If you are still reading our blog instead of running your own internet home business, then it means that you are not 100% certain that it is a profitable and legitimate means of earning a living. So today we would like to give you one extra helping hand: discriminating between legitimate home-based businesses and scams.
Yes, there are sadly a lot of scams running around the internet and thousands of well-meaning entrepreneurs fall victim to them. These scams are often cleverly disguised as legitimate businesses and even your common due diligence can fail to expose them, and put you on your guard.
This is why we decided to make a list of the most common types of business model scams which could trap you into believing you were starting a profitable and legitimate internet home business:
1. Repackaging/Reshipping
You are offered the opportunity to be a middleman between overseas distributors and end clients in the US. All you have to do is receive some products, package them, affix addresses on the packages, and send them by courier or postal service. You are offered a generous fee for your work – too generous to refuse.
What is the catch? One: you will not receive any fee for your packaging and shipping work. Instead, you will receive a visit from the police enforcements, because the goods you received are either stolen or bought with cloned credit cards.
2. Craft Assembly
You are required to assemble toys, home decorations and such and then ship them back. You have to pay an up-front fee for joining the business and a guarantee deposit for the parts you will receive. That sounds quite reasonable, doesn’t it?
The truth: once you finish assembling the items, they will be rejected for the reason that they do not conform to the standards. In reality, you could be a Japanese robot and still could not meet the scammers’ standards. In the end, you will be left with some crafted items and the lost money. Under ideal circumstances, you may recover a part of your losses by selling the objects yourself.
3. Multi-Level Marketing
Let’s be clear on one aspect: there are legitimate MLM business opportunities, such as those developed by Amway or Avon. The business model is simple: you join the company as an agent, pay a deposit, receive a batch of products to sell, and then you should start building a customers’ network.
Scam MLM businesses will send you low quality products which you will not be able to sell to anyone. And, of course, you cannot send them back to the mother company and get back your money because they are nowhere to be found.
4. Medical Billing Processing
The business model seems simple, legitimate, and straightforward: you receive training, buy software for bill processing and then start working with local clinics and hospitals.
In reality, clinics either process their bills in-house or outsource this activity to specialized companies. But they do not work with small home-based businesses. What you will get from the scammers is worthless software which is either outdated or simply sub-standard in terms of specifications, and a list of clients which either do not exist, or never expressed an interest to outsource medical billing to an internet home business.
5. Internet Storefronts
You are asked to pay a fee to have a website set up with goods for sale or affiliate links. All you have to do is obtain and maintain hosting services for the website.
The catch: the goods for sale do not exist, the affiliate links lead to bogus websites and if there is any kind of transaction between end customers and the scammers, you will be held responsible for the incurred damages.
As you can see, these scam businesses are quite difficult to differentiate from legitimate businesses. Whenever in doubt, trust your instinct, check the business at the Better Business Bureau and do not pay any fees until you receive verifiable guarantees.