Why Are Internet Malls A Scam?

I have yet to find a mall that people actually buy from. Paid to Join MALLS generate and distribute monies from members (Elaborate Pyramid Schemes). Free Malls like Cognigen, well all I can say is that I have over 1800 people in my Cognigen team and I haven't made a red cent. I have yet to buy anything either! But I do like Cogigen's Free Affiliate Site. Who knows maybe things will change and I will have the team ready to go.

One more thing... Auction Houses are the same. I have a huge team in Bidway and I have made very little. But the potential is very good.

Everyone wants to cash in on the Internet explosion and the rapid growth of e-commerce on the web. Every week some 20 year old opens a new Internet company with an IPO on Wall Street and becomes a billionaire overnight. And Internet Malls look like a great opportunity for the average person to participate in this new financial frontier. At first it was simply Internet "Discount Shopping Clubs", such as "Top Secrets" where you could become a member for only $198, plus have the opportunity to sell club memberships to others, as well! 

The fact is, the only reason anyone bought the membership was so they could have the right to sell it to others. The "Discount Shopping Club" was a virtually worthless commodity. And now the network marketing fad is "Internet Shopping Malls". They are showing up on the Internet at the rate of two or more a day, it seems. DHS, Free Store Club, PriceNetMall, teamglobe.com, SkyBizMall, PrimeBuyMall, Cognigen, Going Platinum, Cell Phone Tool Box and many, many more. The people who start these malls make a lot of money, because people unfamiliar with the Internet really believe they are on the cusp of a great new income opportunity. And the first few levels in the downline make money, too. This generates checks they can wave at their new recruits and the MLM "get-rich-quick" fever quickly spreads. 

This works well with any new and different product and good honest hard-working people invest a lot of their time, effort, money and emotions into promoting their new Internet "business". First came the subscription web sites offering links to other people's "free stuff", producing MLM's pyramid schemes such as "Free4U Online", "thewwwlink.com", "FreeMart Online", and "YourFreeMall". All scams... All failing. And now "Internet Malls" are the MLM "sizzle" gimmick. 

So are these malls a genuine business opportunity or a potentially illegal MLM pyramid scheme and money game? Here are parameters posted by the FTC: "Multilevel marketing plans, also known as "network" or "matrix" marketing, are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you will receive commissions -- for both your sales of the plan's goods or services and those of other people you recruit to join the distributors. Multilevel marketing plans usually promise to pay commissions through two or more levels of recruits, known as the distributor's "downline." If a plan offers to pay commissions for recruiting new distributors, watch out! 

Most states outlaw this practice, which is known as "pyramiding." State laws against pyramiding say that a multilevel marketing plan should only pay commissions for retail sales of goods or services, not for recruiting new distributors. Why is pyramiding prohibited? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people -- except perhaps those at the very top of the pyramid -- lose their money." http://www.ftc.gov/bcp/conline/pubs/invest/mlm.htm 

All of the above mentioned "malls", "free stuff" web sites and "SkyBiz" are smart enough to present their opportunities in a way which dodges the FTC definition. But take a look at the "product" they are all selling- Web sites - cyberspace - virtual reality - electrons... The cost to self-replicate all of the web site design including the personalization involved for each web site business owner amounts to pennies. So if you buy a "Tripod" from SkyBiz for $330 or three standard BigSmart.com malls for $929.85, the money is almost all pure profit. There are better products available which offer more for much less money in every case. So the product itself has virtually no intrinsic value. 

Are these products useful? A few people will use their SkyBiz web sites for fun and for posting pics of the kids so Gramma can see them from across the country. But this could be done elsewhere for free (with or without sponsor advertising). And will the Internet public shop at these individual "Mall" web sites? No! 

Why does anyone believe that Wal-Mart wants to see everyone in town own their own Internet shopping mall? There is no evidence that a need or demand exists for millions of Internet shopping malls. A product no one really needs, wants or asked for, sold at an outrageous price, which is pure profit. MLM pyramid scheme designers are clever enough to use a phony product sold at a high price which pays large "commissions" to new recruits. In fact what is happening is that people are making money by simply recruiting new people and being paid from their investment in the new "business opportunity" and nothing else. 

Their only income is from an ever-expanding network of new people being brought into this shell game, until the largest leg and the lowest level of the MLM pyramid collapses and the whole game ends. The people at the top get rich, the folks in the upper levels do well, but the majority of the people get burned. But at least these people still have their Internet Malls, right? They can make money from commissions paid on mall sales, right? Not likely in the first place. More importantly, once the MLM expands as far as it can and the money stops flowing, the owners will vanish to an island in the Caribbean, the ISP will turn off the servers, and the entire Internet Mall community will vanish in an instant. No malls, no refunds, no commissions. Every bad MLM opportunity makes money for the people who start it. And where does that money come from? From the thousands of people who do not research these companies and their products before investing their hard-earned money into them. The Internet Mall fad will pass - and the sooner the better!

For further research on many MLMs and Work From Home Businesses please visit the World Wide Scam Network.

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