WHEN THE DEAL IS TOO SWEET TO BE TRUE, INDEED THINK TWICE

I stumbled upon the statement below in the business opportunities and ideas website about the famous California Gold Rush of 1849

“ It’s claimed that the people who got rich in the California gold rush in 1849 were the people who sold tools to the miners. Apparently 94% of the gold miners failed to find any gold, approximately 4% of the gold miners found some gold, but barely managed to make a living from it and less than 1% found enough gold to get rich. In contrast many of the non-gold miners, became rich by selling the picks, shovels and tools the gold miners needed in order to prospect for and mine gold. I suspect a fair few made their fortunes selling food and alcohol to the miners too.”

I decided to find out more about the California Gold Rush that took place in 1849 so I googled Wikipedia and read the following

“ The California Gold Rush (1848–1855) began on January 24, 1848, when gold was discovered by James Wilson Marshall at Sutter's Mill, in Coloma, California.[1] News of the discovery soon spread, resulting in some 300,000 men, women, and children coming to California from the rest of the United States and abroad.[2] Of the 300,000, approximately 150,000 arrived by sea while the remaining 150,000 arrived by land.
These early gold-seekers, called "forty-niners," (as a reference to 1849) traveled to California by sailing boat and in covered wagons across the continent, often facing substantial hardships on the trip. While most of the newly-arrived were Americans, the Gold Rush attracted tens of thousands from Latin America, Europe, Australia, and Asia. At first, the prospectors retrieved the gold from streams and riverbeds using simple techniques, such as panning. More sophisticated methods of gold recovery developed which were later adopted around the world. At its peak, technological advances reached a point where significant financing was required - increasing the proportion of corporate to individual miners. Gold, worth billions of today's dollars, was recovered, which led to great wealth for a few. However, many returned home with little more than they started with.”

Please note that

 “ gold worth billions of today’s dollars was recovered which led to great wealth for a few. However, many returned home with little more than they started with” 

Do you find it strange that of all those people who immigrated to California to change their fortunes, only a handful of people actually striked it rich, the rest went even more broke than they had actually been before even they went to California.  Actually it is claimed that the people who became rich from this were the people selling digging tools to the miners.

Lets look at a few local similar incidents that have taken place in Kenya

1.The so called “ Pyramid schemes”e.g DECI
When Kenyans heard of how easy & fast they could make money with the newly introduced investment schemes without much effort, many people rushed to join the schemes without caution. They did not know that they were actually being swindled. By the time they got to know that they were being conned, it was already too late. There were people who lost all their money to those fraudulent schemes e.g savings, Pensions, retirement benefits while others had even taken loans.

2.The Sachangwan Fuel Tanker Tragedy
When the Fuel Tanker transporting highly inflammable cargo i.e Petrol overturned at Sachangwan, people rushed to scoop the free fuel so that they could sell probably to other motorists. Despite the people knowing the serious deathly risks associated with such activities, they ignored that fact coz of the thought of selling the free fuel to make fast cash easily. When the Fuel Tanker exploded hundreds lost their lives while others got serious burns & injuries.

3.The Safaricom I.P.O
When the Safaricom I.P.O took place, many Kenyans thought that they could speculate & make a kill from the I.P.O. Many people flocked their stock brokerage offices to purchase the shares. Generally the people’s plot was to offload Safaricom's shares at a higher price after they were listed in the Nairobi Stock Exchange. People even borrowed money to purchase the shares me included (I took a salary advance from work but now I am wiser) We all know what happened as we keep complaining about it. The share price right now is way below the price we purchased it at.

Now the reason why people did not succeed to make it rich in this incidents I have mentioned in this post is because of GREED. In our quests to become happy,wealthy and successful individuals, then let us not be greedy to become rich overnight. Money does not grow on trees we have to toil legitimately for it so that we may enjoy the fruits of our labour peacefully.

Finally WHEN THE DEAL SEEMS TO GOOD TO BE REA. THINK TWICE ABOUT IT.

