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December 13, 2002
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MY IBIZ WEEKLY
December 13, 2002
_______________________________________________________________
Starting a Business on the Internet isn't impossible if you have the right help...
Vol.13, Issue 14
Editor : Donesia Muhammad
Copyright (c) 2002 KDM Publishing
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IN THIS WEEKS' ISSUE
_______________________________________________________________
Editors' Notes
New Ad Specials
Feature Article: A Pyramid By Any Other Name By Elena Fawkner
Spotlight Ads
Coop Ads
Feature Article: Creating Website Traffic--Part IX Traffic Through Give-Aways by Kevin Bidwell
Coop Ads
Need Quality Ezines to Subscribe To?
Contact Information
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EDITOR'S NOTES
_______________________________________________________________
Hi, everyone. Well it's Friday again. I hope you had a pleasant week. I am still getting used to autoresponse plus. I see there are a lot of features I can use and plan to use but I just have to take the time to read it all.
Once I finish ( or begin) myibizweekly.com then everyone can always view it in html online. But I will continue to send the ezine in text with a choice for those who want to view it in html. You will also be able to edit your subscription info whenever you want including whether you want to receive text or html. When it's done, I will let you know.
Today I have an article from Elena Fawkner dealing with pyramid schemes.
Tuesday I talked about finding work at home jobs and how to avoid all the scams out there. She has an excellent article on how not to fall for those traps.
I also have part nine in Kevin Bidwell's Creating Traffic series. I will put this series on an autoresponder in the future along with my creating an ezine series so you can access it whenever you wish.
Don't forget the ad specials. They are going to change on Tuesday so you have 4 more days left before the deal changes.
Well I have as usual another busy weekend with my children so no long speech today :)
Everyone take care and please have a safe weekend
Donesia Muhammad
http://EzineAdHelper.com
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A Pyramid By Any Other Name
© 2002 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" recently 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) 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 ...
Elena Fawkner is editor of A Home-Based Business Online ...
practical business ideas, opportunities and solutions for the
work-from-home entrepreneur.
http://www.ahbbo.com
_______________________________________________________________
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Creating Website Traffic--Part IX
Traffic Through Give-Aways
_____________________________________________________________
[This is part IX in a ten part weekly series on how to create
traffic to any website. You can access the previous articles
by going to this week's I-Marketer and clicking on the past
issues page: http://all-in-one-business.com/imm]
In the grocery biz it's called a "loss leader"--an item the
store actually LOSES money on to entice people into their
store. Of course, the store hopes that while you are buying
the cans of pop they are losing money on, you will also pick
up the other items on your grocery list and they will
ultimately turn a profit.
The same concept works online.
When you offer something of significant value for free, you
can entice people to visit your website. If you do it right,
they can be the highly targeted visitors you want and they
will BUY while they are there.
Here is how you can go about using a FREEBIE to get traffic
to your site:
1. Brainstorm
What things would YOU like to see given away free? That's
always a good starting place.
Surf the net and see what is available. Just because there
are tons of eBooks you can give away doesn't mean that will
be the best for you to use.
Sometimes you can give away free software that only requires
the visitor to pay a small shipping and handling fee.
Brainstorming will help find more and more products.
2. Refine
Once you have a list of possible products, refine your list.
You are looking for a product that can appeal to your target
audience, has real value, can be delivered for little or no
cost and moves the visitor closer to a sale.
Can everyone come up with a give-away that can meet all of
these criteria? No, but the closer you can come, the more
free traffic you will generate.
3. Promote
Once you have settled on a giveaway, it is time to promote
it. Here are some great ways to get that done:
(1) Get listed in the "free" directories.
There are a number of free directories on the web. If your
"freebie" has real value, you can get listed on these and
see a great flood of traffic to your site. Even better,
other "free" sites that are not as popular will pick up
your freebie from the premier sites and you will get even
more exposure.
Here are some of the top free sites:
TheFreeSite.com
FreeStuffCenter.com
1FreeStuff.com
TotallyFreeStuff.com
FreeStuffCentral.com
JustFreeStuff.com
If you can get an endorsement from ANY of these sites, you
will see a good jump in traffic.
(2) Add your freebie to your signature line
By adding your free offer to the signature line of your
outgoing emails, you are exposing every person you email to
your offer. Many of them will visit.
(3) Add your freebie to the Bio box on articles you write
When you write and submit articles, make sure that your bio
box clearly states the giveaway.
(4) Offer your freebie through newsletter directories
Let other newsletter editors know about your freebie. If it
has real value, many of them will offer it to their own
subscribers. Imagine what will happen when 100 editors with
1,000,000 subscribers all send out an announcement about
your free offer.
(5) Offer your freebie as an incentive to get people on your
newsletter list
One of the top sites on the web uses this strategy to
convert 4% of its visitors into paying customers. It's an
amazingly powerful tool.
These ideas will get you started in putting together your
freebie. Once you come up with one, let me know. I might
just give you a plug!
Kevin Bidwell is owner of http://www.all-in-one-business.com
Kevin is offering a FREE BUSINESS START-UP KIT to everyone
who visits his site. If you liked this article, you will
want to subscribe to his newsletter. Send a blank email
to:
nwslttr@quicktell.net
This article may be reprinted for use in newsletters and
websites provided that this information box is kept intact.
Email notice of intent to publish is appreciated but not
required: Kevin@All-In-One-Business.com
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