Mail Order Blunders

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MAIL ORDER BLUNDERS AND HOW TO AVOID THEM

PART ONE

At the very start of this publication it is necessary to define exactly what we mean by the term "mail order". What particular field of mail order (there are three) we are referring to when we go into detail about avoiding mistakes. Mail order in Britain can roughly be divided into three groups.

GROUP ONE:

The big specialist mail order companies, such as Kays, Littlewoods, Burlingtons etc.....who operate through agents who sell from huge, glossy, coloured catalogues and who offer a gigantic range of goods at highly competitive prices. Because goods are sold on a credit basis with easy weekly payments, this method of purchasing goods has proved enormously popular, especially with families in the lower income groups. Such companies owe much of their success to their ethical standards. Goods are exchanged or refunds made with the minimum of fuss or quibble. Service is prompt, efficient, and quality equals that of the shops and stores. Public confidence in this type of service has grown over the years and the trading practices of these firms has set a standard for all who trade by mail.

GROUP TWO:

The many firms who sell solely by mail order or as an additional retail outlet. If you start a page one of Exchange & Mart and read right through to the back page, there is nothing but mail order advertisements. Literally thousands and thousands of firms selling every conceivable item by mail. Press, radio and television advertising contains a considerable proportion of mail order advertisements. Some experts calculate that 30% of all retail selling in the UK is by mail order. Anything from garden sheds and exotic pets to hi-fi and lingerie.

GROUP THREE:

This is the group which mainly concerns us in this publication. This group consists of the home-based mail order dealers. These are numerous and the vast majority are operating on a very small scale, often part time and usually severely under-capitalised. It is amongst this third category that real problems arise, resulting in a very high failure rate. Few can afford to advertise extensively in the national media and apart from the occasional small classified advertisements, their promotional activity is usually confined to small mail shots or advertisements in modest circulation mail order publications. Often such people come into the mail order field with no knowledge or experience and a total lack of professionalism.

These small scale mail order dealers are usually confined to certain activities through a lack of working capital, so they are limited to activities that do not require much outlay. Many join multi-level marketing schemes as the outlay is usually £25 or less. Others sell information by mail, usually in the form of reports, manuals, guides, money-making plans, etc. Most are based on the "earn big money" or "make a fortune" formula. Promotion is usually based on small scale direct mail campaigns, often amounting to no more than a few hundred pieces of mail, or by advertisements in mail order magazines and ad-sheets which seldom have a circulation of more than one or two thousand. Thus the small scale mail order operator is usually operating in a business world where everything is on a small scale.

Now we must define exactly what we mean by 'failure' in mail order. Most people who enter mail order in this third category do so on a part time basis but entertain hopes of eventually leaving their normal occupation and going into business full time. Few, very few, ever achieve this objective. Those who don't can be classified a failures. Of course, there are people who come into mail order with less ambitious ideas. Such people set their sights a lot lower and are content to merely supplement their normal income. They often do achieve this objective and a clear profit of anything up to thirty or forty pounds a week in not unknown. Such people cannot be classed as failures.

But the majority of those approached in the R.I.S. survey were forced to admit that their initial hopes were for something much better. Perhaps they were influenced by the hyped-up, and often absurd, claims made by mail order advertisers who are themselves operating on a very modest small scale basis. What many beginners in mail order do not realise is that those advertisers who claim to be able to give you some fool proof plan to make a fortune, to turn you into a millionaire, are themselves almost certainly struggling along on a shoestring budget. They are very probably already in the category of mail order failures.

Most people get into mail order almost by accident. They have no real expertise, no professional experience. Perhaps they started off by replying to a mail order advertisement, the consequences of which will almost certainly be that they are entered on a re-sold mailing list, to be subsequently bombarded by unsolicited mail. Perhaps the most hyped-up advertisements in mail order are those to recruit people into multi-level marketing schemes or into money-making plans.

Now I want to mention the three letter word which symbolised those factors which contribute most to failure in mail order. The three letter word is GAP. G is for Gullibility, A is for Amateurism and P is for Poor-image. Let us start with gullibility. If one thinks of all the hyped-up, catch penny schemes which have come and gone over the past five years, leaving hundreds of people in this field of mail order much poorer if not wiser, then you can understand why so many of them must be considered gullible, or to use that cruel American term - suckers.

The R.I.S. survey, on which this publication is based, revealed that 93% of those approached admit to having been caught by some of the daft catch penny schemes which have floated around the mail order field over the past five years. These include the perennial Edward L Green chain letter; the even more absurd Nelson Robards chain letter; the disastrous Property Syndication Network; the even more disastrous UK Fund Raising Club - disastrous, that is, to everyone except the man who started it! Then there is the idiotic Money Network. This promises £100,000 to anyone who will invest a mere ten pounds. Then there was the doomed culture growing scheme on which scores of victims lost money they could ill afford. I won't even try to list all the MLM schemes which were short-lived and which totally failed to live up to their promises. It is a sad fact that of the 164 MLM schemes launched in this country since 1985, only a handful have stayed the course. The average life on most was less than eighteen months.

So here we have one reason why people fail in mail order - they are too gullible. They actually believe the nonsense which makes up 90% of mail order advertising. So the first golden rule for those who don't want to be mail order failures is to be extremely cynical. Take all those claims with a large pinch of salt. Be reluctant to part with your money. Let me give you a tip for sorting out those who claim they are millionaires, or claim they have already made huge incomes and who offer to let you join them in the ranks of the immensely rich - at a price.

Just write them a letter. Say you are very interested in their wonderful money making offer and will probably join, but you would first like to visit them at their home so you can at first hand what this wonderful lifestyle is like and to discuss how you can then get a similar high standard of living. Ask for a definite date and time for you to visit. Do this even if you have no real intention of making such a journey.

Now I don't think you will be all that surprised that if you get a reply it will almost certainly contain one of a variety of ingenious excuses why it is not possible to offer you such an invitation. They are just going away on holiday, or they have relatives visiting them for a long stay. It just isn't convenient right now but perhaps sometime in the future. Another excuse is, we have the decorators in at the moment but I could meet you at a nearly hotel. Anything to keep you from visiting their actual home. Of course, I am talking about the type of advertisers who advertise in mail order magazines and ad-sheets. It does not always apply to those who advertise in national publications.

One gentleman who advertises with a regular display advertisement in Exchange & Mart for people to join him in selling oil paintings is very wealthy with a large house in the north of England and a Rolls-Royce in his garage. But he has never objected to people coming to visit him. Do not think he is an isolated case, there are other highly successful people who never leave their home to work and are wealthy. But they form only a very tiny minority, more about them later. So, back to this matter of gullibility. You must trust no offer until you have carefully checked it out. No matter how well written the literature. No matter how attractive the offer may be. No matter how impressive the company making the offer may appear to be. You take nothing on trust.

We have dealt with one of the main reasons for failure, gullibility, a touching faith in the promises of 'make a fortune' schemes. Now we go on to the second of the main reasons for failure. A is for Amateurism. There is a total lack of professionalism in British home-based mail order.

Nowhere is this more apparent than in direct mailing campaigns. Almost all those I know who have used direct mailing in mail order and those approached on the R.I.S. survey, admit to having felt some disappointment at the results of their mail shots. All too often the mailing list gets the blame. I would agree that most of the mailing lists on offer in mail order are pretty appalling. They are usually full of errors because the compilers have little or no geographical knowledge and thus will often miss a mistake. They will not instantly recognise a wrong post code. A professional compiler knows them by heart. They will usually fail to notice an incomplete address, simply because they don't know it is an incomplete address. I know there are still a lot of people who do not use post codes and for this reason one does have to be careful to address fully if no post code is used. If, for instance, an address is given as 51 Union Street, Newcastle. Then there is no way that that letter would be delivered. Why? Because there are three towns called Newcastle in the United Kingdom. Or if the address was, say, 16 Oak Avenue, Sutton. There are thirty three places called Sutton in the UK. In the old days the Post Office would have sent such a letter to and fro to each Sutton until it was finally delivered. That was before Thatcher, and now the Post Office has to be competitive and such letters go straight into the dead letter bin.

I previously said that most mailing lists offered by mail order dealers are appalling. Apart from the fact that some are long in the tooth and produce a high proportion of 'gone aways', they are also inclined to contain a number of duplicates. That is, the same name and address repeated more than once. Add the incomplete and incorrect addresses and the chances are that only about 70% of a mail shot will reach its destination. But even this percentage of wastage will not account fully for a mail shot being a total slump. So what else can be blamed?

