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Home Based Business Scams How to Detect and Avoid Rip Offs That Are Only Out to Take Your Money

 


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How do you detect and avoid home based business scams? What are the programs that are only out to take your money?

Though it's a cliche, I think the adage “if it sounds too good to be true, it is. " Home based business scams prey on your desire to make big money with little or no work on your part.

Business is all about exchanging a good or service for money. That means that there has to be a market for the good or service and that people have to be willing to pay your rate for the exchange.

One of my least favorite home based business scams is the “stuffing envelopes" scheme. The way this typically works is that you see a classified (either offline or on a site like Craigslist) that advertises that you can make $2 per envelope that you stuff. You're then asked to send $2 and a self addressed stamped envelope for more information.

The people who send the $2 are mailed instructions (the stuffed envelope) on how to duplicate the scam.

You can avoid home based business scams like this one by thinking about the transaction costs of the activity.

If a legitimate business like an insurance company needed 100 envelopes stuffed, they would probably assign one of their secretaries to do it. If they pay her $15 an hour and she completes the assignment in 30 minutes, it's cost them $7.50 to stuff the envelopes. Why would they pay you $200 to do the same task?

Further, if they had 10,000 envelopes to stuff, they would have a printing house do it with machines for a fraction of the $7.50.

So when you're evaluating whether an opportunity is a home based business scam, look at the costs involved. Do real people or businesses need this product or service at the price you can sell it for? If not, chances are good that it's a pyramid scheme or scam of some kind.

If you're wondering if the idea you're considering is a Home Based Business Scam , you should head on over to http://www.startingabiz.com

Starting a Biz does reviews on small and home based business opportunities. We're not afraid to praise programs that real people are using to provide goods and services to other real people or to businesses. We're also not afraid to tell you if something is a home based business scam.

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