I wrote a post recently regarding finding products to sell in your online store. In that discussion, I explained why trying to find products to sell through drop-ship membership programs is a bad idea. Thanks to Simplx.com for providing an illustration of what I mean.
Simplx.com is one of a few different aliases used by a group of people who typically market to people with "pie-in-the-sky" dreams of becoming wealthy overnight. They've used other names and websites, including:
www.simplicitygroup.com
www.simplediscounts.com
www.mallshare.com
www.simplerebates.com
www.irebates.net
Companies like this get leads (typically from seminars or opt-in lists) for people who are eagerly waiting for their chance at making quick windfall profits from the Internet. Customers are told how easy it is to make a fortune with no prior knowledge of Internet marketing, website design, SEO, etc. In fact, the names Simplx.com and "The Simplicity Group" make ecommerce success seem just so, well...simple. Sounds perfect, doesn't it?
The salesmen for these kinds of companies are like hungry sharks determined to extract a credit card from the voice on the other end of the line at all costs. Years ago I applied for a job with one of these types of companies before I knew anything about their tactics. I was told that getting hired there was a tough sell itself, because the leads were valuable commodities, and they didn't want me wasting any. The owners of the company asked me to listen in on a few sales calls to see if I thought I was cut out for what they were doing. I listened in as a "setter" called on some leads to prep them for a more experienced "closer" sales guy. Later, I listened to the closer act like he had the potential customer's best interests at heart, like he was best buddies with the person on the other end of the line. After he found out the customer wasn't qualified at the time because she didn't have enough credit available on a combination of her credit cards (Yes, they graciously allowed customers to spread the fee, which was thousands of dollars, across more than one credit card), he abruptly ended the call and spouted off some vulgar, expletive-laced insults about the person.
While I was listening in on this guy's calls, I overheard one of their top salesman behind us (who boasted over $10,000 in sales commissions from the week before, most of which probably went into buying accessories for his truck, gel and dye for his hair, and tanning supplies) cheerfully extracting over $3,000 from an older fellow who apparently didn't have enough savings to retire. He was looking for a way to quickly fill his retirement coffers with some quick cash. The poor guy thought he'd found a rare opportunity at a financial second chance. Instead he was simply donating to some punk kid's leisure fund. I wish I would have taken the phone from the sales rep to tell the guy to run while he still had an intact credit card. At least I ran from that job opportunity without wasting too much time.
It's only after a victim of one of these companies has forked over hundreds or thousands of dollars that the honeymoon soon ends and reality sets in. The customer realizes that making money online isn't so easy. It doesn't come without effort. Worst of all, this new partnership the victim has forged is all give and no take. The promised one-on-one coaching and expert advice turn out to be a phone number that's rarely answered. When someone does pick up, the "expert" voice on the other end is reciting general marketing techniques he's never used from a script that was probably written years ago by other people who never used the techniques either. Otherwise, they'd be employing those techniques instead of trying to sell their schemes. All this wonderful help and advice can be accessed for a low cost of hundreds of dollars at a minimum. Most likely you'll be out thousands of dollars along with the time you spend trying to get your money back.
If you're ever tempted to get in on this kind of "opportunity", don't be fooled. Take that energy and zeal you have for building your online empire, and expend it learning and implementing the principles that make up the legitimate (albeit longer and more painstaking) road to a successful career online.
For those who have had the misfortune of getting tangled in one of the nets I just described, feel free to post your experience here. Your experiences will be most helpful if you include the facts about what you experienced, including what was promised to you versus what was delivered.
Addendum to this post - October 13, 2009:
I was contacted by one of the owners of Simplx regarding this post. He was obviously upset about what I wrote, and I agreed to meet with him so that he could review with me the Simplx model for selling products on eBay and ecommerce stores. After the hour and a half meeting that involved each of us presenting our side of the Simplx business model, I told him I would edit this post to give more of his perspective. Despite the many online postings about Simplx being a scam, he seemed sincere enough in telling me that his product works for some people. With that said, a general principle to follow when contacting or being contacted by any kind of drop-ship membership company is to consider what's being offered by them, and think it through before making a decision. As for the Simplx model, I still have a hard time believing it's a good route for anyone who can set up an account with a distributor or manufacturer directly. However, I've removed it from my "Drop-shipping Scams" category.
