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  1. #1
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    VEMMA is History!!!!

    Vemma was accused of being a pyramid scheme. Since this was pretty much true, VEMMA can no longer operate as an MLM. No more commissions or any other type of income shall be given to distributors any longer. They can only sell products to customers. Since only 22% of their sales were to supposed customers in the first place, VEMMA is pretty much finished as a company.

    Score one for anti-MLM! I hope that this goes on to change the whole industry, because the other MLM's operate similarly to VEMMA.

    http://www.azcentral.com/story/money...ling/32571325/
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  2. #2
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    Re: VEMMA is History!!!!

    Vemma has nothing to worry about. They should be able to sell those highly desirable and competitively priced products with no problem right?

    :blunt:
    Originally Posted by nomaxim
    Sorry there ''ohein56', but it appears that 'Joecool44' does not have the position that you envision on this topic.

    'Joecool44' has, as a matter of routine, refuted most of your accusations
    Quote Originally Posted by Jax74 View Post
    Some people have the ability to think critically, some do not. ohein obviously doesn't.

  3. #3
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    Re: VEMMA is History!!!!

    Yes, indeed! Since pro-MLM contends that most distributors are really just customers with no desire to build a business, they should be okay. They should be able to keep way more than the 22% retail figures that they had, since the distributors are really just customers, too, right?

    I look forward to seeing VEMMA's sales figures for 2015 next year. Even with half of 2015 already passed, the drop in revenue will be precipitous. Where's that brand loyalty?
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  4. #4
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    Re: VEMMA is History!!!!

    Absolutely. Chris Doyle even insists this is true. So Vemma will continue on as a retailer. No harm done to them at all. :sun_smiley:

    Quote Originally Posted by ChrisDoyle View Post
    Because its well known in MLM that approximately 80% of people who buy products in MLM do so purely as customers with no interest in building a business. This includes both retail and wholesale customers.
    Originally Posted by nomaxim
    Sorry there ''ohein56', but it appears that 'Joecool44' does not have the position that you envision on this topic.

    'Joecool44' has, as a matter of routine, refuted most of your accusations
    Quote Originally Posted by Jax74 View Post
    Some people have the ability to think critically, some do not. ohein obviously doesn't.

  5. #5
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    Re: VEMMA is History!!!!

    MLM distributors that fail (make little money or even lose money) are not really failures - they are really just customers that want the products at a discount - this is what pro-MLM says.

    This is what Judge Tuchi said after hearing Vemma's defense:

    "Much of Vemma’s contention that it is not a pyramid scheme is based on its proposal to reclassify many of its affiliates," he wrote. "Defendants have offered no evidence to support a finding that a Vemma participant who intended to be just a customer accidentally identified himself or herself as an affiliate."

    Judge saw right through that lie!

    Distributors are distributors, and customers are customers. Distributing to yourself does not make you a customer. If this were untrue, Vemma would not have been reduced to ashes by the FTC's accusations. That pro-MLM lie can now be put to rest, thank you very much.
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  6. #6
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    Re: VEMMA is History!!!!

    The azcentral "story" is utter rubbish, but you keep believing its true if you wish.
    "People are not interested in your product or your business; they are interested in solving their own problems." -- James Dillehay, Entrepreneur and Author

  7. #7
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    Re: VEMMA is History!!!!

    What is inaccurate in particular? Please enlighten us
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  8. #8
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    Re: VEMMA is History!!!!

    http://mlm.com/vemma-allowed-to-re-o...-the-industry/

    How about this?
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  9. #9
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    Re: VEMMA is History!!!!

    It's wrong on many counts because it was obviously written or it refers to ''info'', before the judges decision and is therefore based on assumptions and wrong one's at that. No, I'm not going to explain it to you; either read the judges decision properly or continue to look foolish spouting rubbish.
    "People are not interested in your product or your business; they are interested in solving their own problems." -- James Dillehay, Entrepreneur and Author

  10. #10
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    Re: VEMMA is History!!!!

