I have been on PCs since 1985 and on the ‘Net’ since 1993 (during the 14.4kbs days). And I’ve also always had a habitual interest in all kinds of business. I love to observe business models, from the large corporations down to the Mom & Pop shops. I especially have a love for the Service industry and Entrepreneurs.
So, as the Net began to grow so did business opportunities.. both real and not-so-real. But what didn’t surprise me was to see the old-school ‘scam’ type of ‘opportunities’ to begin appearing online. Multi-Level-Marketing (MLM) was the first on the scene. “Bait-and-Switch” wasn’t far behind either. And the con-artists who prey on the lonely or elderly seemed to multiply into an amateur sport.
Now, to be fair, many new and valid business models also made the transition to the Net. eBay took the weekend flea-market/garage-sale straight to the users home and is a huge success. It is a legal and reputable business, though their fees have gone up quite a bit since the five-cent postings they had when I first used them.
However, what I have kept an eye out for all these years has been a truly workable, online, business model that actually lived up to the hype and promise. I can’t say I’m all that impressed with what I’ve seen. However I have come to classify these online-‘opportunities’ into a few basic categories, namely: Affiliate Programs, Web-Stores, MLM and Career Training.
The Affiliate program business model is an interesting one. Can it make you money? Technically.. yes. But usually not very much and only if you have a website that is -already- getting a lot of traffic. Very important, because the key rule in Net sales is TRAFFIC. You can have the greatest product or service to sell at your site but if nobody is visiting your site.. you have nothing. Affiliate programs work by giving you a percentage for each sale or referral that you make advertising someone else’s product. This way you don’t need to carry an inventory or make shipments.. you just have to basically have a website with a banner that says, “Hey!.. go buy this other guy’s stuff so I can get paid!”. Authors such as Robert Kiyosaki have used affiliate programming to sell his ‘Rich Dad, Poor Dad’ book series and DVDs for years. As you can imagine, with hundreds of thousands of people sending him even one sale a month.. he makes quite a fortune. You, on the other hand, make maybe enough to grab some lunch. The key is, again.. net-traffic. If you have a web-site that gets lots of hits for your content on say, skate-boarding, and you have affiliate banners for skateboard manufacturers, music, etc., you just might make a decent amount of extra spending money. But don’t quit your day job just yet.
As I mentioned, having a web-store at a reputable site with LOTS of traffic such as eBay can actually turn into a decent, money-making hobby. Just understand that the competition is abundant and you better know your bottom-line for costs before going neck-deep into it. For two years I ran an online store on eBay, selling items I purchased at near-wholesale from the Garment District in Los Angeles and re-posting them online. It was a fun excursion once a month, not too much hassle to ship out and pulled in a few extra hundred bucks on a good month. Again, nothing to quit the day-job over, but at least it was a hobby that made money instead of costing money. However many people have made a real niche’ for themselves by specializing in eBay sales on a large scale. eBay stores that only sell labels, Office supplies, or ink-toner or self-adhesive magnets or blank DVDs have done quite well. But, again, the competition is fierce so you have to have a good supplier at rock-bottom prices or you’ll get priced out of the market.
Now, the other type of Web Store is more of a sad story really. The way they work is by taking the old ‘drop-shipment’ business model and doing it online. It’s sort of like selling Tupperware or Avon, except now it has expanded into camping equipment, jewelry, furnishings, adult toys, ceramic collectibles, computers and so much more. A main company warehouses the actual products and does all the shipping, similar to Affiliate programs. Only now, instead of a small banner sending them traffic.. you instead build a full website (using their templates) and ‘stock’ your site with photos and prices that YOU choose to charge above the ‘wholesale’ cost from the main vendor. But here’s the first problem, the cost you pay (deducted from a sale, so no upfront money is required from you) is often already at the retail value. So a four-person camping tent that normally retails for say, $125, will cost you $115. So, you can advertise it on your site for $150-$175 but it’s not a very good value to the end-customer and your sales will be minimal. Plus, remember the golden rule: Traffic. Since it is your own site with your own domain name (ex. bobscampingstuff.com ).. it is up to you to build traffic to even get visitors. That is not an easy task. In addition, you will be paying a monthly fee to the distributor for the template-site plus a possible ‘distributor license fee’ as well. For this reason, I just really do not recommend these type of web-sales outlets as a business.
MULTI LEVEL MARKETING:
This is the classic MLM arrangement that made it’s transition from off-line into the on-line scene with a vengeance. MLM is, for so many people deeply involved in it, almost more of a religion than a business. Because of it’s structure, those who are ‘at the top’ of the arrangement are often the poster-children for how much money can be made in these ventures. Their testimonials of how they went from food stamps to vacationing in the Bahamas while still earning six-figure incomes is at the forefront of the recruiting sites for MLM designed businesses. However, what is not advertised so well is the very fine print, usually in light-gray letters at the very bottom of a page on their site that may mention legal statements such as, “..for demonstration purposes only”, or “..there is no guarantee implied as to your actual income”, or even, “..the persons and figures represented here are a composite and not an actual account of any particular individual”. How inspiring.
