Why do people believe they can get something for nothing?
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You would think, after a few decades, that these sales pitches would fall on deaf ears. After all, this sort of nonsense has been going on since before I was born. But the same old siren song ensnares a new generation every few years, who spend what little money they have on dreams of avarice, only to see it all fall apart in spectacular fashion.
A recent article in The Atlantic recounts how a young couple spent their life savings of $40,000 trying to sell things on Amazon. They saw a podcast - and nothing ever good comes of a podcast - about how to make money buying stuff cheap from China and then selling it on Amazon. The guys who run the deal offer to coach you on how to do this for the low, low price of $3,999, which if you are astute is four grand.
(NOTE: The idea that you can "make money" as a merchant middleman, whether it is this scheme or MLM or whatever, is far overstated. In order to make money as a product distributor, you either need exclusive products, exclusive territories, or a huge volume of business and a razor-thin operating margin. The minute you make dollar one in this sort of work, someone else gets into the same business willing to make 99 cents - and a race to the bottom begins. Any job that involves sales itself is tough. Any job that requires you to be a mercantile middleman can safely be called a con).
But of course, there's no secret how to sell things on Amazon. Go to amazon.com - it's all explained right there in black and white. But of course, a lot of people can't read these days so they need someone to teach them using podcast videos or whatnot. Similarly, it's not hard to buy things from China - the Chinese are all too eager to sell you things. That's why if you want some stuff for cheap, skip Amazon entirely and just go to eBay and buy directly from Chinese sellers who will send you oddly-shaped packages that take three weeks to arrive, but contain merchandise at startlingly low prices.
When you read stories about these sort of cons, the punchline is always the same: it isn't rich people getting caught up in this sort of nonsense, it is Joe working-class who squanders what little money he has on these wild schemes and then becomes embittered and disappointed. But of course, the next week they sign up for an MLM scheme, convinced that this time around they are really going to make money. The gullible never learn!
When I was a kid, we used to watch Jackie Gleason's The Honeymooners, which was a show about a sewer worker and a bus driver and their wives living in an apartment house in New York City, trying to make ends meet on blue-collar wages. Almost every week, the boys come up with a scheme to make lots of money, and they spent what little money they had on these schemes, which always end up falling apart.
These were like educational videos - or should have been. They sent the message that trying to make money through a scheme is a pretty pointless waste of time. Moreover, it told us that there were a host of con artists out there who will separate you from what little money you have with promises of riches - and you have to be astute enough to say "no" to them.
It almost all of these schemes, the victims never bother to ask themselves the most salient question: if this was such a money-making opportunity, why isn't the guy selling me the scheme engaging in this himself? Why on Earth would you sell the goose that laid the golden egg when you can make more money with the golden eggs?
And this is what the two people who were profiled in the story failed to ask themselves. Why are these guys with a podcast selling the secrets to Amazon when they could just be selling stuff on Amazon themselves? In fact, by giving away these so-called "secrets" they're just creating more competition for their own sales channel. If it was such a lucrative deal, they wouldn't be telling anybody about it but practicing it themselves.
But of course, to any thinking person, the answer is obvious. You make a hell of a lot more money selling the "secrets" of selling on Amazon for $4,000 a throw, than you would actually selling products. Moreover, it's a hell of a lot less work than actually selling the products.
Nevertheless, I don't expect this sort of thing to go away anytime soon. Like I said it's been around since before I was born, and it continues even today. And despite articles like this in The Atlantic, which should alert people these sort of things are scams, more and more people get caught up in them everyday, never learning from experience of others, much less from their own experiences.
Sadly, this is the way of the world. There will always be sharp operators willing to take money away from the poorest people. And it will always be poor people who really don't understand how money works, because they are not very smart, even though they're probably decent hard-working people. As Jesus said, "the poor will always be with us," because they always make poor decisions.
And sadly I don't think all the rules, regulations, and consumer protection agencies in the world can put an end to this anytime soon, because they haven't been able to put an end to it for over a millennia.
Maybe articles like this in The Atlantic will educate consumers not to get conned by these deals. But I doubt it. Do you think the folks who send off $4000 to some guys with a podcast are reading The Atlantic? Or reading at all?
Hey, right there, in the open, is the secret to wealth: learning to read and then reading.