Well, if you receive plenty of unsolicited mail, you will know that if something new comes onto the mail order scene, such as a new MLM scheme or a new money-making plan, you will know that you don't just receive one piece of mail on that offer. I personally have received up to half a dozen in one day for the same MLM scheme. People in MLM or who promote new money-making schemes all seem to be very busy spending time and money mailing the offer to people who have already received it many times. It would seem that most of them are using the same mailing list. The very first dealer to start mailing out probably gets a few replies from all those who are interested, so there is little or nothing left for all those who follow. Beginners in mail order, and even some who are not beginners, will receive details of some money-making scheme suitable for those prepared to promote it through a direct mail shot. It could be something like Money Network or the Easy Money Business Formula, which totally and utterly fail to live up to their promises of riches, and which have already been worked to death by other doomed-to-disappointment dealers. This is the main reason why mail shots flop, much more than faulty mailing lists. So many dealers are going over already worn ground, wasting time and postage.

There is another reason why direct mail shots undertaken by amateurs fail. I have previously mentioned an almost total lack of professionalism amongst mail order dealers. This become glaringly obvious when one looks at the way most of these mail shots are carried out. Professionals would never dream of undertaking a direct mail campaign without first undertaking a 'pilot' shot. This is a test mailing of only one or two hundred pieces of mail. Then, one waits to see the percentage return on the pilot shot. If it shows 2% or more, then that is good y mail order standards. If less, then there is something wrong with the offer and one needs to make a careful examination to find out why there has been little or no response to the offer. Only after this reasonable return, and when a further pilot shows a reasonable return, should all the mail be sent out.

I have often been asked why it is that in the USA there are plenty of people running home-based businesses and making good full time incomes, sometimes very high incomes. Yet in this country the number of people earning a full time income from home-based mail order is comparatively tiny? One part of the answer is that the Americans are inclined, like the Japanese, to be highly competitive and professional in their approach to business, be it a large scale enterprise or a one man home-based business, whereas we in Britain are inclined to undertake a business enterprise in a slap-dash, amateurish way. That is the British way. Mrs Thatcher has done something to try and change this attitude, but she has an uphill task. This blundering amateurism runs right through our society. Of course, it is great for the few who do operate on a professional basis. Many of the really spectacular successes in home-based mail order were made in the pre-Thatcher era, in the sixties and seventies, when this country was a world-wide joke, living on borrowed money and sinking ever deeper into debt. It was a good time for those who followed the American methods of money making because there was little or no competition.

Let us make a comparison between the American and British mail order dealer. The American entrant into home-based mail order is very unlikely to just drift into it. America, like Japan, is a highly competitive profit motivated society. The amateur does not survive very long in business. No American would dream of starting a business without some prior business experience, knowledge or tuition. It should also be remembered that, unlike over here, Business Studies are included in the curriculum of most American schools. If the American starting a home-based mail order business had no previous experience at all, then he would mot likely start attending a business college, or take a correspondence course. As an alternative, he would probably seek the assistance of a professional business consultant who specialises in mail order. There are plenty of such consultants in the USA. There are only a tiny handful of professional business consultants in this country who specialise in mail order. But British beginners in mail order would seldom even think of seeking expert advice. The British attitude is - anyone can do it. They do not think it requires any special skill or knowledge, which is probably one of the main reasons why the vast majority will never get beyond the peanut level of trading.

Yet professional help is readily available for all sorts of services. I was reminded of our amateur approach only the other day, when one of the usual unsolicited circulars came through my letterbox. It is an impressive circular, beautifully printed on expensive paper, with a nice logo and altogether an expensive three A4 pages.

It was offering a package deal of self-publishing. Full Reproduction Rights, both on the three publications on offer and on the expensive three-page sales literature. The total price for the deal was £75. Expensive but still an interesting proposition.......until one began to examine the text a little more closely. Then one began to experience that familiar sinking feeling one gets too often when reading such literature. At least, you will get this feeling if you are experienced in this field and know what to look for.

As with most of this type of literature there was a surprisingly high number of spelling errors, punctuation was also very bad and it was very obvious that the writer had little knowledge of the grammatical rules that apply to written English. Apart from this it was obvious that the text had, as usual, been written by an amateur. It lacked that pulling power that can only be provided by a successful copywriter. They are the people with the deft touch and the flair necessary to induce people to take up an offer.

So anyone receiving this literature would, at first glance, be impressed by the expensive, well printed material. But as they began to read, that first impression would quickly disappear, especially if it was being read by a person of reasonable education, to be replaced by mild amusement and contempt. In the very first paragraph of this circular there are several errors and the style of English is clumsy and contrived.

The point I am making is this. Whoever compiled this literature and sent it out has probably had a very low response and has, no doubt, sent an angry letter to whoever supplied him with the mailing list. They always blame the mailing list, often wrongly, when there is a poor or nil response. No educated person is going to contemplate sending off for that package when it is obviously written by an uneducated person. The view will be taken that if the circulars are that bad, one shudders to think what the publications of offer will be like.

Alas, there will be some who will part with their money for this deal. These are people whose own standard of education is on a level with that of the person who wrote the literature. They will not even notice the bad English and the errors. This observation is based on one of the conclusions in the R.I.S. survey. They gave the following estimate of standards of literacy amongst people engaged in home-based mail order:

3% are illiterate
8% are semi-illiterate
49% are poorly educated
32% are reasonably educated
8% are well educated

So you can see that there are rich pickings or the dream peddlers who prey on those in the home-based mail order circle. Those who are looking for ways to become wealthy.

When mailing lists of people in the mail order circle are sold, they are nearly always described as a list of 'Business Opportunity Seekers', which it is as the two terms - home based mail order dealer and business opportunity seeker - are inter-changeable and mean the same thing. That is why some people get angry when they buy a list of business opportunity seekers and find the same old familiar names on most of them. But it could not be otherwise as the world of the home-based mail order dealer is a relatively small one.

If any of what I have written so far has in any way given the impression that I have a poor opinion of those involved in home-based mail order in this country, that would be wrong. I know many of those who are in mail order. In most cases it is not lack of effort that is to blame. Some sacrifice a lot of spare time and deny themselves small luxuries to support and maintain their business enterprise. Such people truly deserve to be successful if hard work is the criteria, but alas, sheer effort is never enough, though it does help. An inexperienced swimmer can put in as much, or more, physical effort as an experienced swimmer, and yet only cover a fraction of the distance. While the novice thrashed about and expends a great deal of energy to little purpose, the experienced swimmer glides effortlessly through the water. That really sums up the difference in this line of business between the amateur and the professional.

Again, we have come back to professionalism. I gave an example of a complete lack of it in that appalling literature for the publishing package deal. But that was not an isolated instance of blundering amateurism in mail order, most such literature is of a similar poor standard. The cot of professional assistance of a very high standard is probably lower than you might imagine. For instance, professional proofing of an A4 circular with the guaranteed elimination of all grammatical, spelling and punctuation errors, plus suggested revision of any clumsy or unsuitable sentences or phrases. The cost of this? One lousy fiver. Yes, just five pounds, it is as cheap as that.

Now if that disastrous publishing deal had had their three page literature professionally proofed it would have cost them fifteen pounds. They spent a lot of money on the printing of their good quality literature, but made one small economy which proved disastrous.

Let me give another example. In a recent issue of his influential and widely read newsletter, Ken Walker had a lot of fun poking ridicule at another appalling circular. Ken has a sardonic sense of humour as shown in a recent Mercury editorial when he ridiculed the Klondike money-making scheme. Now he has turned his attention to a circular which obviously caused him much amusement. It was offering a package deal on how to run a C.V (curriculum vitae/resume) consultancy.

Now I am sure you will agree, writing C.V's or offering to show people how to write C.V.s, indicated a good command of English and you would expect the people making this offer to be very careful to ensure the text was perfect. Or, that if they were not capable of ensuring this themselves, they would employ professional help.

But no, the circular they put out was riddled with spelling errors, punctuation was dreadful and the text was grammatically clumsy. Hardly likely to inspire confidence in their ability to write good C.V.s or teach other to do so. Another prime example of good old British amateurism. Professional proofing of that disastrous circular would have cost them just five pounds. If there was room in this publication, I could give numerous other examples of the illiteracy common to mail order literature. Suffice to say I strongly recommend that you seek help in drafting and checking ALL your literature, be it circular, brochure, manual, guide, report or whatever.

