International Law

Independent Sales Businesses Marks

Image via Wikipedia

Kelly Spors, writing at the Wall Street Journal, writes about the attraction in these difficult times to a multi-level marketing opportunities.

"A family member who sells Mary Kay cosmetics recently invited me to a product demonstration hosted by another sales rep.

I went, and was rather surprised: About half the time was spent trying to convince me and the other attendees to become Mary Kay sales reps.

The pitch: The economy is so bad that, even if you have a full-time job, why not keep a side business in case you get laid off?"

...

While some of these independent sales businesses certainly have hard-sell and questionable business practices, it may not be such a bad thing to try.

Besides the extra money, it's a good way for budding entrepreneurs to test their business skills -- such as cold-calling, persuasion and networking, in case you do eventually need to go into business for yourself."

An an expert in fraud,  I was quoted about this economic pitch at Blue Mau Mau, stating:

"With the economy seeing the highest unemployment figures in nearly four decades, Webster thinks once those unemployed have access to credit, there is the potential for record numbers to be ripped off."

The reason is very straightforward:

"There are times in our lives when for whatever reason we want our aspirations to be achieved immediately.

For many, the most compelling overriding value is the need to be in complete control of their economic lives. Simply put, they never want to be fired again.

Those people are sitting ducks.

The con criminals know this and wave phrases like "be your own boss" and "in business for yourself but not by yourself."

Prospects pick up on such words of puffery. Buyers blow it up into full-scale fantasies of business ownership.

And then to compound the problem, they perform bad due diligence by sloppily selecting evidence that only confirms they are making a good decision.

They know that they need this investment"

Look over the comments about the Mary Kay multi-level marketing scheme on Spor's article.

Let me know how many people who commented are engaging in social proof techniques to convince, primarily themselves, that even if product X doesn't sell, then selling the opportunity to sell product X is a great deal. 

Full post as published by Misleading Advertising Law on April 10, 2009 (boomark / email).