Cagey Consumer

Consumer Alert: BigBook Direct

4/9/1998: In a press release, GTE announced that it has purchased the BigBook domain name and trademark. There was no indication of any change in the operation of BigBook Direct, although the BigBook Direct ads are no longer on the BigBook web site.
BigBook Direct is the direct sales division of BigBook, which claims to be the leading online yellow pages provider in the U.S. Judging by its press coverage, it would appear that BigBook has made its mark on the web.

BigBook is now offering a multi-level business opportunity allowing independent consultants to earn commissions for selling local businesses services offered by BigBook Direct, such as web sites. Persons desiring to become BigBook representatives can start with a minimum $50 cost as an independent representative, or can start with the Managing Consultant Training Kit for $349.

A Confusing Business Opportunity

Reading the description of the compensation plan, one might be led to believe that you can become eligible to receive commissions and bonuses on your downline only by purchasing the "managing consultant training kit" for $349, because if you don't purchase this, you are merely an "independent consultant" and as such, you do not receive any income from your downline.

But this is just a case of imprecise terminology on BigBook's part, because in the same web page, BigBook uses the term "independent consultant" to mean different things:

  1. someone who pays only $50 to work the BigBook opportunity
  2. someone working the BigBook opportunity who has not gathered at least 5 retail customer points
  3. anyone who is working the BigBook opportunity

MLMs that want to be Pyramid Schemes

Many so-called multi-level marketing businesses today are thinly-disguised pyramid schemes. They violate some of the tenets of remaining legal, through such practices as allowing purchases for personal use to count towards a quota, or they offer recruiting bonuses. Here's how the BigBook Direct program appears to avoid these problems:
  1. Does BigBook Direct pay for recruiting new participants?

  2. Do you need to buy the managing consultant training kit to participate?

  3. Do purchases made for personal use count toward the quota required to be a qualified consultant?

Similar to Other Plans

While some other businesses have similar programs that would be likely to be considered illegal under various state and Federal laws, this offers little assurance for participants in BigBook's program. Incredibly, BigBook recruited the former vice president of operations for AdverWorld, an MLM-based Internet advertising business that the Cagey Consumer previously identified as having several problematic characteristics that would cause "pyramid" to be an appropriate label.

BigBook's chairman, Kris Hagerman, claims that the people brought in with previous experience at AdverWorld were hired because of their experience at selling web sites... yet a cursory examination of web sites hosted on AdverWorld would have shown that credible web sites were few and far between on AdverWorld. If the ability of these people to sell web sites was the basis for hiring them, then it would seem that nobody at BigBook bothered to look at the web sites they had sold.

Straighten Up, BigBook!

BigBook Direct may have a bona fide product or service to sell, but they have evidently decided that their compensation plan will be more attractive if income from retail sales is paired with income generated from sales made to participants themselves.

But BigBook should be looking to make money for itself and for participants in its business opportunity from income generated through bona fide retail sales, not by inducing participants to sell other participants an expensive training kit. If BigBook Direct really believes in the value of their retail offering, they would have no need to do this.

The potential for individuals to make money hawking BigBook Direct web sites exists, but for the moment, the Cagey Consumer urges people to avoid this opportunity just as it would urge people to avoid any opportunity that is based in significant part on income made from sales to participants.

Multilevel Management [Red Herring, 9/97]
BigBook Revisited [Red Herring, 12/97]
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