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Work From Home: Scam or Career Opportunity?

Updated on March 23, 2011

Are you making money or making a mistake?

Working from home can be an opportunity to have a flexible schedule and to make some extra cash, but you can also get gypped. There are no hard-and-fast rules about scams, and no lists of scamming companies versus legitimate companies. You simply have to get the DL on what "work from home" really means and use your judgment. Here are some things to consider:

  • First, how do you make money? Do you have to sell products? Do you have to refer customers? Do you simply do data entry or other manual labor? Make sure that what they want from you is something you can realistically provide. Do you have the capacity to be a salesperson? Do you have a computer that is reliable enough to do data entry?
  • Second, how do they make money? The company is not going to just hand you a money making opportunity and not get anything out of it. Many companies require membership, but with membership you can reap the benefits. For example, many groups operate off of referral-based marketing. This implies that YOU are also a referral, which means you have to pay for whatever service/product you will sell. However, if you like the product, you get to tell others about it and make money for it.
  • Third, how much will it cost you? You may have to buy inventory in order to sell it. You may have to buy a membership. You may have to rent a tool in order to do the work. Make sure you know about up-front costs and any further costs before starting.
  • Fourth, how long will it cost you? Membership implies continued participation. Do you have to make monthly purchases to stay a member? Do you have to rent equipment? For how long? If you are in it to make a quick buck and bounce, make sure you are not tying yourself to something that will continue costing you money.

Work From Home Opportunities

There are a lot of work from home opportunities. Some may seem appealing to you, some may not. Some are scams, some are not. The following are some of the options which may present themselves to you:

Envelope Stuffing: It seems that envelope stuffing work from home jobs are mostly scams. These jobs typically entail you ordering materials and mailing it out. Here's how it's a scam:You have to pay for those materials up front.

One man's trash is another man's treasure.

Remember that some work from home opportunities may appeal to you, but not to others. Also, some may not appeal to you while others love it! If you don't mind membership fees and you like the product, then by all means, jump on it! If you are more of a thinker and need to make sure first, then wait. If the company pressures you too much to be a part of the team, then that company is not for you. Follow your instincts when choosing the right opportunity for you, because there are enough opportunities out there that you probably won't lose much by avoiding the wrong one.

Work From Home Basic Terms

Multi-Level Marketing (or MLM): This is a sales and marketing model based on a hierarchy format. As the name implies, there are several levels of people involved in one particular endeavor. Multi-level marketing is also called network marketing, referral marketing, and direct selling. This model can be lucrative because each person is compensated for the sales they generate in addition to the sales their recruits generate. There are many work from home opportunities based on this model because participants simply utilize their own network on their own schedule to create sales.

Network Marketing: Network marketing is another name for Multi-Level Marketing. This type of marketing receives a lot of criticism and the industry has thus invented new terms.

Referral Marketing: Referral marketing is a little different than network marketing because your referral may generate continuous income for you. The person you refer is likely to have a membership, and from that membership you receive profits for each of their purchases.

Direct Selling: Direct selling is different from network marketing and multi-level marketing because the actual sale is generated from an event. The inventory is located in one central location and then directly sold to consumers through an agent - which could be you - who receives a commission. The agent has access to the inventory and often has the support of the mother company.

  • Criticism of multi-level marketing, network marketing, referral marketing, and direct selling: MLM groups are often compared to pyramid schemes, which are illegal. They are also accused of focusing on recruitment of other salespeople instead of actual sales, which can be seen as a poor business practice because many MLM companies lock their salespeople into a something that costs them money. These terms are often used interchangeably and businesses which use these models receive similar criticisms.

Telecommuting: Telecommuting is not commuting at all. Telecommuters are also referred to as nomad workers and web commuters. Telework is a general term to describe the work that people do from home. Telecommuting can be done through a local office and simply eliminates the necessity of commuting to and from work. It can be converted from a job formerly done in an office or created by a company to get work done that does not need close supervision.

  • Criticisms of telecommuting: Telecommuting creates a risk of loss of control from the employer. Some companies complain of experiencing a drop in productivity. It also may have a negative effect on a person's career. It lessens the likelihood of getting promoted and may not be seen as respectable in future job searches.

Better Business Bureau: The Better Business Bureau is a review organization which accredits businesses based on their business practices. The BBB bases its review on fairness and trustworthiness and continually monitors businesses' practices.

Better Business Authority: This is not the Better Business Bureau! This company focuses only on work-at-home schemes and opportunities. Their website lists some basic information on work at home options and has a list of blatant scams such as the Nigerian letter (which is not exactly a work at home opportunity, but more of a "get rich quick" scam).


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    • Becky Puetz profile image

      Becky 6 years ago from Oklahoma

      Very good information here about the various types of work from home opportunities.