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Financial Happenings Blog
Sunday, February 11 2007

Scott Pape, under the title the barefoot investor, writes a great column in the Courier Mail each monday morning.

Todays article was brilliant - looking with appropriate contempt at money making opportunities.  One of his questions - and it lies at the heart of all 'too good to be true' opportunities - is why would any great high return, low risk opportunity be passed onto punters?  In this case the product was orange juice with unique medical powers.  And Scott points out that rather than sell this through the supermarket or pharmacy distributors, selling it thought individuals made no sense.  This applies equally for get rich quick schemes in property development or the sharemarket - if it was a foolproof way to get rich then the people with the secret would not be selling it.  They would be building a business developing property or building managed funds.

Anyway the orange juice, as many of these things are, was a multi level marketing scheme - in the shadow of Amway, the leader of all multi level marketing schemes.  Multi level marketing - or network marketing - means that as you sell product all the people in your business line take a cut of your success.  Of course, if you can get a team of people working below you then you can take a cut of their good work.

He quoted some interesting research about Amway and Quixtar (also a large mulit level marketing company) in the US, saying that 99% of all salespeople earned less than $14 a week.  I had never seen these figures before.  I am not suprised either.  $14 lousy bucks a week.




Posted by: Scott Francis AT 10:26 pm   |  Permalink   |  Email
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