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Riding The Ponzi – Hyip Investment Guide.
| By Kenneth Koh |
The story began when one of our LeadsLeap members complained that someone is advertising a scam program called Bux.to in our network. The scam ‘proof’ is given in this website:
http://www.techcrunch.com/2008/03/17/surprise-the-buxto-pyramid-scheme-is-a-fraud/
Because of this, I began my own assessment of this program to find out if Bux.to is really a scam.
For those of you who have not heard of Bux.to, it is a Paid To Click (PTC) program, where you are paid $0.01 for each website you personally view and $0.01 for each website your referrals view.
There is nothing wrong with PTC programs. From business point of view, each click costs the website owner $0.02, $0.01 goes to the member viewing the ad and the other $0.01 goes to the member’s sponsor. If the website owner charges $0.05 per click, which is a good bargain to most advertisers, he will make 60% profit. Good deal.
Before I continue, I probably need to tell you that I’m not a newbie in the PTC industry. To tell you the truth, I run Asia’s largest paid-to-read-email program, with more than 130,000 members. In other words, I know what I’m talking about!
When I study Bux.to’s business model, I found 2 things that make me feel uncomfortable.
1) Low advertising fee
Bux.to charges $19.10 per 1,000 member visits. This means an advertiser only pays $0.019 for each ad click.
Remember that Bux.to pays out $0.02 for each click? This means they are losing money for each ad click they sell.
To me, it is quite obvious that this pricing plan is not sustainable.
2) Selling referrals to members
Bux.to sells referrals to its members. The price is about $1 per referral.
I believe Paypal bans Bux.to because of this. (Bux.to is now using Alertpay as their payment gateway.)
To me, it simply doesn’t make business sense to sell referrals, unless my aim is to get rich quick instead of building a long-lasting business.
The reason is obvious.
If my members can make money from the referrals they’ve bought, it simply means that I am losing a lot of potential income in the long run.
If you don’t understand what I mean, ask yourself this question, “if you know that you can make $0.01 from Member-A whenever he reads an ad, and he can potentially read 10 ads a day (or earn you $0.10 a day), will you sell Member-A away for just $1?”
If your answer is no, why do you think the website wants to sell referrals for just $1 per referral?
I can only think of two reasons: 1) to get rich quick, 2) the website owner fails his maths.
Is Bux.to Paying?
If you google for Bux.to scam or Bux.to review, you will come across many people who are paid and many people who are not paid.
The general feedback is the payment is slow. The website says that members will be paid in 60 business days, but some people have waited for than 4 months and still not being paid.
It seems that they are now having a problem paying its members on time.
From my above assessment of the program, you can see that the program doesn’t have a long-term profitable business model. It may be very successful in the short run because many people can make lots of money in a short time. But in the long run, I do believe that the website will run into financial problem.
So is Bux.to a scam? You decide. You may be the lucky one who is paid.
For me, I’m not comfortable with its business model. I don’t believe that such a model is sustainable.
If you are advertising for Bux.to, I strongly encourage you to change your ad.
| By Kenneth Koh |
Have you come across a website called Legit Online Jobs? It is a scam or it’s for real?
Before I continue, I need to tell you that this is not a review site trying to lure you into reading this page and then convince you to buy Legit Online Jobs. Let me be frank. I won’t buy this product if I were you. I’m just using this product for discussion purpose.
How to identify online scams?
In the past, it was pretty easy to identify scams. Scammers usually use beautiful stock photos for their testimonials. Their graphic editing skills are so poor that it is obvious that the earning proofs are doctored.
However, today’s scammers are smarter and they can produce fake testimonials and fake earnings like real!
The only way to decide whether a product is a scam is by studying its business model.
Below are some online business models typically used by scammers (or I should say opportunists).
1) Ponzi scheme
A Ponzi scheme usually takes money from you and promises that you will earn more later. The extra money paid to you usually comes from the subsequent members who join the scheme. This means new members are supporting old members.
For example, if a company promises that you will earn $500 every month and you only have to invest $10,000 one time, it’s obviously a scam.
Such a business model is not sustainable and the company will soon run out of cash. Yet, many people choose to believe in such a model.
Nowadays, there are many different forms of Ponzi scheme, from HYIP to paid autosurf programs.
Basically, when joining such programs, you have to ask yourself whether the business model is sustainable. If you can’t think of a logical reason why the business is sustainable, chances are it’s a scam.
2) Make money taking surveys
In this model, you buy an ebook that ask you to sign up many surveying companies. When you answer the surveys, you will make money.
This is not really a scam, unless the author uses fake earnings and fake testimonials. But it is definitely not the correct way to make serious income online.
3) Make money typing at home
In this model, you buy an ebook, in which you are given a list of companies and many sample ads. All you have to do is type the ads into Google Adwords campaigns and money will roll in.
Again, I can’t say that it’s a scam. But chances are you will lose money.
What you are doing is a form of affiliate marketing, where you advertise for companies and make a commission out of it. Affiliate marketing is definitely a legitimate online job but it is not as easy as typing a few sample ads and make money automatically.
4) Make money promoting the author’s ebook
In this model, you buy an ebook that teaches you how to promote that ebook. Usually, the author will include other information such as how to build and promote a website. But the main focus of the ebook is to promote the book itself.
A few years ago, there was a product called Ultimate Wealth Package. It uses such a business model and is now banned in Clickbank. Ultimate Wealth Package may be banned, but there are many other products with a similar model.
So Is Legit Online Jobs A Scam?
I need to be frank with you that I’ve seen my advertisers making money simply advertising this product, Legit Online Jobs. The sales-copy is well written and there is no doubt that it’s pulling a lot of sales for its affiliates. Apart from that, I see some similarity between this product and the last 3 business models I’ve mentioned above.
I wouldn’t say it’s a scam. It is just another cleverly-crafted business to profit from desperate work-from-home seekers.
Online Jobs Scam