    Chris, it is foolish to join this thread, tell me that the article is rubbish, and then decline to show/prove how it's wrong. Just saying.

    Anyway, yes, VEMMA hasn't been shut down, but they are under the strict control of the Monitor, which is the same firm that functioned as the Receiver. There are a number of restrictions.

    http://mlm.com/vemma-allowed-to-re-o...-the-industry/


    The Federal District Court of Arizona issued an order detailing the decision to allow Vemma to reopen its doors for business, while the case is being litigated. This is big news; as pointed out by MLM lawyer Kevin Thompson in his last article about the case, in the last sixteen cases the FTC has brought against MLMs, the defendants have not been allowed to resume control of their company. This decision is not permanent nor is it an across the board win for Vemma. However the court concluded “that measures less drastic than some of the relief the FTC seeks are available to remedy the harms shown” (14)*. You can read the court document yourself, but we’ll give you the basic facts and give you our opinion as to what this means for the industry.
    Vemma will no longer be under the control of the court appointed receiver. Additionally, the asset freeze that the court issued earlier this month will end.
    However, Vemma will be subject to continuing restrictions. The law firm who acted as the receiver will become a monitor reporting back to the court on Vemma practices. And while Vemma will be allowed to resume operations, the monitor will have access to business premises and records. Some business actions, such as disposing of major assets or creating new business entities, are prohibited without notifying the FTC and obtaining approval from the Court.
    Furthermore, major aspects of Vemma’s business model are prohibited under the Preliminary Injunction. We’ll go through and discuss each briefly here, but you can find the full list starting on page 21 of the preliminary injunction document. Keep in mind; all of these prohibitions are temporary and specific only to Vemma. However if any of them become permanent at the end of the case, they would set a precedent that could mean serious changes for several common business practices in the MLM industry.
    The first prohibited business activity on the list is paying compensation for recruiting new members. It’s unclear if this refers only to direct compensation for recruitment, which Vemma already doesn’t do, or if it includes bonuses for which recruiting new people is one step to qualification.
    Items two and three on the list prohibit the same behavior but each coming from a different active party (the company, and the distributors). The wording doesn’t follow industry terminology. Rewritten in more familiar terms, this is a prohibition against a Personal Volume qualification requirement. Here are the actual list items:
    2. Encourages or incentivizes members to purchase goods or services to maintain eligibility for bonuses, rewards, or commissions rather than for resale or personal use;
    3. Induces others to encourage or incentivize members to purchase goods or services to maintain eligibility for bonuses, rewards, or commissions rather than for resale or personal use; (21)
    It’s worth noting that virtually all unilevel and binary plans, and many breakaway plans, have a PV requirement. In order for Vemma to comply with this, their compensation plan will have to undergo major changes. Whether or not Vemma can find a way to make their compensation plan work without a PV requirement is yet to be seen.
    4. Pays any compensation related to the purchase or sale of goods or services unless the majority of such compensation is derived from sales to or purchases by persons who are not members of the Marketing Program; [emphasis added]
    This prohibition could be the most important and the most difficult for Vemma to adapt to, and it’s not completely clear what the court means. Is a majority literally 51% of an affiliate’s[1] downline volume? In that case would we see a variable cap on commissionable affiliate volume changing based on the customer volume from the same period? Alternatively, this requirement could be read to suggest that some bonuses could apply to affiliate volume, but that those bonuses would need to account for less than bonuses paid out for sales to people who aren’t part of the marketing program.
    According to knowledgable sources the majority of Vemma’s volume comes from purchases made by customers or affiliates who are functionally customers. However, the court declined to consider any affiliates customers in issuing this order. If, going forward, Vemma creates a clear distinction between actual affiliates and members who are functionally customers; they should be able to meet this requirement. The question remains, how?
    5. Constitutes a pyramid scheme; or
    The fifth restriction is pretty obvious. This is probably in there as a catch-all provision to allow the court to prohibit conduct that it didn’t otherwise describe.
    6. With specific reference to Corporate Defendants’ existing Marketing Program:
    a. Sells Affiliate Packets;
    b. Links or ties an Affiliate’s eligibility for bonuses, or the Affiliate’s accumulation of bonus qualifying points, to that Affiliate’s purchase of the Corporate Defendant’s product, such as through auto-delivery or Two & Go;
    The pressure to get affiliates to buy product packs to qualify for commissions, and to sign up for an autoship for those orders so they were sure to qualify every month, were two practices the FTC targeted in their complaint against Vemma. It is not surprising to see the court prohibit them. Many companies in the industry have packs and incentives for autoship orders, so if this restriction survives the entire case and becomes precedent for future cases, it would have a huge impact on the industry as a whole.
    It is hard to overstate how big of a win it is for Vemma (and potentially for the industry) that they got out of receivership and are able to resume business operations. We’re far from the end of this case, and it will be interesting to see how Vemma will walk the tightrope the court has put before them. If the restrictions in this preliminary injunction are an indication of the restrictions that the entire industry will have to operate under going forward, then this could be one of the most important cases the industry has seen in a long time.
    - See more at: http://mlm.com/vemma-allowed-to-re-o....wxCwEbFg.dpuf
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  11. #11
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    Re: VEMMA is History!!!!