Now to go on and discuss some of the other blunders most common in mail order. Many people in mail order publish and sell all kinds of how-to publications. I suggest you do not make the mistake of offering a money back guarantee in your advertisements. Providing you are ethical and honest you do not have to give such a guarantee and if you do, you leave yourself wide open to the attentions of what are known as 'refund rogues'. There are people who watch for any advertisement offering a money back guarantee. They will buy your publication, read it, perhaps photocopy it, and then send it back for a refund.

So don't give any money back guarantees. Then you are not obliged to make a refund PROVIDED and I do emphasise that work provided, your advertisements contain accurate information and do not include any misleading claims. So leave out those stupid claims about potential earnings. Not only does it lay you open to legitimate demands for refunds if the claims prove to be false, but it is also illegal and the regulations on misleading advertisements have been tightened up. So if you claim a person buying your how-to manual will be able to earn £250 a week in their spare time after reading it, you could find yourself in deep trouble unless you could provide solid proof in the form of people who had actually earned this amount. So don't make silly claims. The Office of Fair Trading is beginning to crack down on this.

Another mistake made by many in mail order is to believe the claims made in the literature of desk top publisher who advertise how-to manuals and get-rich-quick publications. The truth is that well over 95% of the authors of such publications are not really qualified to write on their chosen subject. Very few manuals are written by professional writers. To give some idea of the general standard of these manuals one needs only look at the comments on this subject in that marvellous yearly publication 'Recommended & Approved'. This publication not only exposes all the current rackets, scams and cons in mail order, but also helps to pinpoint those in mail order who are honest and who are not.

'Recommended & Approved' is published by the M.O.D.S organisation and they commissioned R.I.S. to make a detailed scrutiny of mail order manuals of all kinds, and to list those they thought worthy of recommendation. No attention was paid to format, or to whether the publication had glossy covers, professional binding or as to whether the pages were properly printed or just photocopied. None of these things were considered important. The only criteria was the contents, the actual text. Judgement was based on the author's grasp of his subject and the value of the information given.

The astonishing outcome of this scrutiny was that of the 436 publications thus scrutinised, R.I.S. was only able to recommend a mere twelve as representing true value for money. The rest were described as 'over priced rubbish written by amateur, and usually anonymous, authors who were not really qualified to write on their chosen subjects'. I hasten to add that the publication you are now reading had not been released at that time, and it is a great source of pride to me that it has been added to the R & A approved list of value for money publications.

Another mistake make by people in mail order brings us to letter P in our symbolic GAP. P is for Poor-image. Mail order selling differs from normal retail selling in that your customers are never likely to see you. So the only way they can judge you and your business status is by the image they form of you. For this they have to rely on the quality and presentation of the literature you send them. Yet of the 600 mail order dealers involved in the R.I.S. survey, less than one third had properly printed letterheads. Less than one tenth gave a telephone number on their letterheads. Thus is most cases the image presented by the majority of mail order dealers is very poor indeed.

Peter Head once wrote "It's not who and what you are that counts, it's what people THINK you are that's important". It is worth spending some time, effort and money on image building. Image, how your potential customers perceive you, is vitally important.

Now I want to deal with one of the most common pitfalls which ensnare the unwary mail order dealer. You will sometimes see advertisements offering a print and mail service. You send a camera ready master copy of your circular to the advertiser and he, or she, will print (or more likely photocopy) an agreed number of copies and undertake to mail them for you to suitable recipients. Charges are usually in the range of £60 to £80 per 1,000 or £120 to £150 for 2,000. On the face of it this looks like a good offer. Postage along on 2,000 at current second class postage rates would cost you £340. The print and mail offer is based on the fact that he will include other (non conflicting) literature with yours. As he can probably get up to nine circulars in the envelope for seventeen pence, he still makes a good profit.

But here I come back to that familiar feeling of so many home-based mail order dealers, a touching belief in the claims made in advertisements. Just suppose you decide to send off your money to have 2,000 circulars printed and mailed. Firstly you have no way of checking to ensure that 2,000 circulars had in fact been printed and mailed. For all you know 50 to 100 circulars had actually been printed and mailed. In the case of certain dubious operators in this field, I strongly suspect that is exactly what happens. The shark knows he is unlikely to get a repeat order from you once you have checked results, so he isn't all that bothered. It's a one-off rip-off and perhaps he undertakes only a token mailing or none at all.

Now I am not suggesting for a moment that all print and mail offers are phoney or dubious. There will be some who fully intend to honour that agreement and who will put out the full 2,000, no matter how long it takes. Ah, there we have it, no matter how long it takes. I have previously mentioned that most home-based mail order dealers operate on a very tiny scale. Outgoing mailings averaging out over a year will often be thirty or less pieces of mail a week. Just think how long we are talking about for the average small dealer to clear even a thousand circulars. So be very careful about taking up such offers. There are honest people who offer this service, but there are others who are not so honest.

PART TWO

No publication on the subject of mail order blunders would be complete without mention of the thorny subject of multi-level marketing. I mentioned earlier that we have seen 164 MLM schemes launched among thick clouds of optimism, hype and hope, over a short five year period. Most bit the dust in ignominious and disastrous fashion. Most did not last twelve months. As I write this, I have jut heard from a reliable source that one of the biggest and best known MLM schemes will fold within the next twelve months. This does not mean that all MLM schemes collapse. Herbalife, Unit-vite and Amway have lasted the course and are still with us. But the fact does have to be faced that the vast majority have a life expectancy only slightly better than that of an over-enthusiastic kamikaze pilot. The main appeal of any MLM scheme is that it is very cheap to join. Twenty five pounds is usually enough to get you in as a participant. It is highly popular with those who lack the capital for starting any other sort of business. So if there is twenty five pounds burning a hole in your pocket and you are inclined to participate in MLM schemes, please take note of the following guide lines. Thus you stand a better chance of avoiding the many mistakes one can make in choosing an MLM scheme.

Remember, very few of the 164 MLM schemes active since 1985 are still in existence. Most have a very short life. In fact less that one in ten is worth any consideration. The best way to choose one of those which stands a chance of showing you a modest return on your investment is to strictly observe these guidelines.

Firstly, you will notice I said a 'modest' return on your investment, because you should net expect anything more than that. The more hype, the more fancy promises about possible earnings, the less that scheme is worth considering. Happily, the regulations on running MLM schemes have recently been tightened up. This should eliminate a lot of those silly claims which in the past drew people into MLM schemes which made absurd promises they couldn't keep.

Hopefully, we have seen the last of such daft claims as: 'Mrs Emily Sludge of Wapping made over £7,000 last month and expects to double that amount next month.' Many MLM schemes used to make this type of claim about the earnings of participants. Seldom, if ever, was it true. Under the new regulations an MLM promoter who makes such claims will not only have to prove these claims right to the hilt, but he will also be required to provide firm evidence that AT LEAST 50% of participants were also earning an amount as high as that of the person named.

Insisting on 50% of participants' earnings being the same as the case quoted in advertising should stop a trick being used by a number of MLM schemes in the past and known in the business as the 'image scam'. This is how it works. The new MLM spends a lot of time and effort in building up special down line for someone carefully chosen. Someone trusted by the promoter. This star participant will be given a specially chosen team with which to form a down line. Tremendous efforts would go into ensuring that the chosen participant had at least one bumper month with very high earnings. Then that months earnings would be quoted on the literature as if it was typical of possible earnings by participants. So a claim that Emily Sludge earned £7,000 last month might be true, but it would not reflect the real potential earnings of genuine participants who part with their twenty five pounds.

Another trick was to use what is known as the 'big cheque scam'. Sometimes in the literature you would see a photograph of a big, fat cheque, or even a photograph of someone being handed a big fat cheque. But think about it. There is nothing to stop you or I taking out a cheque book and writing cheque for ten thousand, a hundred thousand, or even a million pounds. It does not mean a thing. A cheque only has any significance when it's actually used in a financial transaction.

Over three quarters of those approached in the survey were participants, or had been participants, in one or more MLM schemes. Almost all based their decision to join on the claims made in the literature and nothing else. This revelation would shock any ordinary business person, but within the home-based mail order circle it has always been normal practice to accept the claims made in literature at face value. No serious attempt is ever made to check out the validity of the claims. No one ever thinks of probing beyond the literature and finding out just who is behind the company making the offer. Though some MLM companies are ethical, others are not above using a variety of dubious methods to recruit new participants.

