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Display Rack Opportunities
The Set-Up: You may see newspaper ads promoting display rack business opportunities for the sale of various licensed products such as children’s toys or books or perfume among others. Promoters claim they’re affiliated with well-known companies and that their great products "sell themselves." Their pitches include some enticing claims: No selling. You can work from home. For an initial investment of $10,000 or so, they promise you’ll hit "display dirt": retail sales of $40 a day per display with annual profits of $100,000. All you have to do is restock profitable high-traffic display rack locations like malls, shopping centers, gift shops, convenience stores, supermarkets, and chain drug stores.
The Scam: The fact is that entrepreneurs who invest often are supplied with outdated or worthless merchandise and unprofitable locations. Many times, the merchandise has been returned as “unsold” by retail stores. Average daily earnings are minuscule. Investors in this type of “business” never make anywhere near the promised earnings. The merchandise is usually sold to you at full price so there is no room for profit. To make matters worse, most will never even recover their initial investment. $10,000 down the drain…..
The Cold Hard Truth: Many times your entire investment will go for "display racks and initial inventory." Plus, the promoter’s sales commissions on your purchase of products may eat up as much as 40 percent of your investment. Ask the promoter if you’ll be charged wholesale or retail prices for your initial inventory. If you pay retail, you’ll have to mark up the price to make a profit. That means you probably won’t move much inventory. Even if the promoter agrees to sell you inventory at wholesale prices, you may get out-of-date merchandise that never sold in the first place. Either way, you lose.
The Light At The End Of The Tunnel: Be sure to ask the promoter for a list of previous investors, as well as their addresses and phone numbers. The FTC’s Franchise Rule requires it, and any legitimate business should be happy to provide it. You should also get earnings claims in writing as well as substantiation. Insist that the promoter give you written substantiation in the disclosure document required by the Franchise Rule.
SOHO Jobs does not tolerate scams, tricks, misleading opportunities or any other solicitations made by the pond scum who are only after your money and not your skills. Contact our Scram Scams! division before sending any fees to a work-at-home opportunity. If the company is legit, we will let you know. If not, we will feature them in our weekly newsletter for all subscribers to see and avoid.
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