HOW SAFARICOM DEALERS MAKE THE MILLIONS OR BILLIONS

 Safaricom being the largets telecommunications company in Kenya and also the most profitable company in the East African region, then Safaricom dealers must be making a kill by selling Safaricoms products. We all know that Safaricom has been announcing profits amounting to billions of shillings each financial year. I did'nt know how profitable it was to deal in this firms products until I stumbled upon the piece of information below from Kenyanentrepreneur.

"msaliti
May 5, 2009 at 2:22 am Good article but I’ll make a few corrections.The Safaricom Dealer business is a great model only that there are no new dealer licenses being issued. The number of dealers in the country is 400.
One needs to have at least 10 million shillings to operate with, with half that amount reserved for opening retail shops and the other half for working capital (buying stocks of airtime, phones, simex and data modems.
Dealers earn commissions from:

MPESA: This highly depends on the location of a dealers outlets. Urban areas with high population density are ideal and if a shop is doing 200 transactions a day, one could expect to make 100k easy from commissions payable. A dealer could also franchise other agents to open shops under the dealers name and collect 30% of the franchisees commissions every month for doing absolutely nothing.

299 or connection commission: for every sim card a dealer sells, they get a one off payment of Ksh 400 bob. On average, small to medium dealers connect 2,000-3,000 lines per month so they make 800k to 1.2M in connection commissions alone. Larger dealers with a country wide distribution network and presence connect more than 10,000 lines and above. Due to competition from other mobile phone operators and relatively high levels of penetration especially in urban areas, line connections have slowed down. As recently as 3 years ago, it was routine for dealers to connect 30,000 and upwards earning them at least 12 million per month.

Residual : This is the monthly commission paid on line usage. each dealer is allocated lines and once those lines are connected, the dealer earns 7.5% of the top up amount for life as long as that line is active. If a consumer tops up with 1000 bob a month, the dealer makes 75 bob from that line. Safaricom has 15 million users at last count and each of these users were connected to the network through their dealers.
Simex commission: if you loose your phone/line, you have to get a replacement for it. The dealer gets 50 bob for every line they replace.

Data commission: recently safaricom started selling mobile data modems. They are on the 3G network so the speeds are the best and the response is overwhelming. The initial price was 10,999 and has since dropped to 5,999. Dealers get 1,000 bob for every modem they sell. On top ot this, they earn 7.5% residual of the data usage.

There used to be only 18 dealers back in the year 2000. Then the number grew to 50 a year later. Trust me that all these dealers are multi millionaires now and there are even a few billionaires. Some of those early dealers have half a million lines to their name. So if dealer A has say 500,000 lines and assume an ARPU( average revenue per user) of 1000 bob a month that’s 500,000,000 in revenue for Safaricom. 7.5% of 500m is 37,500,000. One such dealer who i wont name and whose directors are multi- billionaires and own shares in every other listed company in Kenya. Ask people in the know they will verify this.Remember that the early users of mobile phones were people with cash and so these dealers hold most of the premium lines in the market.

A lot of the medium sized dealers have between 50k to 100k lines in the market with most earning residual incomes of between 1.5 to 7 million. Larger dealers, Mobicom, Samchi, Simba Telecom, Com21.. and the line earn 7-20 million with Mobicom being ahead of the pack.
Undoubtedly, Safaricom is the Microsoft of Kenya, it has created the most millionaires in the last 7 years. The best part is a lot of these dealers are fairly young guys. You go to a Safaricom dealer brief which is routinely held at the Laico regency and you will spot the best cars in town, Range Rovers, Mercs, Beemers, Hummers, Lexus’s, Toyota Land Cruisers…etc. Most of these guys are now in real estate with plenty owning office blocks and luxury apartments.

Safaicom dealers are fiercely loyal and protective of the company that feeds them. They are a motivated lot who do everything possible to make sure that they stay on top.No other mobile phone operator will dislodge this corporate behemoth from its market position thanks in part to their dealers. The gravy train is however over with 400 dealers competing for a piece of the pie. The last dealer licenses were issued in November 2006 and a lot of those dealers easily make just 500,000 in residual commission lone so they are not faring. That’s the dealer story from a safaricom insider."