I don't know if you have ever attended an MLM seminar? If you have, I have no doubt you found it quite an experience. If you have never been to an MLM seminar........count yourself lucky. I have been to several in the interest of getting an overall picture and I did not get caught up in the general mood of hysteria and euphoria. If you do go to an MLM seminar, by on you guard. There are two types. The recruiting seminars aim to attract new participants, whereas the other type is meant to recharge existing participants and perhaps restore their flagging enthusiasm. People in mail order are prime targets for MLM recruiters, in fact the overwhelming majority of MLM participants and drawn from the ranks of the home-based mail order circle.

At a recruitment seminar, every psychological ploy in the book is used to create the right, highly charged, atmosphere and engineer the slow build up to wild enthusiasm and near hysteria. These techniques are not new but they can be effective. They have been used at political conventions and rallies. For evangelical crusades and religious revival meetings. Japanese industry used some of these techniques to constantly motivate their workers to incessant high productivity.

Modification of these techniques for use at MLM seminars seems to have been far more successful in the USA than in this country. Americans seem more receptive to mass suggestion techniques than the British. Television evangelists who have turned fundamental religion into a multi-million dollar industry in America would have a thin time over here. Most major MLM companies have now dropped the seminar method of recruiting. But some still use it and if you do go to one of these events, prepare yourself for lots of hype, high pressure salesmanship, and, to quote an immortal phrase, 'a certain economy with the truth'.

The whole aim and purpose of an MLM recruiting seminar is to get those attending to sign on the dotted line and part with their twenty five pounds, and probably commit themselves to monthly purchases of the product which may, or more possibly may not, be easy to sell. So if you do attend one of these seminars do not get caught up in the cleverly created atmosphere which could cloud your better judgement. SIGN NOTHING while at the seminar. And if Emily Sludge is there, describing the huge sum of money she makes every month, keep in mind that she is almost certainly lying through her teeth.

The home-based mail order dealer who is determined to join an MLM scheme needs to be very cautious and highly selective. There are three of four MLM schemes which seem to have done better than the rest. Why have these schemes done better than the others? It would seem that these particular MLM schemes which had a considerable degree of success have urged their participants to operate on a LOCAL basis, rather than trying to operate through the mail. These few successful MLM companies know that their participants will get far better results when operating in this way. The MLM companies which have had the sense to realise this important fact include two promoting perfumes and one promoting a range of slimming products. I have actually talked to participants in these better schemes who do make a good income.

But excluding these better schemes, the majority of the mail order circle who, in the past, have been involved in multi-level marketing schemes and parted with their twenty five pounds or so, maybe more than once, and who should have learnt the hard way that they are not going to become extremely wealthy through MLM, these very often learn nothing from their past experiences.

These are the ones who press on, as one scheme folds or fails to deliver, they take a fresh dose oh hype, part with another twenty five pounds and indulge in yet another brief bout of frantic enthusiasm. Peter Head coined a tern for these people who get hooked on MLM in this way and described them as 'MLM junkies'.

Perhaps because most people in the mail order circle lack business training or experience, they can be almost unbelievably naive. So the promise that one is going to make a fortune for a mere outlay of twenty five pounds in often believed and disastrous experiences with past MLM schemes do not seem to deter people from having a fresh fling and parting with yet more money.

My main criticism of MLM has always been that many companies in this field go well over the top with absurd claims and nonsensical hype. Only the other day I was talking to a man who usually has a realistic down-to-earth attitude towards his operations within the mail order circle. He published a very good magazine and obviously has some talent in operating his small scale business. Yet he told me that the man on the level above him in a particular MLM scheme had made a huge sum of money last month and expected to make even more in the coming month. The sum of money mentioned, if multiplied by twelve, would give a yearly income higher than that enjoyed by the chairman of I.C.I. and most business tycoons. If such incomes were being earned it would be headline news, especially in the financial press. Such claims about earnings are so totally absurd that one would imagine that they could not be taken seriously. Yet here was a man who obviously believed this nonsense.

One can generally form some opinion on an MLM scheme by the degree of emphasis on recruiting. The better schemes are interested in promoting the actual product. The less successful schemes place a greater emphasis on recruiting further participants. What about the vast majority of MLM schemes in this country which have disappointed their participants? Many people have joined MLM schemes with high hopes, who have believed the huge income hype and who thought they were going to make very high incomes and yet were bitterly disappointed as one company after another subsided into obscurity or totally disappeared.

It would seem that as each new MLM scheme came into being it stirred up a large section of the home-based mail order circle into a bout of frenzied activity. The Post Office was the main beneficiary as mail flew in all directions. Unfortunately, all too often, none of the participants had anything to show for their efforts. The carefully worked out sum in the literature, which shows as the level multiplied the participants would join the ranks of the extremely wealthy, well it didn't work. But as each company vanished from the scene it was quickly replaced by another. The pattern seems to be that in the first flush of enthusiasm created for the launch, there is a first wave of enthusiasts who have become participants but after that there is usually a gradual decline.

But remember I said this happens in most cases, not all. A few MLM companies which were launched stayed afloat and kept going and, as far as I know, are ticking along quite nicely. So how did they survive when the majority failed? Amongst these few I actually found participants who made money. How did these companies differ from the majority? There are only three or four I know about and they have certain things in common, I will list them.

Firstly, in their literature they concentrated as much, or more, on the quality of their products and competitive pricing, as on the money which could be earned by recruiting others into the scheme.

Secondly, they encouraged their participants to work on a local basis, that is selling to the local community rather than trying to recruit people or sell through the mail.

Thirdly, they provided a first class back-up service for their participants. Gave prompt replies to incoming mail and gave continual support and encouragement to active participants.

Fourthly, they strictly adhere to D.T.I. regulations and guidelines.

These three or four companies which stand head and shoulders above the rest will, I think, still be around four or five years from now, which in itself is unusual as most MLM ventures are short-lived. These few successful MLM companies broke away in their recruitment and selling from the usual small circle of MLM literature recipients and reached the general public. Their products are good and they are doing well. But.......I just happen to think they would have done even better if they had not used the multi-level marketing method.

There are some intrepid souls in the home-based mail order who actually launch their own MLM scheme. These are often very small scale and are usually known as 'paper' MLMs, because the product on offer is usually some sort of modest publication. It is amongst these MLM minnows that the new regulations are most likely to be broken. The penalties or doing this are severe and I would strongly urge anyone running a small MLM scheme or anyone who contemplates starting such a scheme, to make absolutely sure they are fully aware of the new regulations. Participants and prospective participants in MLM schemes should also carefully study the new regulations and ensure that the MLM scheme they have joined, or are about to join, fully complies with all legal requirements.

One interesting point about multi-level marketing. Both the American and British governments continue to show a hostile attitude towards it. This is reflected in the drafting of the new regulations. Representations were made to the D.T.I. by a number of leading MLM companies who objected to MLM being described as pyramid selling. However, the Department of Trade & Industry replied to three representations in their final report as follows, I quote:

"On the matter of title, the D.T.I. state that there was a considerable body of opinion in favour of getting away from the term 'pyramid selling' which many regard as outdated, in favour of 'multi-level marketing' or 'network marketing'. But the D.T.I. have been advised that such changes are unlikely to be accepted to the House of Commons Joint Committee on Statutory Instruments. And that since the title of Part XI of the Fair Trading Act under which the regulations would be made is 'Pyramid Selling and Similar Trading Schemes', the term 'pyramid selling' gives the best indication what the regulations are about."

So, the new regulations were named as - 'Pyramid Selling Regulations 1989'. They came into force on 1st March 1990.

Reports from those who took part in our survey show that a very high proportion of people in home-based mail order have participated in at least one MLM scheme. Some have participated in several. Reactions to their experiences were mixed, but would seem to confirm my opinion that many of the blunders made by home-based mail order dealers have been in the field o multi-level marketing.

As over two thirds of participants said they had not even made a profit in MLM, one needs to examine why this was so. Almost none of these losers attempted to operate on a local basis i.e. selling the product to relatives, friends and neighbours in their own immediate locality. Instead, these losers attempted to operate through the mail, mailing out MLM literature to a mailing list of other people in mail order i.e. mail order dealers/business opportunity seekers. Almost all of those who lost money operated in this way. Costs when working this way included the twenty five pounds joining fee, cost of the mailing lists, plus postage. The very few who did not lose money only made a tiny profit. None made anything like the money they expected to make.