I just got involved with Simplx and after going through some training, it seemed as if it could work. So I tried it out.
ReplyDeleteI have now spent some long tireless hours working to find some products and then preparing my html and posting 6 products on Ebay. I did mark up a few products and with others I was hoping the percentage would be good enough. Then after running the auctions for 2 days, the prices all went up from the suppliers I was using.
Long story short, the prices changed so much that I had to completely remove the items from auction and it's a good thing that none of the auctions had bids, or the that the Buy Now items sold, or else I would have to make good on those items and lose money.
In reality, it isn't the fault of Simplx, but with this type of volitility, there is no way to use these suppliers as dropshippers. (In my opinion) If they (Simplx) have people doing this successfully, they must know some secrets that the rest of us don't.
Trust me when I say, there is a good reason why Simplx only gives a person 7 days to evaluate the program, which isn't really long enough to see what's going to happen. You'll have to wait at least 30 days to get any kind of commission from your sales if you do sell some products. Plus it then costs $38.00 per month to continue on after the 7 day trial period. I also paid $299.00 to get started which if they hold true, I'll get that back If I cancel within the trial.
Between finding products, taking time to post them, and monitoring the suppliers prices for changes, and even more, such as return policies, shipping.. etc... it doesn't seem possible to me unless I have a team of people to do the work. Even then, it would take quite a juggling act to maintain any kind of ability to profit.
I do realize that there are exceptions to the rules. There are always people out there with an education or experience who can creatively work this system and make money, unfortunately most of us do business in a straight forward way because we want to keep things simple.
I could make money too if I could just go ahead and buy the products, because then the price would be locked in. To do that, it would probably take about $10,000 or $15,000 to be effect enough to make a living from it.
anon
Simplx is a scam. There is no doubt. I signed up for their service, with the understanding that it will take a lot of work to create my online business and make it successful.
ReplyDeleteFor months, I worked and researched products to sell on ebay. I found a few suppliers that had products through the SIMPLX network that I could profit on. I began to sell, sell, sell. My rebate checks (their sales commission program) started to rack up. When it came time for my 1st rebate check to be mailed to me, it didn't come. I inquired why. No response. I phoned and emailed every day for over 2 weeks before getting any response. My check, $400, was finally mailed.
The next month was worse. 1 month late for $700. Not a good pattern.
By the time my 4th rebate check was to be sent to me, they were on their 4th office manager in 4 months. They keep quitting due to the stress from client complaints. Matt and Adam (the president and the CFO) refuse to generate and send peoples hard earned rebate checks. The office only has the office manager in it and Matt and Adam stop in about once every 2 weeks.
My 4th rebate check ($1400) has not been sent yet and is now 45 days late. Late enought that my 5th rebate check ($1700) is already due. They owe me over $3000 in checks and refuse to send them to me. Not only that, they removed my supplier of choice from their network because I was selling to much from one supplier. I have the email from Matt (the president of the company of 4 employees) saying exactly that. I'M NOT MAKING THIS UP.
THIS COMPANY IS A SCAM, THEY HAVE AN "F" BBB RATING AND THEY ARE ONLY INTERESTED IN TAKING YOUR START UP FEE AND MONTHLY FEES UNTIL YOU DECIDE TO QUIT.
I AM FILING A LAWSUIT AGAINST THEM NOW TO GET MY MONEY FROM THEM. MY ATTORNEY SAYS THAT THERE MAY BE ENOUGH PEOPLE WHO HAVE BEEN RIPPED OFF BY THEM TO GO "CLASS ACTION". THESE PEOPLE ARE CROOKS AND NEED TO BE STOPPED.