What kind of a scam is this?........................... Help me figure out the angle.

[Doctor Zoidburg]

I know a person who is being offered a business deal, I am absolutly sure that it is a scam of some sort. My friend is being offered an opportunity to get in on a business venture to sell built in vacuum cleaner systems. He is to put up some money alone or maybe with a partner or two, and the scammer will set up the whole deal The scammer will start by getting telephone solicitors and sales people to go sign the contracts. These telephone solicitors will be paid only when a sales prospect accepts an appointment to have the saleman visit their homes to see the product, the sales people will visit the prospective client and make the sale and only are paid on commission. The product is a well known brand of built in residential vacuum cleaner. The scammer will also get people to have the vacuum cleaner system intalled once the sale is made. Here are my questions.

- How much demand is there for built in vacuum cleaner systems?

- How many people would spend in the range of $2000 - $2500 or more to have it installed in their homes.

I know this is a scam, I just want to know what the angle of this scam is. Will the scammer eventualy colapse the business and run off with the money.
Is there a money laundering aspect to this scam?


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[bigshot]

I think that you are right. Most likely a scam. While the demand for central vacuum systems is strong, there are tons of reputable dealers out there who can offer this service at a fraction of the price that you have indicated.

There's plenty of commission based jobs in this area, and they can do well when representing a builder who might be constructing large numbers of homes. I just wouldn't understand the need to invest your own money when you can sell on a commission basis risk free. In this case, he is essentially selling on commission, but paying for his leads.

Does the company who is selling this system have a track record, or any credible referrences? Remember, if you have a good product that is proven, the world will beat a path to your door. I wonder how many contractors this guy has who essentially pay him for leads...

 

[Doctor Zoidburg]

I did some checking around, I was told that these built in vacuum cleaner systems are very hard to sell to existing finished home due to the fact that pipes need to be installed into the walls. Most of these systems are sold to homes that are being built where the pipes can be installed before the house is finished.

- Has anyone had the experience of installing one of these systems in an fisished existing house? What are the difficulties?

- Does it make sense to go after individual sales to people that have older finished homes where it is difficult to install trhese systems?

 

[papasmerf]

I did some checking around, I was told that these built in vacuum cleaner systems are very hard to sell to existing finished home due to the fact that pipes need to be installed into the walls. Most of these systems are sold to homes that are being built where the pipes can be installed before the house is finished.

- Has anyone had the experience of installing one of these systems in an fisished existing house? What are the difficulties?

I have put a few in

The difficulty in a finished home is you are cutting blind into the walls to install the system. It can be done but I would recommend it be done only by very experienced installers.

 

[blueman]

I did some checking around, I was told that these built in vacuum cleaner systems are very hard to sell to existing finished home due to the fact that pipes need to be installed into the walls. Most of these systems are sold to homes that are being built where the pipes can be installed before the house is finished.

- Has anyone had the experience of installing one of these systems in an fisished existing house? What are the difficulties?

- Does it make sense to go after individual sales to people that have older finished homes where it is difficult to install trhese systems?

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most new homes today come with central vac already roughed in.

to install the necessay pipes in a home already constructed would be a messy, expensive job and not a good idea at all

there is an opportunity here if u contacted people who had a new home recently built and they did not buy the central vac option at the time of buying the home.

you would only have to supply the equipment and install the motor/cylinder in garage or basement.

to retrofit a central vac is a bad plan (imo)

 

[Moraff]

I did some checking around, I was told that these built in vacuum cleaner systems are very hard to sell to existing finished home due to the fact that pipes need to be installed into the walls. Most of these systems are sold to homes that are being built where the pipes can be installed before the house is finished.

- Has anyone had the experience of installing one of these systems in an fisished existing house? What are the difficulties?

- Does it make sense to go after individual sales to people that have older finished homes where it is difficult to install trhese systems?

Depends on the finished home.... One place I lived was one floor with a basment... basement ceiling was not finished. Installing central vac would not be too hard and access to the walls from below is very easy. (minimal patch work required). Now if you lived in a 2+ story house w/finished basement it would be a very difficult job involving punching lots of holes in the drywall, then patching them, sanding, painting.....

 

[john frankly]

sound like a scam to me LOL

 

[blackrock13]

sound like a scam to me LOL

Maybe not a scam, but pretty one sided.

 

[papasmerf]

Door to door sales is only good for management.

Sales people do well only if they sell.

 

[john frankly]

well given the fact.... it high cost vaccum....I say scoop and run..and yes extremely one sided

 

[Never Compromised]

I checked with a well known central vac dealer. The vac unit is anywhere from $500 to $1200, hose kits anywhere from free to $900 for "deluxe powerhead unit", and installation is $80 per roughed in outlet. A price of $2000 is not unreasonable in some circumstances.

While there are companies such as Rainbow, Kirby, Tri-star and Filter Queen that still do the direct marketing that you have described, I don't know of any central vac place that does.

But from what I know of the direct marketing industry, a $2500 Tri-star vacuum really costs only $400 wholesale. The rest is swallowed up by marketing, commissions, and profit for the distributor.

I would not automatically say that your friend is being scammed. There is obviously a market for central vacuums. Although most builders will do a rough in, not every home comes with a complete system.

 

[HAMSTER INSPECTOR]

I have no experience in door to door sales nor in telephone solicitation, but I suspec that the telephone solicitors and the contract closers will try do solicit and sell, but not do very well and there will be a high turn over of people. The scammer / manager of the project will benefit both ways and there will be little profit for the investeor. Can anyone comment on this?

 

[oldjones]

There's clearly a market, even for the retrofits, but the scammer—no pre-judgement here folks—proposes to find that market by cold calling on the phone.

WE all know how popular those calls are, and even if I was actively researching vacs, I doubt I'd let the telemarketer get far enough to say that's what they were pitching. But that's just me. And everyone else on the DNC list. How 'bout the wasted calls to people who already have central vacs?

How this works—if it works—is to make the calls out at such a low cost per each (which argues for auto dialled recordings, illiterate FOBs taking down details, and the lowest-cost prospect list he can find) that the few sales can cover all the hangups and refusals and still leave profit to share out.

And that's not the kind of business you'd want to admit to being part of, would you?