Reasons to avoid multilevel marketing and contrepreneur schemes
Updated: Apr 30, 2021
Extra income or any income at all that complements parenthood is something that many mums are constantly on the search for. Unfortunately there are also a lot of fraudulent marketers aka contrepreneurs out there looking to exploit a mother’s circumstance and take their cash knowing that there will be little or no value returned in exchange. In today’s blog post, I will be highlighting 3 common deceptive schemes that take advantage of mums, and sharing some ideas on how to avoid them as best as you can.
Note: I like the term contrepreneur but this is a word that I have borrowed from a guy called Mike Winnet.
The child modelling scam
You will either be targeted on social media, with a message asking you to get in touch as your child has modelling potential, or you will see a job ad for child models wanted, or you may come across a website in your search for a legitimate modelling agency. Either way, once you show interest to a bogus modelling company, you will be invited to a photoshoot disguised as an assessment, your child(ren) will “pass” the assessment and at which point the assessor will then begin influencing you into purchasing the photos just taken, stating that they will be required to build a portfolio. Some will outright lie that they have work already lined up for you, some will use fake case studies of models they have placed, some will try to use your child to help manipulate the situation. It’s all an attempt to get you to part with a huge amount of money. When you take a step back and analyse everything, all they are is a photography company, who use people’s dreams and pain points to get you to buy images from them, no modelling/acting gigs ever materialize from them.
These type of companies are very careful with the words they use in their adverts (to avoid legal issues), but they heavily imply that with their help, your child will be a star. Many industries experts will tell you that you do not need to part with any cash to work with them, and established agencies never guarantee anything. If you do find yourself speaking with a modelling agency, first look for online reviews; type the company name along with the word scam, or the company’s address along with the word scam into a search engine and see what comes up. Also never let anyone rush you into any decisions.
These types of schemes are not a scam per se, but they are on this list for reasons that I will get into.
These types of companies sell courses that teach how to invest in properties and will promise something along the lines of “financial freedom in as little as 2 years” (sometimes even less), but in reality all you are paying for is potential. It usually starts off with an invitation to a free seminar, here speakers and staff use tactics to psychologically/emotionally manipulate you into paying for a course on property education. After handing over your money, you will receive access to the course hence why I said they are not technically a scam, but the reason why they are on this list is that they will sell this product to anyone who has access to cash (they even encourage loans) even if they know that the applicant cannot achieve what is promised (which is a lucrative portfolio + all the freedom/flexibility you can think of in a relatively short period of time). See to become a property investor, there will be certain prerequisites (depending on where you live this can be a certain minimum salary, a certain amount of available cash, already be a homeowner etc) You will receive a well thought out education on how property investing works (with some key details left out), but if your current circumstances mean you do not even qualify for a buy-to-let mortgage, you will have thrown away a lot of money. The cherry on the cake is that the same information can be found in books, at a much much cheaper price.
There are a few variants to this style of marketing, they take place both online and offline, with “gurus” selling expensive trading courses, or affiliate marketing courses that will teach you how to quickly start making “tens of thousands” a month, *rolls eyes*.
Of course this is a generalisation, and there are legitimate courses that operate ethically and are transparent, but again carry out some research before you commit to anything, and really asses if you can afford the worst case scenario, because nothing can ever be guaranteed.
Another one that is not technically illegal, but can be unethical is multi-level marketing (aka MLM aka network marketing). This is because a business venture is proposed and many recruits are led into these schemes under false pretences.
MLM involves companies selling products/services via individual merchants. Sounds legit right? But let me continue. These business models usually involve a sign-up fee or costs for a starter pack plus a minimum monthly purchase of inventory of some sort (making you a reoccurring customer). Once you realise that the products you are trying to shift aren’t as easy to sell as initially told, or once you realise the profit you gain from sales isn’t as great as you were hoping, you will likely turn to another revenue stream within the company, recruiting predecessors and feeding them the same BS you were told, so you can make money off of their “monthly purchases”. This is how these types of companies actually make money, and career promotion isn’t determined by your sales or individual merits, but by the number of recruits you build beneath you. It all ends up being a hierarchical pyramid where everyone involved become victims as well as participants of the monopoly, because you mainly make money from recruits than actual consumers.
These schemes are, usually disguised behind a “work from home” or “be your own boss” job adverts that are not only vague in their description but also misleading in their salary payment. The person recruiting you will most likely tell you about the few success stories that are out there (or make some up), tell you how easy it is to make a sale and grow a team, and eventually tell you it’s a commission only job, so from day one you will be incentivised to build a team. As you can imagine the dropout rate is quite high (1), so naturally it’s those towards the top of the hierarchy that will actually earn a living salary off of this career path. In fact according to the FTC 99% of participants lose money (2).
This is a tricky one, because there are businesses out there that operate with an MLM model; where they offer you the opportunity to be an independent contractor and have a very good reputation. But again it all comes down to doing your due diligence, never take anyone’s word as gospel, as there may be something in it for them.
Of course the schemes mentioned aren’t exclusively targeted at mums, but buzz words such as “work from home,” or “fit around your current lifestyle” mean that mums will naturally be drawn to these type of “jobs”. Another thing to remember is that anyone can fall victim to these types of programmes, it won’t be the “less intelligent” or the “desperate” that get caught in these traps, as the people behind these schemes are trained experts. A good rule of thumb is that if a company has promised a job and is asking for money up front, it is always best practice to research the company you are dealing with, look for any reviews, and also get the opinion of a trusted family member or friend as they will be looking at the scenario with a fresh pair of eyes.
Thank you again for taking the time to read my post, I really appreciate it. If you like, head on over to my Pinterest and Instagram page for daily inspiration posts.