Not all work-at-home opportunities deliver on their promises. Some classic work-at-home schemes are medical billing, envelope stuffing and assembly or craftwork. Ads for these businesses say: "Be part of one of America's fastest growing industries. Earn thousands of dollars a month from home!" Legitimate work-at-home program promoters should tell you, in writing, what's involved in the program they are selling. Here are some questions you might ask a promoter:
- What tasks will I have to perform? (Ask the program sponsor to list every step of the job.)
- Will I be paid a salary or will my pay be based on commission?
- Who will pay me?
- When will I get my first paycheck?
- What is the total cost of the work-at home program, including supplies, equipment and membership fees? What will I get for my money?
The answers to these questions may help you determine whether a work-at-home program is appropriate for your circumstances, and whether it is legitimate.
Some multilevel marketing plans are legitimate. However, others are illegal pyramid schemes. In pyramids, commissions are based on the number of distributors recruited.
Most of the product sales are made to these distributors, not to consumers in general. The underlying goods and services, which vary from vitamins to car leases, serve only to make the schemes look legitimate. Most people end up with nothing to show for their money except the expensive products or marketing materials they were pressured to buy.
If you're thinking about joining what appears to be a legitimate multilevel marketing plan, take time to learn about the plan.
- What is the company's track record?
- What products does it sell?
- Does it sell products to the public-at-large?
- Does it have evidence to back up the claims it makes about its product?
- Is the product competitively priced?
- Is it likely to appeal to a large customer base?
- How much does it cost to join the plan?
- Are minimum monthly sales required to earn a commission?
- Will you be required to recruit new distributors to earn your commission?
Net Based Business Opportunities
The Federal Trade Commission's Work-at-Home Schemes publication says that many Internet business opportunities are schemes that promise more than they can deliver. The companies lure would-be entrepreneurs with false promises of big earnings for little effort. Some tips to finding a legitimate opportunity:
- Consider the promotion carefully.
- Get earnings claims in writing and compare them with the experience of previous franchise and business opportunity owners.
- Study the business opportunity's franchise disclosure document.
- Visit previous franchise and business opportunity owners in person, preferably at their place of business.
- Check out the company with the local consumer protection agency and Better Business Bureau. See if there is any record of unresolved complaints.
- If the business opportunity involves selling products from well-known companies, verify the relationship with the legal department of the company whose merchandise would be promoted.
- Consult an attorney, accountant or other business advisor before you put any money down or sign any papers.
- Take your time. Promoters of fraudulent business opportunities are likely to use high-pressure sales tactics to get you to buy in. If the business opportunity is legitimate, it'll still be around when you're ready to decide.
Mystery Shopper Jobs
Mystery shopper jobs may seem easy and lucrative, but they may be fraudulent. According to the FTC, some scams require you to pay a fee for the privilege of working for the company. Other companies send you a fake cashier's check to deposit; then they instruct you to send most of the money to another address and use only a small amount for the shopping trip. When the bank discovers that the check is not legal, you will be liable for repaying the money. For more information on mystery shopping, check your local bookstore, library or the Mystery Shopping Providers Association.