This article is based on Richard Dennis’ conversation with Bob and Anna. 

In the swirly whirly world of network marketing on the internet, it’s too easy to forget what we are doing.  Many of us end up promoting stuff that would never sell on the street.

We base this article on a few simple ideas …

  1. We sell stuff and we find others to sell stuff with us.
  2. Network marketing is just another way to bring goods and services to the consumer.
  3. Commissions get paid from the difference between wholesale and retail all along the way from the supplier of the raw materials to the manufacturer to the shipper to the delivery person to the wholesaler to the retailer to the salesperson.
  4. If consumers do not want or need a product, they will not buy it.
  5. If someone would not buy your product downtown, they should not be buying it online.
  6. If you would not stock your product or service in a store downtown or offer it with a straight face to your family, you should not promote it online.

With these ideas in mind, let’s take a look at a few ‘opportunities’ popular in MLM these days.  In each case, ask yourself, “What am I actually selling?  What am I getting paid for?”

The Shady Shopping Shaman

Online shopping companies offer commissions like 30%.  This looks great, until you read the fine print and learn that you will be paid 30% of what the retailers pay the shopping clubs.  That could be as low as 3%, so you are earning 30% of the 3%, or around 1% commissions!

For example, if you convince someone to buy a $100 pair of jeans from your site, you will earn $1, not the $30 you expected.  No salesperson sharper than a bag of hammers would ever go to work for a 1% commission downtown, so why would you do it online?

One company posted an earnings predictor on their own website, based on customers spending $150 per month.  If you wanted to earn $10000 per month, you would need 27,329 people shopping on your site and the sites of your team.  27000 people spending $150 per month!  That’s just crazy.

So how do you make money?

To become a shady shopping shaman, you have to pay $200 to $400 for your membership, and commissions are paid right out of your pocket even before a single blender or book or bobsled is sold from your site.  You receive nothing in a bag, bottle or box, but you go out and promote.

You are not selling goods or services, you are selling businesses., i.e. ‘permission’ to go out and find others like yourself willing to pay $200 to $400 for permission to go out and … you get the idea.

You are selling permission and getting paid from the newbie’s pocket.  That’s not just crazy – that’s a pyramid!

The Tippy Canoe And Tricks For You Travel Company

The online travel companies cost about $400 to join, for which you receive nothing in a bag, bottle or box.  You don’t receive a single mile on a plane or train, not one ball game or concert ticket, not one round of golf or limo ride, and certainly not one minute aboard a cruise ship.

What you get is a plastic card that says you might be a travel agent, which you are not.  Ask any travel agent how much training is required, and you will quickly see that you are not a travel agent.

After the initial $400, you pay up to $50 per month for your website called a ‘booking engine’.  Commissions are paid right out of your pocket without a single mile of travel sold.

There is absolutely no residual income with the travel companies.  If you actually sell travel, you will be doing it all by yourself with no support from your team.  Our calculations in a previous article show that if you want to earn $10000 per month, you would have to sell one of the following every month …

  • 111 cruises at $1000
  • 3333 airline tickets
  • 1667 limo rides
  • 1667 golfing days every month
  • 2500 concert or ballgame tickets

In the Tippy Canoe Travel company, you are not selling travel.  You are selling ‘businesses’ and websites that promote permission to find others like yourself willing to send in $400 to receive nothing in a bag, bottle or box.

The Clever Carbuncle Communications Company
The Slippery Cell Phone System
The Anything Goes Energy Association

We lump these three together because they all use the Excel model of compensation plan – high front end costs and extremely low back end residual.

So-called ‘commissions’ and CAB’s (customer acquisition bonuses) are paid right out of the newbies’ pockets after they have paid up to $500 for their box of air or $10 leatherette binder and gathered a couple of customers.  When Excel fell apart, many leaders admitted that their checks were up to 90% CAB’s and only 10% residual.

Breakage is high, and residuals are often less than 1%, maxing out at 5% or 8% on levels so deep nobody gets there unless they enjoy the years of poverty or the recruitorama required.

In companies like this, you are selling hope and hype and making an income based on constant expansion.  This is how we spell p-y-r-a-m-i-d.

The Awesome Awful Online Auction

Whether it’s a penny auction or a reverse auction, you are NOT making money by selling goods or services.

You are selling bids to people who use them online, throwing them away at Harleys and handbags, hoping for a bargoon.  But for every winner there are dozens of losers who have paid as much as 60 cents per bid to reduce the price by as little as 1 cent!

You are selling hope and collecting money from the losers.  This is not sales.  This is gambling.  This does not belong in a store.  This belongs in a casino.

Often, the auctions conceal a more dangerous backside, a costly flimflam that can affect millions.  The flim is the penny auction and the flam is the Ponzi behind the scenes.  Read more here.

The Silly Surfing Kooky Clicking Company

The surfing/clicking companies pretend that you are selling advertising units and participating in some kind of friendly co-operative to help each other get your websites noticed. 

They will promise wacko returns like 1% daily or 5% per week on your ‘investment’.  Some of them work out to 400% to 1000% per annum!  Try telling that to your accountant or banker and get ready to be laughed out of the office.

These scams will encourage you to send in as much as you can, click on ads daily, and cash out with huge returns.  Most of you will be hugely disappointed, publicly humiliated in your local papers, or imprisoned.

If you are a clicker or a surfer, you are NOT selling advertising.  In fact, you are not selling anything.  You are in a Ponzi and you should get out now for the sake of yourself, your family, your friends and acquaintances.  You have been tricked.  Get out now.  Warn others.

The Tricky Tool Weasels

Building a business can be frustrating hard work, but don’t lose sight of what you are trying to build.  It’s okay to make a dime or two selling tools, but don’t get distracted from your building.  Too many tool weasels are out there selling you the latest greatest automated effortless systems, when they have never built a business themselves.

The Aussie Infomongers

One of the worst compensation plans is the Aussie 2 Up, where you give away your first two business partners to your sponsor.  This comp plan is ALWAYS associated with a scam where your are selling overpriced goods or services that you could find cheap or free elsewhere.  If you find yourself selling $500 ebooks or $1500 information packages or $10000 seminars, ask yourself, “Would I buy this stuff at this price if there were not a business opportunity attached?”

Your answer should always be NO, and you should realize that you are not selling ebooks or info or seminars.  You are selling the opportunity to find others to buy the opportunity to sell overpriced vapogoods who will then go out and find others to buy the opportunity to sell overpriced vapogoods, and the only thing of value changing hands is the money.  And the value flows just one way – up – leaving losers at the bottom gazing skyward wondering where their life savings went.

Are There Any Good Companies?

Yes, there are thousands of them, but but they are not as loud as the cheesy ones.  You have to learn how to avoid the scams and pick the best legitimate company for you.  You have to get educated the same way you would get educated if you were opening a store downtown or buying a franchise at the mall.

The best way to start your education is to read the free report Big MLM Lies.  Download it, and we will give you a free mp3 version as well.  This will save you years of expensive failure and frustration.

You can also send your questions to

Once you have chosen a five pillar company, you will want to start building right away with the new skills you need.  That’s where Tom ‘Big Al’ Schreiter comes in.  Get his list of essential skills at

Bob and Anna Bassett

Tom ‘Big Al’ Schreiter’s 25 Skills
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