Those who had a degree of success to report were all people who operated locally and who concentrated on selling instead of trying to recruit other participants. They all seem to have joined a very small group of MLM companies, no more than four, who have certain things in common. These four concentrated on selling their products rather than recruiting. They all had good products sold at reasonable prices. They encouraged their participants to get out and sell locally and they gave them a good back-up service.

Most of the good earners with these better-than-average MLM companies were women. Hardly surprising as two of the companies sell perfume and another sells special diets for slimmers. One of the more successful 'genuine' earners was a participant in a small country town. A single parent with a young child, she worked hard to build up a round of regular customers and supplement the modest income she received from maintenance. She earned over £4,000 during a ten month period. This was the highest amount earned by an MLM participant in the survey, but three others, all women, earned over £3,000 during the same period. All these figures were genuine earnings checked by R.I.S., unlike some of the earnings claimed in the past in some MLM literature.

It is necessary to point out that these were the highest earnings within an MLM scheme and none of these women operated via mail order. From the six hundred people involved in the survey the highest earnings by anyone not working on a local basis and relying purely on operating through the mail, the highest MLM earner showed a clear profit of £223 over a full year. This is a great deal less than those leading mail order dealers earned over a year who did not operate on an MLM basis. Four of them made a profit which could be considered unusually high by home-based mail order standards. But these four were operating on a full time basis and that is very rare indeed in home-based mail order.

So what conclusions can we reach regarding multi-level marketing based on the survey?

1. The survey clearly shows that MLM is not something suitable for operating through mail order.

2. The only people who have done well as MLM participants are those who concentrated on selling the product in their own locality.

3. Only a handful of MLM companies have proved profitable for the majority of their participants.

4. The top earners in home-based mail order did not make their money through multi-level marketing.

5. So called 'paper' MLMs proved extremely disappointing. So did a number of schemes to promote water filtration systems, perhaps due to adverse publicity on television and in the national press.

6. Home-based mail order dealers who sought to recruit people into MLM schemes by direct mail shots were invariably disappointed by the poor response.

7. None of the handful of high earners in mail order were involved in MLM.

MAIL ORDER SCAMS

Now to move on and deal with a number of other areas in home-based mail order which produced a high casualty rate and considerable financial loss. It will show that we keep coming back to the gullibility factor which, alas, is so prominent in Blunderland i.e. home-based mail order. The racket which has claimed most victims and made most money for the shysters, without doubt, was the 'envelope addressing' scam. Our survey shows that a considerable proportion, one hundred and eighty eight out of the six hundred taking part, have been caught by this nasty scam.

I have to be highly critical of the publishers of some mail order magazines and ad-sheets who have allowed advertisements for this racket to appear in their publications. This is one of the reasons why I would like to see a much more responsible attitude by some publishers. The recent establishment of an organisation called 'The Mail Order Publishers' Association' (M.O.P.A.) should go some way to curbing the worst of these racketeering advertisements. Publishers who are genuinely concerned about the dubious standards of mail order advertisements are getting together to devise a code of advertising practice in mail order advertising and hope to possibly eliminate the worst offenders.

The 'envelope addressing' scam is particularly nasty in that it often preys on those who can least afford it and on those who are especially gullible. The latter would explain why so many of those in Blunderland have been caught by it. Amazingly, in spite of prison sentences of up to four and a half years, and swingeing fines of up to nine thousand pounds, there are still some people promoting this scheme, in particular one arch rogue in the Isle of Man who seems to enjoy some magical immunity from prosecution.

Advertisements for this racket have not only appeared in mail order magazines and ad-sheets, but also in direct mail literature, local newspapers and (a favourite method) on postcard advertisements in shop windows. The advertisement usually reads something like - 'Earn £££s per week. Work from home. £10 per 100 addressing envelopes.' The wording can vary but it is always along these lines. Almost always the advertisement requires you to send a stamped addressed envelope to receive details.

The reply you receive will usually be on a single sheet of paper with an offer than APPEARS to be a straightforward job writing addresses on blank envelopes and being paid thirty pence for each, sometimes only twenty five pence per envelope offered. But you are asked to pay a registration fee. This can vary between ten pounds and twenty five pounds, but fifteen pounds is the norm. So you send off your fifteen pounds and eventually you receive a very unpleasant surprise in the form of the starter pack for commencing work. From this it turns out that the envelopes for which you receive thirty pence each are not blank envelopes for you to address. They are stamped addressed envelopes sent to you after you have put out advertisements just like the one you responded to. So the whole racket operates on a chain system. You get caught by responding to that advertisement and the only way you can recoup your fifteen pounds is by catching other people with the same advertisement. Then they in their turn will have to do the same. In practice, most people just bin the starter pack and accept the loss of their fifteen pounds. A few will try to recover their fifteen pounds as most of these offers give a money back guarantee in their literature. In the survey, not one person had been successful in obtaining a refund.

What is so nasty about this scam is that the advertisement does appear, at first glance, to be an offer of paid homework. People desperate to supplement their income - pensioners, one parent families, the disabled and other under-privileged groups - are likely to become victims. As this racket has also been widely advertised in Blunderland (the mail order circle) it has found many victims amongst home-based mail order dealers. The envelope addressing racket is only one of numerous scams which have circulated within the field of home-based mail order. But now we are beginning to see some of the more persistent promoters of this scam attempting to get around the regulations. They do this by dressing up the scam to look more like a genuine homework offer, by including the selling of some 'product' such as a manual or holiday guide, or whatever. I can assure such promoters that this will not protect them from prosecution.

Perhaps the racket which has enjoyed the widest success in mail order is the chain letter, which comes in a variety of forms. Here the survey revealed that a staggering 82% had been caught by one or more chain letter schemes. A few years ago it was the 'Nelson Robards of Boston' chain letter that was all the rage. This has, to a large extent, been replaced by the 'Edward L. Green' chain letter which, alas, is persistent and will probably be catching out the great-grandchildren of present day victims. Both these chain letters were around in the early 1960s and both are imports from America.

The origins of both, and many other scams, are fully exposed in the best selling publication 'Recommended & Approved'. The Edward L. Green made famous by the chain letter never existed. It was the brainchild of a small scale mail order dealer named Minter. Those testimonials were also all his own work. He never made very much money himself from the scam and those who took it up and promoted it on both sides of the Atlantic also did not make much money out of it.

As for those who fell or the phoney literature, well the survey revealed that no less that three hundred and seventy admitted having tried the Edward L. Green chain letter at one time or another. All had been taken in by the clap-trap literature, but only three would admit to having actually promoted it (a figure I view with some suspicion). However, all three hundred and seventy did admit that they have not made money from it. In theory it should work, so why has it been such a flop?

Let us assume that the literature is correct when it claims that the number of people responding by the time you reach the fourth stage, who are then in the first stage, will be ten thousand. What the literature does not say is that on the basis of its own calculations, by the time people who at this point were on the fourth stage have moved up to the first stage, the number of people responding will number one and a half thousand billion. On the basis of Edward's own calculations that is an accurate figure.

Needless to say, that does not happen. This chain letter is now so well known and discredited that the response is very low - one promoter put it at 0.005%. Another had two replies to his first thousand mailing and none at all to his second thousand. That is the problem, the chain always has too many broken links.

Another daft import from the States is the idiotic 'Money Network' scam, and that also seems to have caught a lot of our gallant six hundred. It saddened me to find out from the survey how many people amongst the six hundred have been taken in by this shabby scam. It seems almost unbelievable to me that scheme which says you will make one hundred thousand pounds for a mere outlay of ten pounds will be seriously considered by anyone, especially as the name of the promoter is never given, only the name of a fictitious lawyer named Brown and the address of the sucker, sorry I mean agent, who has already parted with his ten pounds and is desperately hoping that you will send him your ten pounds.

How anyone in their right mind can believe that garbage text in Money Network is difficult t understand. But then I have been told that there are New Yorkers who hang around the Brooklyn Bridge, waiting for some gullible tourist to come along to whom they can sell the bridge. It is an incredible fact which would be confirmed by the New York Police, that the Brooklyn Bridge has been sold, complete with an official looking Deed of Ownership, not once, but literally scores of times.

That great showman, Barnum, is quoted as saying "There is one born every minute". Money Network helps to prove he was right. This scam is confined almost entirely to operating within the home-based mail order circle. This also applies to many other scams which circulate within that circle. I hate to beat a word to death, but that word gullible keeps springing to mind. On the other hand, gullible people are usually nice people. They have certain ethical standards of their own and, alas, expect others to keep to a similar level of honesty. Rogues, crooks and nasty people generally are seldom gullible. It would be a bleak, cold world if it was full of wary, over-suspicious, hard-eyed people.

