Real or Bogus?

I was recently approached by a woman with a networking concept that I would like to do with her, but I am not sure if it is legitimate. The company sells a motivational CD system for $1500; $500 goes to the company, and the seller profits $1000. The second phase of the program is selling a conference trip for $8000, with $3000 going to the company and $5000 to the seller. This approach sounds brilliant—but is this a scam? 

—Eileen Egyedy

Not knowing any more particulars of this company, their product offering or compensation plan, it’s impossible for us to evaluate it. However, we can offer a few broad comments.

One of the core tenets of network marketing, and one of the key points to look for when evaluating the legitimacy and viability of any company, is the intrinsic value and reasonable market pricing of the product offering. In other words, ask yourself: “Would I buy this product, at this price, even if there were no business opportunity attached?” If the answer is not a clear “Yes,” then you have a red flag and are right to be concerned.

A related question would be, “Are there a substantial number of other customers who would willingly buy and use these products, at these prices?” In other words, is there a strong market for the product line?

According to the information you outlined, in this case you have an awfully high chunk of profit being paid out to a single seller; two-thirds of purchase price going back to the seller is rather unusual. If the pricing structure is heavily inflated purely for the benefit of paying out hefty sales commissions, the program may not have much longevity.

With any new opportunity you consider, it is wise to scrutinize the program carefully and, most importantly, talk with other people who have already seen stable, solid success in it, before investing any of your own time, effort and money.

For more on how to evaluate a company, consult the Direct Selling Association’s Web site: www.dsa.org. — Ed.

The $8 Plan

I have faithfully purchased every issue of Networking Times since October 2003, right up through the May/June 2005 issue. Today, when I went into my local bookstore store looking for July’s issue, they said they weren’t carrying it any longer! What to do? In the past, I never had the money to sign up for a subscription. But now that you offer the “$8 Plan,” here I am—sign me up!  I don’t ever want to miss one single issue of Networking Times!

Thank you all for creating the best source of information for those of us out here in the networking “jungle.” Have a great day!

—Bonnie Stalhiem

The Core Within the Core

Whenever I receive the journal I always go straight to the back and read the JDM words of wisdom. This succinct overview of what networking is all about [“The Close,” Sept/Oct 2005] is timely in my own life and business and has been forwarded to all my team. Thanks, JDM!

—Dr. John Snively