Internet sharks taking bites out of kiwis

James, I completely agree that if the package was promoted as a complete business opportunity, it's appalling that it lacked any marketing. No matter which kind of dollars are used, 4k is a rip-off for what you described. If there is some kind of consumer advocacy department there, comparable to the US Federal Trade Commission, I wonder if your mate could get help getting his money back and these clowns shut down.

Edited to remove off-topic content

Regards,
Allen

Hi James,

Sad to say, this happens... all... the... time...

This is a classic case of someone being seduced into the hope of riches and, without knowing more, there appears to be fault on both sides.

The factory worker probably let hope, fear, greed, etc blind him to the realities of operating an online business. (It's one thing to establish an online storefront and supplier relationships... it's another to get traffic and sales).

And those who sold the franchise / business opportunity probably exploited the guy's ignorance and emotional drivers to the hilt. ("With a modest investment of just $4k you could have an online store generating thousands of dollars in income each week!")

Whether there was any misleading and deceptive conduct is unclear from your description but, if so, that is another story, and something that could be reported to the relevant NZ authorities.

Hi James. Timely post. I have an elderly friend (lady of 80) who wanted to get online. I usually try to help folks like this so they don't get "sold" a house of cards.

The weekend I was out of town she "fell" for a pitch so strong from a known on-line marketing company that she invested over $2500 for what amounts to nothing more than a bad WP blog and some Adsense. They promised her "her own business".

Of course this company has continued to ask her for more investment to "make it" or they can't guarantee she will be successful.

No she should not have used her retirement money and yes she should have waited for counsel but she didn't and I am trying to help her now (no charge) salvage something. She is a prolific talented writer and I think we can get her started the right way.

It really angers me when folks who are desperate to try a new direction in their life get slammed by fast money con artists.

I know, caveat emptor, but come on these are tough times and we all inadvertently get painted with the same brush when rogue IM folks play shell games.

James, I feel for the guy. I think one thing to do is to point folks to this forum where they can really get a feel for what IM requires before getting out their wallet and where they can clearly see there is no free lunch.

Thanks for bringing this up.

I'm not familiar with NZ law but if it is anything like Australian law (and I suspect it is) you might find that when it comes to misleading and deceptive conduct and unfair/unconscionable contractual terms it doesn't matter whether it was a B2B or B2C transaction. If the guy wants to get his $4k back, you might want to suggest he consult a lawyer. Again, not familiar with the legal scene in NZ, but he might be able to get a free or fixed-fee consultation with a lawyer to get their appraisal of the situation.

This sort of thing really sours people to marketing online and people who market that way make me sick. They are little better than drug-pushers in my opinion, in the way they take advantage of the unwary, get them hooked and push their crap on them.

They stain those of us who want to offer an honest and ethical service or product.

Hope he manages to get some recompense.

Roy

ExRat - right on. Anyone in business knows to check the basics of an offer like that... but everyone in business had a "first time" - and it's the first timers that are getting screwed over. and like you say, that's certainly not unique to IM.

and yes, it's a wasted lesson if he doesn't imprint it in his mind and move on.

i'm confident i can drive traffic to his site (if his wife agrees to let me try). and/or get his money back if it's legally possible and worth the effort.

thanks for the heads-up about dropship pricing! he had already noticed from online auction sites he needs to slash his prices just to meet the market, so i suspect you are spot on with that issue.

what a mess. might just have to chalk it up as a $4k training experience... but hopefully i can help him salvage something out of it.

not that $4k is much. crikey in one of my ventures that collpased i lost $180k before i extricated myself from lease agreements, redundacies blah blah blah. so yeah, the comments we're posting here are indeed from bitter experience. from that perspective, perhaps he got off lightly - at least now he's talking to someone who cares enough to try to teach him how he got shafted.

Sounds like it's the same bunch who regularly send me letters offering a free seminar with free lunch or dinner at the local club. I know a guy in Auckland who spent 8k on this for multiple sites and hasn't done anything with it.


Andrew

I can only say - poor guy...

For start $4000 isn't spare change

He could came to WF before he started such biz

just my 2 cents

James, thanks so much for your follow up private note. As you suggested I'll keep the focus in the forum on internet marketing.

Regards,
Allen

What was the name of the company that he was dealing with? I hate pricks like that who take advantage of others....

RB,

I've edited the post to remove the off-topic material that distracted from James's point about Internet Marketing scams. Thanks again for your nice private message.

Regards,
Allen

Sic Campbell Live on them.

I loathe people who give IM and web developers a bad name by doing things like that.

Let me guess, storesonline. Or are they doing business as imergent?

I saw their pitch....talk about overpriced...ouch.

There are both bad things and good things to be said about StoresOnline.

We bought into StoresOnline in much the same way as the factory worker you mentioned. We went to a long high-pressure sales seminar locally where they did their best to convince people that for $ 9000.00 you can have 6 websites selling stuff online and be rolling in money in no time. That was way too expensive for us, but we did buy into the 3-website package for $ 4500.00 CDN. Then came the extremely high-pressure phone calls trying to sell us everything from "how to sell on eBay" to "advertising and SEO" to "hands-on mentoring program", etc., etc., etc.