That having been said, there is an obvious need for a service to provide protection for people in home-based mail order, or if you like, the Business Opportunity Seeker. You must remember that the opportunity seeker, those looking for a genuine opportunity, are targets for every shyster - and there are plenty - who prey on the unwary.

Now I want to tell you a fairy story. Unlike other fairy stories, this one is true because it is based on a composite picture of the experiences most common to those who took part in the survey. But like many fairy stories it has a sad beginning and a happy ending. Right, are you sitting comfortably? Then let us begin.

ALICE IN BLUNDERLAND

Once upon a time there was a girl named Alice. Well, she wasn't a girl really as she had already passed her fortieth birthday. It would be wrong to say that Alice lived entirely alone as she shared her neat little flat with a beautiful pussy cat named Wally. Alice had a steady job as a get-lost clerk at the local D.H.S.S. office. It wasn't a very demanding job as all she had to do was say "Get Lost" to each unfortunate applicant who came to her desk. The hours were fairly short but the salary wasn't very good. So Alice often thought about ways and means to supplement her income. She had no extravagant tastes and over the years she had saved up several hundred pounds.

One day Alice was sitting in her flat, deep in thought and cat muck. Suddenly there was a blinding flash of light and a beautiful fairy appeared before her. The fairy spoke in a silvery, tinkling voice. "My name is Fairy Foulup and I come from Blunderland. You may have one wish and it will be granted." Alice did not hesitate. "I want to be rich," she said, "not just ordinary rich, but filthy rich with oodles and oodles of lovely money." Fairy Foulup smiled and waved her wand as she chanted the magic words:

Money-making plans for all go-getters,
MLM schemes and great chain letters,
Manuals and guides by the score,
Never again will you be poor.

And lo, a veritable snowstorm of paper began to float down from the ceiling. Fairy Foulup vanished but Alice didn't even notice. She was too busy sorting through all the exciting offers which now lay strewn all over the floor. As she read through the circulars tears came to her eyes because she began to realise that there must be an awful of really kind people out there who were desperately anxious to make her rich.

Alice soon became convinced she was going to become very rich. The first thing she did was to 'phone the D.H.S.S. to tell them she was quitting her job as a get-lost clerk. Then she reached for her cheque book and engaged in a bout of frenzied activity. Alice wrote out cheque after cheque. She wrote lots of cheques for twenty five pounds each and wrote to join every MLM scheme she could find. The circular from 'Money Network' made Alice so excited by the thought of receiving one hundred thousand pounds for a mere ten pounds that her hand shook as she made out the cheque.

Alice bought mailing lists and spent a lot of money on postage. Her nest egg of savings was melting fast. At the end of the week she was getting really worried as the promised money just wasn't coming in. At the end of the month Alice was beginning to experience that horrible sinking feeling that comes to so many who plunge into mail order. She also began to understand why Fairy Foulup was so named.

Alice decided to go to the D.H.S.S. office to try to get her old job back. She walked up to the manager's desk but before she could speak, the manager looked up and uttered the words "get lost". Alice went home and started again, only this time she was determined to do everything properly. She bought a publication called 'Mail Order Blunders and How to Avoid Them'. On reading this she began to understand why it was necessary to have professional help and advice. So she sought professional help and from then on began to do things properly. She no longer lost money on no-hope business propositions. She no longer got caught by the scams, cons and rackets. She actually began to show a clear profit and ever increasing prosperity. So Alice and her pussy cat lived happily ever after.

PART THREE

The final section of this publication is perhaps the most important of all. It is list of all the golden rules to follow in mail order. All these do's and don'ts are based on the experiences of those involved in the survey. Not one of these experiences is an isolated example. This proves something I touched upon earlier, that the same mistakes are made over and over again.

The purpose of this publication is to stop those mistakes being made. So it is good news for those trying to make a go of things in home-based mail order and bad news for the shysters who prey on them. Read these golden rules, not once but several times, and so commit them to memory. If you follow them in your business activities you should avoid all the worst blunders.

So let us start with the most frequent blunder made by beginners. When you read an advertisement in a mail order magazine or ad-sheet, or receive a circular through the post, never, never accept what it says at face value. Nine out of ten such advertisements cannot be trusted. Why do the shysters do so well in the field of home-based mail order? One reason is that few publishers of mail order magazines attempt to give proper protection to their readers. Greed gets the better part of them, so it is a paid advertisement they will accept it, even if they suspect (or even know) it is dubious.

Fortunately, not all magazine publishers are unethical. Home Business Quarterly, The Profiteer and Home Income News are three magazines which try very hard to keep to a high ethical standard. They cannot guarantee to spot every scam as some shysters are very cunning, but they will weed out most of them. They will also jointly blacklist the worst crooks and expose their activities.

But it must be stressed that these ethical magazine publishers who scrutinise every advertisement they receive and reject the dubious advertisement, even though it might mean a loss of revenue, form a very small minority. Most magazine publishers are not so ethical. They think it clears them of all responsibility if they carry a paragraph with advertising details. It usually reads something like this:

"The publishers are not responsible for the dealings of any advertisers. All advertisements are accepted by us in good faith and must be legal, decent and honest. No adult or similar adverts will be accepted and we reserve the right to reject advertisements of a suspect nature."

This sort of notice in a mail order magazine is just a let-out and means nothing. One recent issue of a mail order magazine carried this type of notice and in the very same issue carried an advert for the 'Money Network' racket. The wording of the advert was so blatant that I will quote it:

"STOP! LOOK NO FURTHER! Financial freedom can be yours with Money Network. What can you do with £100,000? This is not a dream. Membership £10 or 9 x 4 S.A.E.....Membership Limited."

Home Business Quarterly, The Profiteer and Home Income News would boot out that advertisement without a second glance. But alas, if it was a paid advertisement most other mail order publishers would accpet it without scruples. So do not expect protection from the majority of mail order magazine publishers against con advertisements. Con advertisements are usually those placed by part time dealers (the vast majority), making absurd claims about earnings which are always far more than that advertiser is ever likely to make.

Having said that nine out of ten advertisements are of the type to be voided, it is necessary to add that such dubious advertisement need to be divided into two distinct and separate groups. The first group includes all advertisements which have been inserted with the deliberate intention of conning those who respond. These are advertisements which are cunningly worded traps to catch victims in some scam.

The other group consist of advertisers who are not intentional crooks. Naive?......Yes. Crooks?......No. They are even more numerous than the first group and cause just as much damage. Often they unwittingly act as agents for some scam, totally unaware that what they are doing is wrong. Such people will promote things like chain letters, or 'Money Network'. Often this will have their name and address on the bottom of some scam circular as the agent. They are often horrified and contrite when told they are helping to promote a scam, but that does not make them any less a danger to beginners in home-based mail order.

So if the majority of mail order advertisements are suspect, how do you know which to avoid? The first ones you eliminate from any consideration are those which make absurd claims about how much you can make. I don't mean the really daft and obvious ones, like 'Money Network' with its one hundred thousand pounds, or the 'Easy Money Business Formula' with its six hundred pounds a week, but the less obvious ones. These often seem to offer a proposition which is plausible and attractive.

Advertising mail order magazines is largely uncontrolled and advertisers can get away with the most outrageous claims and statements. Please remember that 90% of those advertisers making such absurd promised about the money you will make are very probably no better off financially than you are. The vast majority are part time operators and they will never be anything else. So now you can see why I say the first golden rule in home-based mail order is that you take all these claims with a large pinch of salt.

Before finishing with this subject of intentional and unintentional conning by mail order advertisers, I would like to give some examples of 'con' advertisements. All these are actual advertisements I have taken from current issues of mail order magazines and ad-sheets. All of them would be flatly rejected by truly ethical publishers who are concerned to protect their readers. Most would be rejected on the grounds that the claims made were totally false and make promised which could never be kept. The ethical publisher would ask such advertisers to prove the claims they make. The publisher of Profiteer did in the case of twenty two would-be advertisers. Not one dared to reply.

In each advertisement I give I will add my own brief comment. As I have no doubt that this publication will be read by many people active in home-based mail order, it is possible that some people will recognise their own advertisement among the examples I give so..........

