Was Skybiz a scam? You may have heard a little about the Skybiz scam, so here is a basic overview of what happened to this company which was actually growing very well before it got shut down by the Federal Trade Commision (FTC).
The Skybiz MLM operated in over 220 countries and hosted more than two million websites with high promises of making people a lot of money in a very short span of time. The Skybiz home business grew very quickly. Shortly after it started however, the FTC had taken notice of its operations and pointed out that Skybiz isn’t actually a legitimate MLM business but rather a pyramid scheme!
The products involved with the Skybiz scam.
The primary product of Skybiz was WebPacks that were being marketed and sold through various affiliations. Skybiz distributors had to sell nine WebPacks before they could receive any form of compensation. This didn’t favour the distributors at all, as they basically didn’t see any money for a very long time. The company ran very similar to any MLM network organisation, however individuals who joined Skybiz were required to market a specified number of WebPacks before they could be compensated at all. This Skybiz review has looked into the background facts about what took place when the company was flagged and pursued by the FTC for its apparent pyramid scheme operations.
What actually created the Skybiz scam? What made it a pyramid scheme?
The Skybiz scam basically came about because it delved into only selling memberships into the business. The company attempted to defend its stand as a legitimate MLM business by basically saying that they actually do offer services through providing training to people through their web-hosting services. Nevertheless, the FTC specified that aside from products and services, the company has to provide something that people are willing to buy because they actually want to buy it, rather than simply wanting to make money and gain compensation. This was basically the downfall of the company, and basically why it got labelled as a Skybiz scam. It failed to defend its operations with the FTC at all. According to the FTC, Skybiz also made false claims about their earnings, and only an extremely tiny percentage of distributors were actually making any income at all.
A pyramid scheme is when a business wants to get your money and then use you to recuit other people into the organisation. MLM or network marketing on the other hand is more about moving product through the organisation. The whole idea behind direct sales or MLM is that the more distributors an organisation has out there moving product, the more product the business will actually be able to sell.
Skybiz Scam – Is this a good case study to learn from?
You bet it is! This Skybiz scam review gives a basic overview of what happened with this business, and is a great case study to learn from when you’re looking for a suitable opportunity to join. There are thousands of network marketing companies out there, and there will continue to thousands more into the future so it pays to know what makes a pyramid scheme, and what makes a legitimate network marketing business.
At first glance, Skybiz would have looked like one of the best network marketing companies to get involved with, and many people blindly joined this business. The most important thing to realise when looking at any opportunity is that you have to make money from the sales of product – NOT merely signing up distributors. Keep that in mind, and chances are you should be fairly safe with your MLM business.
REMEMBER – the money should come from the movement of product NOT merely signing up distributors.
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