and a greater chance of back should you decide not to continue.
Ken Mulhall, President of the Direct Sellers losing money. 3 Does the company have substantial sales
Association of Canada (DSA), notes many of Pyramid schemes will typically charge to consumers? If the answer is no, then don’t
these frauds are disguised as investment clubs, high “entrance fees,” possibly buried in get involved. Multi-level marketing, like any
with a get-rich-quick approach to investing. the cost of a starter kit or as investment in other business, depends on sales and service
However, he adds, others are masquerading start-up inventory; or for training or other to consumers. Pyramid schemes concentrate
as legitimate direct sales firms and multi-level services. These schemes will concentrate on making most of their money from you and
marketing companies. on the importance of “recruiting” others to other new recruits.
Mulhall says legitimate companies, like achieve high profits. Often, little or no focus “Don’t let anyone rush you into making
those who belong to the DSA, concentrate is placed on the product or service they may a decision,” says Mulhall. “An opportunity
on selling worthwhile products and services claim to represent; or on the subsequent sale to build your own business in multi-
at competitive prices, usually through party of these products and services to customers. level marketing and direct sales won’t
plan, one-on-one demonstrations, and other “Pyramid schemes seek to make money disappear overnight.”
personal contact arrangements as well as quickly from you,” says Mulhall. “Legitimate He adds people shouldn’t be afraid to ask
Internet sales. These corporations provide a multi-level and direct sales firms want to questions about the company, its products
popular and low-cost way for people to set up make money with you as you build your and services, the start-up costs, and the
their own small business. business, and theirs, by selling consumer average earnings. Any company which
Pyramid schemes, on the other hand, products and services.” refuses to answer those questions should be
are illegal scams in which large numbers Mulhall says people thinking of starting avoided, he concludes.
of people at the bottom of the pyramid pay their own home-based business in direct To learn more about this issue and
money to a few people at the top. In order sales or multi-level marketing should ask other matters on direct selling visit the
for everyone in a pyramid scheme to profit, themselves three important questions . . . website: DSA.ca.
29
BIZ X MAGAZINE • OCTOBER 2015
BizX2015OCT52.indd 29 2015-09-29 10:02 PM
BITS Against Pyramid Scams substantial, be careful! Legitimate companies
want to make it easy and inexpensive for you
to start selling their products and services.
2 Will the company buy back inventory? If
not, then you could be stuck with a roomful
Each year, thousands of people take on there would have to be a never-ending supply of unsold and unsaleable inventory. Members
the exciting challenge of starting their own of new participants. In reality, however, the of the Direct Sellers Association adhere to a
home-based business. But many are drawn supply of participants is limited, and each strict Code of Ethics, which requires, among
in by illegal marketing scams known as new level of participants has less chance of other things, that unsold inventory be bought
“pyramid schemes.” recruiting others and a greater chance of back should you decide not to continue.
Ken Mulhall, President of the Direct Sellers losing money. 3 Does the company have substantial sales
Association of Canada (DSA), notes many of Pyramid schemes will typically charge to consumers? If the answer is no, then don’t
these frauds are disguised as investment clubs, high “entrance fees,” possibly buried in get involved. Multi-level marketing, like any
with a get-rich-quick approach to investing. the cost of a starter kit or as investment in other business, depends on sales and service
However, he adds, others are masquerading start-up inventory; or for training or other to consumers. Pyramid schemes concentrate
as legitimate direct sales firms and multi-level services. These schemes will concentrate on making most of their money from you and
marketing companies. on the importance of “recruiting” others to other new recruits.
Mulhall says legitimate companies, like achieve high profits. Often, little or no focus “Don’t let anyone rush you into making
those who belong to the DSA, concentrate is placed on the product or service they may a decision,” says Mulhall. “An opportunity
on selling worthwhile products and services claim to represent; or on the subsequent sale to build your own business in multi-
at competitive prices, usually through party of these products and services to customers. level marketing and direct sales won’t
plan, one-on-one demonstrations, and other “Pyramid schemes seek to make money disappear overnight.”
personal contact arrangements as well as quickly from you,” says Mulhall. “Legitimate He adds people shouldn’t be afraid to ask
Internet sales. These corporations provide a multi-level and direct sales firms want to questions about the company, its products
popular and low-cost way for people to set up make money with you as you build your and services, the start-up costs, and the
their own small business. business, and theirs, by selling consumer average earnings. Any company which
Pyramid schemes, on the other hand, products and services.” refuses to answer those questions should be
are illegal scams in which large numbers Mulhall says people thinking of starting avoided, he concludes.
of people at the bottom of the pyramid pay their own home-based business in direct To learn more about this issue and
money to a few people at the top. In order sales or multi-level marketing should ask other matters on direct selling visit the
for everyone in a pyramid scheme to profit, themselves three important questions . . . website: DSA.ca.
29
BIZ X MAGAZINE • OCTOBER 2015
BizX2015OCT52.indd 29 2015-09-29 10:02 PM