The basic structure of MLM works like this; first.. you are recruited into a MLM program. It could be for a company selling vitamins, fruit juice from the amazon, household products, legal services or any other viable product people might want. As you are recruited, initially you may be told that you will be earning a great income primarily from selling the product. This is where things start to get into the fuzzy math approach that has given MLM the reputation that it has. In looking at the business model, when you were recruited you were credited ‘under’ the person who brought you ‘in’. The more product you sell, the more your ‘up’ person makes as a percentage from your sales. And the more people you can recruit ‘in’ yourself.. the more money you and your ‘up’ person make as well. This arrangement goes all the way up to the ‘Big Cheese’.. the guy who you will inevitably see at some motivational meeting either in person or on DVD dressed in a great suit, pockets bursting with cash, freshly tanned from his vacation to tell you that if you go out and ‘recruit’ more people.. you too can stop selling product and earn money from those who are ‘under’ you.
I’m not making a morality call here, I’m just describing the business model. In MLM what you will find is that the business is very, very much into intense, highly-motivational ‘training’. If you don’t have the energy for that, then this is not the business model for you. The reason is because the business makes more money from layered training materials, websites, selling you brochures and DVDs you’ll need to recruit, than from the actual product itself. You might find a few people willing to spend $50 for your brand of vitamins, or $15 for your bottle of juice, but the real money is in the recruiting. And for that, well.. that’s where I have sadly seen first-hand several people go from being a ‘normal’ friend into a person on a ‘mission’ who almost religiously becomes focused on people only as either a converted recruit.. or a possible recruit. My suggestion to anyone who decides to invest time, energy and money into a MLM should always keep their ‘thinking-cap’ on and really keep vigilant about the affect this sort of business may have adversely on your personal relationships with others.
While not a ‘business’, career training online so as to make yourself more marketable or run your own business is another option for making money online. Now, some such as the, “Make Money Stuffing Envelopes” are just re-packaged old scams from the past. But there are actual job skills for those who are for whatever reason home-bound due to illness or other reasons which can be learned and performed online. One such example is online medical billing. I have a personal friend who learned and operates this as a home business online. Will it make you ‘rich’ in a few years? No. But it’s an honest job with real pay that is not a scam. Just be sure to get the information from a reputable source, not someone who gives you a little info at a time, charging you each time so as to ‘milk it’.
Many people have attended accredited online colleges as well to work on their bachelor’s degrees or even as part of their certificate as a Medical Assistant or other job skill. In such cases, in-person class time is also required, but using the Net to further your education with an accredited school is a great way to increase your income potential. For this reason I recommend online-schooling for those with a busy schedule that doesn’t allow for as much in-class time.
Irregardless of which online business opportunity you come across, remember the tried and true adage.. “If it sounds TOO good to be true, it probably is.” Also, be alert and aware about a job that requires repeated expenses being paid to the person/company you’re supposedly working for. It’s normal to pay for state licenses or classes that are not affiliated with the company you are working for at times. But if the company itself is making money from constantly selling you “must-have” training DVDs, brochures, websites, advertising campaigns, etc. then you have to look at the big picture and ask, “Am I really an employee/agent earning a living from this company.. or a duped customer making them a profit from my own wallet?”
A good resource that is worth taking a look at is a website; http://www.ripoffreport.com . Now, first a bit of a caveat. In life, you will always find disgruntled, disillusioned, angry people who are on the negative end of any topic. You could Google ‘Jesus’ or ‘United States’ or ‘Disneyland’ and find blog entries from people who have the most vile, angry, hateful things to say on the topic. The same is true with user-entries at RipOffReport.com. Your job, as you read the entries is to discern whether the person commenting on the business you did a search on is presenting a valid case or just angry because their own half-hearted attempt did not make them a millionaire in three weeks. Also, look to see if the accusations are documented, supported or in large numbers from a variety of people. Don’t be so quick to take one person’s entry as valid. So, use the website with a grain of salt and it could save you from losing money before investing into the latest ‘Online Opportunity’ you come across.
Henry Velez (copyright 2010)
PC Repair Done at Your Home/Office over the Net.
Author: Henry The PC Guy
Since 1983, Henry The PC Guy has been working with the most basic of computers and continued to today’s Win10 operating system. From 2007 until 2012 was the owner/operator of ‘Up&Running PC Repair’ in Southern California until moving to a life in the Philippines in 2012. He has been building websites since 1993 and is well versed in various aspects of blogging, vlogging and podcasting.