ASD - Was It Really A Ponzi Scheme?
Written by Eddie Holford on Jan 10, 2009 2:08 am
Read More: Gossip | Legal News and Notices | MLM NewsI got this email from someone trying to blame our government and make it a big conspiracy to shut down a legitimate and legal company operating an ethical and fair business in our country. I almost threw up because of this claim. If you were in or are skeptical of opportunities then read this.
I(the company) takes your money and sells to you the ability to post your "businesses advertisement" on my website for a fee of $100 dollars. The (company) then promised you that in approximately 4 months the company would give you back $125 cash as a (rebate) for looking at random websites everyday for 15 minutes a day with nothing more required of you.
You were the first person and only person to ever use the "advertising service"(company). The fact would be clear that if I the (company) did nothing more to bring in revenue, that the (company) would have no way to pay you (your rebate) no matter how many websites you viewed over any amount of time, because the (company) is not generating any other revenue except the revenue that you have paid to it. It makes no difference if the (company) takes 50% of "your revenue"(call it an ad package) and pays it back to the field(you), in the form of a "rebate"(meaningless word) for looking at random websites. If the company does nothing else to create income it will not create any additional revenue and the company can not keep its promise to you to give you your rebate of $125 in four months. This is not a Ponzi scheme yet, it is just a bad business model!
If I(company) sell 2 additional "advertising packages" to 2 different people in the third month of the (companies) business existence, (or any time frame for that matter), and the company uses those 2 new advertisers funds to pay you your (rebate), now the company has just become a Ponzi scheme at that point.
Why? Because the company is using the new advertisers funds to pay off older advertisers that have come due. The company has still not produced any real revenue besides the revenue from its advertisers. It would have received a total of $300 in revenue. Paid out $125 in "rebates". Leaving the company with a balance of $175. In four more months the company would be required to pay out another $250 in rebates to the 2 newest advertisers ($125 each).
Remember the company only has $175 left. The only way to pay these two new advertisers their rebates is to bring in more advertisers. And the scheme goes on and on until the Feds get wind of it.
Don't make it complicated, it is without a doubt a Ponzi scheme, Bonzi scheme, Ravioli scheme! Better known as a SCAM.
Never start with a company that doesn't accept credit cards as payment directly. This is a big red flag. I have a merchant account company so I know what I am talking about here. If you have a business and you can't get a merchant account or a PayPal account then you have rediculously terrible credit or you have been banned from PayPal for bad practices in the past.
I have a website design company that can process unlimited transactions via PayPal and up to 20,000 per month through my merchant account. That company has only been in existence for 4 years so it's not like you have to have been in business for decades. It is just a simple PayPal business account that has had the same limits since I opened it. I had to prove that I had a real business banking account and that was it.
My suggestion is build a real business. If you see red flags or you have the gut feeling that something isn't right with a company. Then investigate it throughly. As for me RED FLAGS of any kind is enough to say NO THANKS.
Eddie Holford
MakeYourLifeRich
888-433-2032
Views: 1,668 | 
Comments: 4 
About the Author: Eddie Holford
Member Since: 10/08/2007
I'm a Distributor For:: Team Beachbody
Other Company: EnterEcom Online and Onsite
Industry: Business Opportunities
Primary Web Site: http://www.MakeYourLifeRich.com
Thanks for helping the good people out here!
Get the word out, it's too easy to get scammed, must learn the ropes, and do your investigation. Even if you've been in a company 5 years, do your homework! You may find that your not happy with the cards you've been dealt, and have to try something different, thats fair and legit!
Like your last paragraph
But I would just add - investigate every company thoroughly. Not just the ones where you feel the red flags going up. Many, many people do not go into network marketing with the idea they are going into business. You would never, never open up or buy into a brick and mortar business without doing your homework. You'd investigate the market, the gross income, the expenses, the location, the growth etc. and yet people jump into a network marketing opportunity without realizing they need to approach it with the same mind set.
Many people are failing in network marketing for that very reason. They make decisions based on hype/emotion and neglect to educate themselves in the business arena.
Very, very educational article, well written, well done.
Joyce Penner
http://joycepenner.wordpress.com
Scams
Great info I recently was approached by a good friend who has joined what is suppose to be a new google or yahoo. It is call xxxxx and represents exactly what you are saying about a ponzie scheme. They give you free advertising if you pay and amount to join as a member. Member ship is at different levels and costs they claim u get advetising for a liftime free. If you sign up different people for this program you get paid 125.00 to 500.00 for them depending on the level they come in. The company has no revenue or reputation and only has a website presence on the internet promoting thier business.They keep telling people that they are the next google or yahoo and when enough people will sign up and place the free advetisement that it will attract paying customers, meanwhile no revenue coming in.
John Stephens
The Next Google? Yeah right!
If any company ever says that they are the next Google, Yahoo, Microsoft, Nike, Adidas, Ford, Toyota, etc. you need to run away as fast as you can. These are the leaders and they will be here forever. Or, as long as I may be alive. The key is that no company will come into the market and threaten them. If they do they will be bought but you will never see anyone threaten Google. They own 80% of the market and thier company employs the best programmers in the world. They are here to stay and they will dominate like Microsoft does.
Eddie Holford
http://MakeYourLifeRich.com