They really do NOT tell you HOW to do anything. They leave you to either figure everything out on your own, or pay huge $$$ for their coaching programs. There is almost no useful information available from them on how to find dropshippers unless you pay for the mentoring program. There is almost no useful information available form them on how to market your site once it's online, unless you pay for their advertising and SEO courses.

The first pitch was for their "all-inclusive hands-on mentoring program" for $ 20,000.00 CDN. Ouch. We said no. Then they offered us a reduced-support program for $ 15,000.00 CDN. We said no. Then they offered us a cut-rate bargain package for $ 10,000.00 CDN. We said no. After that we got more high-pressure sales calls for various other aspects of e-commerce. Every pitch was minimum $ 5000.00 CDN. We said No, No, No, No and No. Eventually they stopped calling.

After about 9 months of floundering in the dark with a 3-website license and no clue what to do with it, we eventually decided on 3 niches, and went looking for wholesale dropshippers. For the niche we were most interested in (computer components for gaming), we cannot find a legitimate wholesale dropshipper anywhere online. For the jewelry & bling niche, we managed to find some legitimate wholesale dropship suppliers and taught ourselves how to use the StoresOnline system to build our bling website. It took a LONG, LONG time, since we had to learn every little thing step by step on our own by trial and error, spending hours and hours reading through their not-very-helpful online help system, and also spending a lot of time using their online chat help. The third niche depends on other people doing their part, and we discovered it is next to impossible to get other people to do anything. They express interest, but then procrastination trumps interest.

Now for the good news. If you manage to not get suckered into any of their high-pressure add-ons, the StoresOnline site-builder software interface is actually very good. Everything you need to create an online e-commerce website is included, providing you spend the time to figure it all out. You don't need to know anything about CPanel or HTML or PHP or any other web programming stuff to use it. There are hundreds of different templates to choose from, and you can switch easily betwen different templates if one does not seem to be working. Their online help system is pathetic. It leads you around in circles and it is very difficult to find the answers you want. However, the online chat help is usually VERY good, and VERY helpful. The odd time you get someone who doesn't have a clue, but most of them know the software and what it can and can't do, and were usually helpful in at least pointing us in the right direction if not solving the problem outright. The help system includes some reasonable information about Search Engine Optimization, although it could be a lot better.

So now we have a website. Whoopee! Hardly anyone is visiting it, and nobody is buying anything yet after 5 months online. It costs $ 35.00 / month CDN to have it hosted, which of course is way over-priced because it includes the ongoing right to use their storebuilder software interface and ongoing chat support. Plus we still have 2 unused site licenses because we don't want to be paying $ 35.00 / month for them without making any income from them.

So to summarize StoresOnline, they have a good, decent software platform for building and maintaining e-commerce websites, and good online chat support, but it is very expensive to buy and use, and they hit people with high-pressure sales pitches for all kinds of extremely expensive add-ons. They try their hardest to get people to spend as much as possible, and they don't seem to care whether people succeed or go broke trying, as long as they succeed in milking people for thousands of dollars each.

We are using StoresOnline, and without it we probably wouldn't have a website online, but it is very expensive, even without buying any of the add-ons. And we sure did NOT like the high-pressure sales pitches galore.

Bill & Marsha, I'm curious: when your time is up with S.O., will you be able to take everything with you? Or will you have to redo everything from scratch on your new host?

Regards,
Allen

Of course I feel sad/sympathy for the guy/fellow that had his shirt taken, and of course agree that the guys that took advantage of him are doing wrong. That goes without saying.

Two things:

1. He should do something about it. If he feels it is a scam (and that indeed it is, and not just a couple legit business guys frankly stating that he really does need to do traffic, and him being lazy not wanting to follow up on it, etc -- btw from what you've said it does sound like a scam) -- then he needs to do what he can to get his money back.

2. If he went into it without doing any research, and just pegged his hopes on 'get rich quick while someone else does the work', then I would say it is a good part his fault if not all his fault for getting into that situation. (Because it is just another variation of someone say playing the stocks and expecting to make a killing based on what a broker advises without doing any intelligent research, or putting all your money in slot machines because a big payout should happen any time soon). He should still, however, do what he can to get his money back.

If, however, he did his research, (at least to the best of his ability), -- and then got scammed, then of course I would say it is the other guys fault. However, he should still do what he can do get back his money.

Bottom line -- tell him to do what he can to get his money back, and the next time he wants to invest in a business that he doesn't understand, do the research first. Otherwise it is like throwing darts at a board and hoping that something hits.

Adaptive/Allen, we are not sure about that. There is an option in the StoresOnline development interface that allows you to download an Excel file containing all your product information, so it MAY be possible to upload all that information into a new site, providing the format is compatible with maybe a bit of tweaking. The probability of the export being totally compatible with another shopping cart is unknown, but probably pretty low. It is certainly possible that we'd have to start over from scratch.