Marta, at www.WorkFromHomeMomma.com, mentioned some of the downsides of being involved in direct selling and it reminded me of some of what I have observed with business opportunity companies.
Business opportunity leads, or as they are often called, biz op leads, can be some of the highest paying leads out there.
The way that I have seen it work is often the following process:
A firm will offer a free or cheap product or service. This product or service is often sold at a free seminar or offered through some advertisement. If it is sold, it is at a low price - $39-$69 range. The real purpose of this is not to sell the product or service, but to allow the customer to self-identify himself as someone interested in the topic.
These type of offers might be things like:
- How to make money on Ebay
- How to buy real estate with no money down
- Wealth Building
- Millionaire Secrets
- Etc.
These might be a tape, an ebook, a video package, a booklet, or a book. The whole purpose of the product is to hook a certain percentage of the buyers to take the next step.
I have seen companies that produce the product often be willing to allow the marketer to keep all the sales revenues from this first product in order to get the lead. These leads, if you were to sell them, could bring anywhere from $40 - $200, depending on the program, how qualified these leads were, and the buyer of the leads.
The next step for the biz opp lead guys, is to sell the next stage. Sometimes this is a two step process, where they will try to sell a several hundred dollar package first and then go for the big sale later, or some will go straight to the big sale.
The big sale often is a combination of some product, literature and coaching. The coaching will be some weekly session, usually over the phone, with an “expert” coach, who will guide you through the ins and outs of launching this new business. Often the format is to help you set goals, make sure you are reading, and help hold you accountable to do the things that are necessary to be successful at this new business.
The big sale will often be for thousands of dollars. The sales guys that sell these big business op leads will often work these sales for half an hour to several hours. I have never seen such high pressured sales in my life as the times I have visited biz op sales floors and watched them in action. The sales guys get a big chunk of the commission and I know that many successful ones will clear 6 figures in their commissions.
I know that there are legit biz op lead generators out there. Firms like Franklin-Covey have used this model, getting selected customers of their day planners to buy $1,000+ coaching packages to learn how to be more productive and effective. When I think of the cost of a seminar or conference, the fee is often over a grand and what do I get out of some of those that I go to?
My discomfort with this arena is those biz op guys who prey off of those who are desperate – those that are at their last hope and are trying to win big to escape debt or bankruptcy or financial ruin. Some business opportunity lead generators will target these guys, and convince them to put $5 grand on their credit card (which maxes it out) and sell them some product or service where only 1% of those who try ever succeed. Some of these programs would fail even if you had some of the best entrepreneurs around trying to work them. I have also found that some of the coaches for these firms are really not experts, but they are really “kids” – college kids or other inexperienced guy who is telling you what to do, not because he was successful in doing it, but because he is reading some script or book that tells him what to tell you. Do you really want someone telling you how to be successful at running a business if they have never really done it themselves?
If you are selling biz op leads, you can get a good price for the leads. I would try to discern about who I sell them to. You may be exposing yourself up to state or federal scrutiny if you sell it to the wrong crowd.
If you are a buyer of business opportunity offers - buyer beware!
Do you have a story about biz op deals you were involved in? Share it with us. We would love to hear about it.
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