U student warns against buying into fast-money operation

by Latasha Webb

University senior Koran Addo lost more than $100 this fall while trying to earn money by working for Excel Communications.

The company has placed ads in The Minnesota Daily’s classified section promising “$16,000 this semester” for “sales/entrepreneurial minded” students. Excel holds weekly meetings at Carlson School of Management in an effort to get students interested in its program.

But Addo said students should be careful about getting involved.

“I wouldn’t tell anyone to sign up for this,” he said. “It ended up costing me a lot more than I thought.”

Doug Johnson, director of New Business Development Enterprises at Carlson said he sees several red flags in the Excel promise.

“One red flag would be that you have to pay. I shouldn’t have to pay them to sell their product. They should pay me to sell their product,” he said.

“Multi-level marketing programs are generally problems because you don’t get paid to sell a product, you get paid to sell other people,” Johnson said.

Addo said that aspect of the program was the most difficult for him.

“They tell you to approach friends and family and ask them to help you out. They don’t tell you to sell; it’s like you approach friends like you need help,” he said.

Addo said at first he felt OK about it because he thought his friends and family were going to get good rates on long distance and cell phones.

But he said there were hidden charges.

“I got the rates, but when the bills came they were more,” Addo said. “I never got any more customers because I didn’t want to make enemies.”

Shannon Gail, an Excel representative who works in the program, said people who aren’t successful in the program must not be doing what they’re supposed to.

“Having a business is like having a child. If you’re not taking care of it, it’s not going to grow,” she said.

As for the $245 starting fee, Gail said, “Excel is going to pay someone to train you; they’re going to give you support staff and more. They wouldn’t do that if they didn’t have commitment from you.”

Gail said it is not difficult to earn enough to live on in the program, but some people can’t take the rejection that comes with the job.

But entrepreneurial expert Johnson said this opportunity is not an opportunity at all. He said Excel is taking advantage of the tight job market and the average college student’s desperation to earn enough money to pay for school and live comfortably.

“It’s really not that you’d own part of the company. It doesn’t have much to do with starting your own business,” he said. “You get paid to sell other people.”

Gail disagreed. She said her job is similar to recommending a good movie to a friend.

Johnson said the best advice he could give to students such as Addo who are tempted to try a program like Excel’s is to use common sense.

“You have to watch out for yourselves,” he said.

Latasha Webb welcomes comments at [email protected]