    Basically, the way it seems to me is that the court restricted VEMMA's practices based on findings that go along with we've been pointing out about MLM time and time again on these boards:

    No more compensating for recruiting - yes, you cannot pay a headhunting fee outright, but it seems that the common practice of paying a bonus when you recruit a certain number of new distributors in a certain time frame, where each of them reach a PV/BV benchmark. A lot of MLM's do this. Here's Amway's for example:

    http://www.amwayconnections.com/amwa...ck-incentives/

    No more PV volume requirement to receive commissions

    In order to legally receive a bonus, the VEMMA Affiliate must source the majority of their compensation from (retail) customers, not Affiliates (distributors) - before the trial, 78% was from Affiliates, and only 22% was from customers (This is the big one, the game changer for VEMMA and perhaps the industry in the future) - no VEMMA affiliates will be in the MLM top 200 earners for 2016 for sure!

    Affiliates and customers will be clearly defined; Affiliates being "functional customers" is no longer good enough, and never was, IMO

    No more selling packs and (de facto) requiring autoships to qualify for commissions

    Better policing of Affiliates regarding income claims

    There's more, but those are the major changes. I'm not a betting man, but as it stands VEMMA's products don;t retail well (78% vs. 22%), so I don't see how anyone is going to retail enough product to satisfy the majority retail rule in order to be paid commissions on their downline. Morton and other top Affiliates left VEMMA well before the court case, so the company has already lost a chunk of their product users. Unless they dramatically reduce their price point to compete in the open market instead of just Affiliates, they'll be reduced to a very small percentage of what they were, if they can even stay in business. Affiliates that seek income aren't going to want to work with a comp plan that limits them to overrides that, at best, cannot be more than their direct sales earnings. I see VEMMA's Affiliate numbers dropping off of a cliff in the near future.

    Realize that most other MLM's bear resemblance to VEMMA - low retail rate vs. internal consumption rate, PV requirement for overrides, Amway-type Fast Track Bonuses that incentivize recruiting by paying out when you recruit a few distributors and receive a bonus when they hit a certain PV/BV number that first month or two. VEMMA got hit first - who's next?
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  12. #12
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    Re: VEMMA is History!!!!

    I've been pointing out time and time again that MLM needs significant retailing in order to be legitimate, that distributors are not customers and that there needs to be a clear definition of each. The PV requirement in order to receive downline overrides is exploitative as well; you should be paid from the first sale regardless of personal volume. Companies have this PV requirement because distributors are the ones that are buying 75% of the product or more, do they need to incentivize autoship in order to keep sales in lieu of having any retail customers. It would only be fair to have a clearly established rule of a retail benchmark to maintain in order to be given downline overrides. Keeps everyone honest.
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  13. #13
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    Re: VEMMA is History!!!!