A CHALLENGE: I invite anyone who sees their own advertisement here to come forward and dispute my opinion. Most of the examples I give were responded to by people taking part in the survey, so I know just what resulted from those responses. Take up my challenge and we will get a top class, professional business consultant to thoroughly investigate both you and your claims. Any takers?

So here we go with the sort of fantasy advertisements that are common in the dream world of home-based mail order.

"Insert a postcard advertisement in your local shop window. And just wait by your letterbox as the money comes pouring in S.A.E. for details."
COMMENT: Just another dodge to get you to take part in the old envelope addressing racket.

"Enjoy the benefits of herbal health nutrition yourself and turn an outlay of 66p per day into a regular five figure monthly income. No selling necessary. Recruit two people - retire in two to three years. An S.A.E. secures full details.
COMMENT: A five figure income monthly? "Good grief" I hear you say, that's a minimum of ten thousand pounds per month, one hundred and twenty thousand pounds a year. So this advertiser must already be on the super-wealthy level. Is he already on the verge of luxury retirement? If he can offer one hundred and twenty thousand pounds a year to others he must be fantastically rich......Surprise, surprise. He is still just a small time mail order dealer operating part time and pedalling a well known MLM scheme.

I must mention the heading on a full page advertisement for an MLM scheme. It reads "Losers Hesitate - Winners Act Now."
COMMENT: Wrong. Exactly the opposite is true. Losers plunge headlong into new schemes without properly checking them out. Winners are more cautious and will probably use professional help to carefully check out the proposition before parting with any money. Apart from the daft headline, this particular scheme is more restrained than most in its advertising text.

"MLM MILLIONS. Join the top MLM kings in the UK. I and six others led the way to untold wealth. We will show you how to join the winners in MLM. S.A.E. for details."
COMMENT: Several of the people in our survey had sent off for details of this one. It turned out to be a special discount offer to join five different MLM schemes. A lady who took part in the survey actually lives two streets away from the advertiser. She told us he is the local milkman. What I would like to know is this, why is an MLM king who has led the way to untold wealth running around on cold winter mornings delivering milk?

"HOMEWORK FOR PROFIT. Work in the comfort of your own home at hours to suit yourself. Earn up to £250 per week. Everything you need provided. Starter kit and easy to understand instructions £10.00.
COMMENT: A large number of people involved in our survey admitted to having been caught by so-called homework schemes. This particular one was the usual con. The 'starter pack' merely consisted of several circulars. You were required to photocopy them at your own expenses, buy a mailing list at your own expense and mail out copies of the circulars at your own expense. You were promised a commission on all resultant orders. But as the orders would not come to you, it is a matter of trusting the firm to tell you of any orders they receive as a result of your mailings. None of the people in our survey had bothered to send out the circulars, they said only over-priced junk was being offered, and none were able to obtain a refund of their ten pounds. Steer clear of dubious homework schemes. The magazine Homeworker's Post does a good job in exposing dodgy homework schemes.

The foregoing gives some idea of the general standard of mail order advertising, but not all mail order advertisements are of this nature. There are genuine advertisements and there are mail order dealers who are honest and give value for money. The problem is to sort out the minority of genuine advertisements from the dubious majority. One guideline is to ignore all advertisements which make specific claims about the amount of money you will make. I have yet to find any such claim which is accurate in the forecast of potential earnings and most are given to wild exaggeration.

Another type of advertisement to be ignored is the 'mystery advertisement', so called because they never tell you what exactly is being offered. Most mystery advertisements are in the form of circulars which come as unsolicited mail. The mystery advert will tell you all about what a marvellous offer this is. It will go into great detail about the amounts of money which can be made and it will often quote success stories about other people who have taken up the offer. But they don't ever say exactly what the offer is. They usually excuse this by saying the information they offer is so valuable that it has to be kept secret.

They will reveal this secret (usually in the form of some manual) which will make you enormously wealthy, only when you send the money. So you part with money for a grossly overpriced and tatty manual, only to find it to be the usual disappointing rubbish. One of these mystery manuals contains a lot of stuff about what people have earned in the past doing this particular thing. But all it boiled down to is the suggestion that you go around with a ladder clearing the guttering on people's houses. Hardly worth £17.50 is it? So avoid all mystery advertisements.

Now we come to another common blunder made by beginners in mail order. During the initial stages of starting up their business, they are inclined to spend too much money. Even later on, many are not careful about business expenses and are inclined to spend more than can be justified by the return. Turnover means nothing. I know a business which has a turnover in excess of £30,000, yet the net profit is comparatively tiny. The whole purpose of going into business, full time or part time, is to make a profit. Ask the average home-based mail order dealer what his nett profit was on the previous year and he is likely to go a deep shade of red and mumble something to the effect that the business has not really picked up yet.

What is the point of having fifty pounds coming in during a week I your outgoing expenses nearly match that amount? Some shame faced dealers have told me that experience has to be paid for. Nonsense, not any more is that the case. I will give you precise and detailed instructions on how to avoid painful (and costly) experiences in mail order. But to get back to this matter of profit and loss. From now on you must make Ebenezer Scrooge look like a spendthrift.

Newcomers to mail order often buy items that are not really necessary. Such items should not be considered until profits justify such a purchase, and even then may not be essential. Such things as computers, fax, telephone answering machines etc. One of the surprises of the survey was the large number of people in home-based mail order who possessed one or more of these items. It would seem that some beginners are more concerned with fulfilling their own image as a person in business.

One man had converted a whole room in his modest sized house into an office, complete with desk, filing cabinet, typewriter, etc., before he had made a single penny in profit. This must have caused some inconvenience to the rest of his fairly large family and it was not necessary. He must have spent a lot of money which did nothing except fill the debit side of the ledger and give him a feeling of self-importance.

Let us take telephone answering machines. I just cannot see why such a machine is a priority item for a part time, home-based mail order dealer. As I said earlier, few of these people ever give a 'phone number on their letterheads. Yet the survey showed that over fifty had telephone answering machines. Why? A status symbol? A hope that it will be justified in the future? A telephone answering machine has distinct disadvantages. If people ring and leave a message, they also usually leave a request that you 'phone them back. Now if someone 'phones you that is fine, they are paying for the call. But if you have to 'phone back, then you are paying and that is not good. As someone who spends a lot of time preaching to people that they must keep down their overheads, I'm very much against over use of the telephone, never mind the further cost of having to reply to messages left on an answering machine.

I was surprised when the survey revealed that many people in mail order had fairly high telephone bills. Bills of over two hundred pounds were not uncommon. Now I know that some people in mail order love blathering away on the 'phone for hours at a time. I know because I have often been on the receiving end. Often these calls could have been over in three minutes with everything important duly said. But no, they drone on about the weather, gossip about others in mail order, plans for the future, etc. Don't think I am anti-social, I like these chats and the people who 'phone me are seldom boring. But as the minutes tick by, I can't help thinking of the charges mounting up.

Look upon your telephone as being there primarily to receive calls, not to make them. Never make a call unless it is absolutely necessary. Very few 'phone calls cost 17p or less, but that is all a letter costs. Have a little card stuck on the front you your 'phone and on it the words 'Stop! Won't a letter do instead? Try and train yourself to use the 'phone as little as possible. If you do have to make a call, especially if it is a long distance call, stick a clock or a watch where you can see it as you lift the receiver. It will help you make you aware of how much you are spending on that call.

A lot of people in mail order would seem to have desktop computers or word processors. In some cases I can understand the reason for having them, those involved in self-publishing for instance. But we found many cases of mail order dealers who did not need a computer or word processor, an ordinary typewriter would have been sufficient. Again it seems that in some cases the computer was an unnecessary status symbol.

Word processors can serve a useful purpose for some in mail order, but computers, while useful for some of the larger MLM companies, serve little purpose in the home of the average home-based mail order dealer. I think it is significant that the handful of people who earn a huge income working from home do not use computers. One of these, a prolific writer and business consultant, has a low opinion of computers and would not have one as a gift. He records everything onto audio tape ready for his secretary to type. Being extremely elderly, he belongs to generation that has a rather contemptuous attitude towards computers.

Another of the very few fat cats has an old manual typewriter and no fancy office aids of any kind. Yet another of them, who has a very high turnover, has a good manual system (Kalamazoo I believe) and he won't consider using computers. Who are these fat cats? The people who make astonishingly high incomes from working at home? Some of them are incredibly wealthy, but again I would stress they are very few in number.