    Here's a facebook post from MLM'er Richard Bliss Brooke. The original:

    https://www.facebook.com/RichardBlis...952971126849:0

    I've bolded and underlined the most important parts:

    “The Vemma decision. What does it mean?
    It means that Vemma and just Vemma must change immediately their compensation plan and a lot of their promotional materials.
    It means they get control back of their company and their assets and can be back in business Monday morning.
    It means that the FTC now has some traction in requiring actual customers in order for sales leaders to qualify for commissions...something that many of us have been wanting anyway for years.
    Vemma is the only company that is required to make any changes based on this. And all MLM companies will be looking at this decision and deciding what their profile is for the FTC to be looking at them.
    Vemma would never have been looked at had they not had kids on college campuses nationwide brashly, arrogantly and rudely yelling at kids ( and their parents that saved all their lives) that college is stupid. And calling anyone that disagreed with them Haters.
    Vemma is not the only company that has factions of distributors that are old school, frantic, manipulative ,deceptive recruiters. Our profession is loaded with them. They live in the pure MLM something for nothing environment. They jump from " the fastest growing company in the history to the next faster growing company in history". They are parasites. If they stay in our profession they eventually learn. Some sooner than others.
    There are young pilots. There are old pilots. There are Bold pilots. But there are no old bold pilots. They same is true for MLM leaders. There are no old (replace bold with rude) MLM leaders. Their marketing place eventually runs them off.
    In short here is what gets companies in trouble. You might score your company in these categories:
    1. Do customers actually buy and keep buying the products...customers outside the compensation plan. What is the ratio of active distributors to customers. If it is at least 1 to 1 you are golden.
    Mediocre overpriced products have always been at the core of the customer issue. Many MLM companies have products that no one would buy if it were not for the compensation plan. Those companies are de facto pyramid schemes. If you are in one do us all a favor....Get Out.
    2. How do you present the income opportunity? Anyone can do it, you will probably make a lot of money, its easy, no selling and it all happens very quickly, look at my on stage giant fraudulent check and the new car I "won"......Or...it is work, selling, most do not succeed and it takes 4-5 years to build a significant business. Are you Real or Hype?
    3. Google your company. Are the majority of the entries positive or negative. Regulators have google too.
    4. Press. Is there bad press about your products or company? It does not matter if it is true or not. Regulators love seeing bad press. It means they can take you down just by filing a law suit against you and claiming you are a pyramid. Vemma..
    5. Lawsuits? Former distributors, suppliers, employees, shareholders or competitors. Lawsuits mean there is a culture of poor communication and a lose lose culture with stakeholders.
    6. Growth...the faster you grow the more the sales force grows out of compliance. Growth is great but out of control growth is a death sentence. Every leader needs to understand the rules and the culture. If they join and build too fast the company gets way out over its skis.
    7. Inventory loading and unhappy distributors.. Are there distributors with a bunch of product they cannot sell? Does the company make buying it back difficult? Is it like getting Timer Warner or Comcast on the phone?
    8. Culturally..are you all about the money the flash, the growth and the comp plan or all about the products and personal growth?
    Score your company. Score your own team culture and decide your risk profile. My guess most of us are golden.
    There are hundreds of companies that have had similar compensation plans to Vemma for decades that have never been at risk and will never be at risk because they never get out over their skis. They never let the goons lead the way.
    Although I hate that the FTC and the judge used Vemma's bad press and over zealous opportunity videos to nail us and I hate that they are ignorant about the good things we do and the customers we do create, I am very happy that top sales leaders and companies will be thinking hard about how to shift their focus.
    We have often relied on failed distributors to be the majority of our customers or in the case of an pyramid schemes we have not paid any attention to customers at all. Now we have to pay attention to actual customers. This is fantastic for our profession.