But to get back to the subject of keeping down your overheads and enlarging the margin of your profits. One area in which we found people made unnecessary losses was that of direct mailing. I mentioned earlier that one should never undertake a mailshot without first running a 'pilot' shot. But there is something I would like to add to that. Some people do observe that rule but start off buying a mailing list of (usually) a thousand names and addresses. They use one hundred for their pilot shot and if that flops they are stuck with the remaining nine hundred. Perhaps the mailing list is no good and it is boubtful if they will get a refund on the nine hundred names still unused. So here is another fule. If you go to a new source for a mailing list, one you have never used before, NEVER buy more than two hundred names and addresses the first time. I gave reasons earlier why mailing lists which circulate in the mail order circle are often very poor. Don't take chances with a new source. Take the smallest quantity they will sell you, a hundred for preference, and certainly not more than two hundred. If the small list is any good at all, then stick with that mailing list broker as good ones are rare.

The survey also revealed that several people had burnt their fingers in publishing a mail order magazine. The inexperienced dealer can come unstuck when venturing into this field. Beginners in mail order are advised to leave this activity alone, at least until some experience of home-based mail order has been gained. It may come as a surprise to you when I tell you that of the twenty two mail order magazines which were in existence in 1985, not one survives today. In fact, the oldest established mail order magazine in the UK is Mercury which started in 1986.

So you see, mail order magazines do not usually have a long life, at least not in recent times. The British mail order magazine which lasted the longest was also the very first. Postal Times was started in 1918 and laster until 1966. It ran for nearly fifty years and only ceased on the death of its publisher, Fred Easton. No other mail order magazine in this country has ever come anywhere near that record. The average life of a mail order magazine is less than two years. Why is this so? I will explain and perhaps it might make those who contemplate starting a magazine think twice, once I have explained the snags.

Most mail order magazines fail because they all into a Catch 22 situation. The economics of magazine publishing are such that no mail order magazine can survive for a long period without advertising revenue. Trying to recover sosts through the cover price, or co-publishing, or subscriptions always fails. It is because mail order magazines have a poor survival rate and because many fold after a very short period of time that people are extremely reluctant to take out a years subscription. Whereas co-publishing deals were offered by almost all mail order magazines a few years ago, it is now confined to a couple today.

The lack of enthusiasm for co-publishing can perhaps be explained by the fact that the few co-publishing deals on offer today are far less generous than those offered in the past. The close links and interchange which existed between British and American mail order magazines twenty or thirty years ago seems to have largely disappeared. If any mail order magazine publisher with a circulation above one thousand is being completely honest, he (or she) will admit only a small percentage of copies are actually paid for. Most of these magazines are given away free of charge.

So the mail order magazine publisher has only two real sources of revenue. One is that the magazine can act as a vehicle to promote his own goods and services, and indeed many such publications do carry a high proportion of the publisher's own advertisements. The other, and most important, source of revenue is from paid advertising. In some of these mgazines, very often an advertisement is not paid for in cash and is there on some exchange deal or 'favour for favour' basis. So what genuine revenue from paid advertising does trickle in is vital. In many cases the paid advertising does not cover all the costs, so the publisher has to subsidise the magazine out of his own pocket. In such cases the publisher, sooner or later (usually sooner) will decide to cease publication. This explains why so many of these magazines have a very short life.

The Catch 22 situation for mail order magazine publishers is this. Anyone who pays to have their advertisement in one of these magazines expects to get a return on his investment, i.e. he expects to get a response to his advertisement. He will want to know what this response is and will key his advertisement (or at least, he should do). If he gets a poor response to his advertisement he will not pay for further advertisements and, just as damaging, he will probably inform his friends in mail order about the disappointing response.

To ensure that advertisers get a good response the publisher has to hae a good circulation. Good by mail order standards that is. What is a good circulation by mail order standards? Here I must mention an important point. Outside home-based mail order, in the real world of magazine and newspaper publishing, it is possible to check on the true circulation figure. Most such publications are checked by A.B.C. (Audit Bureau of Circulation), so we know whatever figure a publication gives as its true circulation is accurate.

This does not apply in the field of home-based mail order, where no such checks are made. So the publisher of a mail order magazine or ad-sheet can proclaim a circulation figure which can be as high as his imagination wants it to be. That is why, in the past, we hae had some daft claims about circulation figures. Downright lies by some magazine publishers. This is done in the hope of attracting more one-off paid advertisers. One-off because the advertisers are unlikely to advertise again. But these lies have another harmful effect in that they encourage others in the mail order circle (those who believe the figures) to think 'there's gold in them there hills', i.e. big profits in magazine publishing. So we get another mail order blunder in that people go into publishing their own mail order magazine, almost always with very disappointing results.

Our survey revealed three people who are currently publishing mail order magazines and ten publishing ad-sheets. A further forty six had published a mail order magazine or ad-sheet in the past. All foty six gave the same reason why they had dropped out of publishing. They had not found it to be profitable. But let us come back to this matter of true circulation figures for this type of publication. I have seen totally absurd circulation figures given by some mail order magazines. One proclaimed in its advertising that its circulation was over sixty thousand. I am now going to show you exactly why such claims are sheer fantasy and just could not be true.

It is estimated that three out of every five people in one-based mail order are members of M.O.D.S. (Mail Order Dealers' Syndicate). Having recently inspected their full membership list I have no reason to doubt this. In 1987 M.O.D.S. decided to try and find out exactly how many people were involved in home-based mail order in the UK. As a base to start this project they have their own membership figure. They then started to search for people who were not members of the M.O.D.S. They carefully checked mailing lists. They scrutinised every mail order magazine and ad-sheet for names and addresses of non-members. They obtained lists of buyers and enquirers from manual and guide publishers and searched these for non-members. Finally they came up with a total of people operating in mail order who were not members and added this to this own membership figure.

The final total figure of people in home-based mail order in the UK, including non-active people who bought items but did not actively participate, was just over six thousand. Allowing for the fact that there might be some names they had missed, though they doubted this, the very highest estimate would be less than seven thousand. M.O.D.S. did make the point that although there is a fairly high casualty rate, i.e. people dropping out of home-based mail order, this is compensated by beginners who are coming into mail order. The entire six thousand or so form what is known as the 'mail order circle'.

As the circulation of mail order magazines and ad-sheets is confined almost entirely to the mail order circle, you can see why some ot these claims about circulation are so absurd. True circulation is usually between five hundred and one thousand, though sometimes a published will push up to two thousand copies, at least temporarily, in an effort to give advertisers a better response. So if you get around twenty replies to a single advertisement in a mail order magazine, then that publisher is trying hard and is probably up in the two thousand range. Stick with him (or her) as twenty replies, especially if these are firm orders, is very good indeed by mail order standards.

The figures I have given also help to explain why paper MLMs, i.e. those who recruit and sell via the mail, almost always fail to take off and usually fold after a short time. Using their own multiplication tables (matrix tables) which they are fond of using in their advertising, it can clearly be seen that they will quickly reach saturation point long before reacing the final levels in their tables. Like mail order magazines, paper MLMs are confined almost exclusively to the mail order circle.

The people generally defined as 'Business Opportunity Seekers' for the purpose of selling mailing lists under this heading are not business opportunity seekers in any sense that the public would recognise. They are not people with a few thousands to invest in some franchise deal. Nor are they people prepared to put a good sized sum of money into an existing business, or buy a partnership in an existing business - they are none of these. So our definition of a 'Business Opportunity Seeker' is usually a comparatively poor person without capital.

Such people are looking for ways of making money without capital. Thus they often enter what Dudley Perkins described as "the poor man's gateway to business activity", multi-level marketing, because the entry fee is usually a mere twenty-five pounds. Note that Perkins said business activity, not business prosperity. Such people form likely prospects for manuals and guides and are often steady buyers of such material.

Now that key price of advice I promised to ensure you cut down on the type of blunders which will keep you poor. Firstly, anyone in mail order should have a copy of a publication called 'Recommended & Approved', published by M.O.D.S. and a total exposure of all that is good (and bad) in mail order. Details at the back of this publication. Secondly, obtain professional help for your enterprise. The few fat cats in mail order are either professionals themselves or had professional help in all their business activities. There are professional proof readers, copywriters, ghost writers,marketing experts, etc. There are professional business consultants who will select a business most suitable to you and who will hold your hand through the first year or two. All these have charges far less than people usually expect.

I won't end up by wishing good luck to readers of this publication. Luck does not come into it. A cautious, slightly cynical approach to business is what you need.

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