    This case and tragedy of it may also serve to motivate all MLM companies to come together in an alliance far more powerful that we have as DSA members. And while I would prefer that this WAS the Direct Selling Association's mandate it may not be a fit for the agenda of its largest members.
    Imagine an Alliance or Association that was NOT controlled by the MLM companies themselves but was established with clear mandates as follows:
    1. To channel the resources of millions of distributors and hundreds of companies to wage an unprecedented education and marketing campaign to establish the legitimacy of the MLM profession. To establish our right to sell and income opportunity as well as our products and our right to our model of " The sales people we have the more sales we have". We have the right to recruit and recruit and recruit just like realtors, insurance and franchising. Imagine a ten million dollar a year campaign. Imagine full length actual educational documentary films. Imagine the most credible people on our side all voicing their support.
    This is all available with the right resources.
    2. To require all member companies to define customers and sales team leaders the same. Customers are those that do not recruit and do not receive MLM compensation. Sales team leaders successfully recruit and earn compensation. Simple. All members would show at least 50% customer sales.
    3. All member companies are required to submit their customer ratios and be audited annually. This data would be made available to any regulator under NDA.
    4. All members company's actual practices are monitored on an on going basis. The alliance staff googles the company every month and studies product and income opportunity promotion.
    5. The Alliance leader is an industry Czar. This is someone who's job it is to educate and sell the world on our way of selling products and services. Think Mark Cuban or Rita Davenport or Bill Clinton or Jeff Bezos. For a few million a year we can get someone with passion, credibility and reach.
    6. And the most potent force in the Alliance is you...millions of you. Sales team leaders that demand the right to build a business, demand the right to recruit as many people as you want to be recruited, demand the right to employ the MLM model " A lot people selling a little bit each". Imagine the buying clout a million sales leaders could create in travel, insurance, shipping, financial services, legal and anything else we buy. The discounts alone would offset the dues by 500%..
    7. Imagine a simple online certification program that taught all members the simple basics of legitimate and ethical network marketing. Imagine everyone being certified ...a card carrying certification that you are an Ethical Network Marketer.
    There is one 100 year old association controlled by the largest direct selling and MLM companies. There are only 200 members. There are at least 700 MLM companies based here in the US.
    There is the MLMIA and ANMP but neither have captured the masses attention....yet.
    We have an opportunity on the backs of Vemma and its sales leaders to rally our forces and take a stand for our profession. Perhaps the DSA will reinvent itself. Perhaps it will be the other associations.
    Perhaps it will be something brand new that turns this adversity into the breakthrough many of us have fought for.
    If you want to be part of a future dialog email me at Rb@RichardBrooke.com
    MLM's Mission Statement:

    "The primary product is opportunity. The strongest, most powerful motivational force today is false hope."

    "Almost everyone is not going to learn the skills and use them consistently over time, you would be better off joining Costco" -Dank111

  14. #14
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    Re: VEMMA is History!!!!

    I've been pointing out time and time again that MLM needs significant retailing in order to be legitimate, that distributors are not customers and that there needs to be a clear definition of each. The PV requirement in order to receive downline overrides is exploitative as well; you should be paid from the first sale regardless of personal volume. Companies have this PV requirement because distributors are the ones that are buying 75% of the product or more, do they need to incentivize autoship in order to keep sales in lieu of having any retail customers. It would only be fair to have a clearly established rule of a retail benchmark to maintain in order to be given downline overrides. Keeps everyone honest.
    I agree. I'm glad this was exposed and hopefully will be a factor in the Herbalife decision. Essentially, MLMs will have to reform or be shut down.

    Notice the pro MLMers have nothing to say?
    Originally Posted by nomaxim
    Sorry there ''ohein56', but it appears that 'Joecool44' does not have the position that you envision on this topic.

    'Joecool44' has, as a matter of routine, refuted most of your accusations
    Quote Originally Posted by Jax74 View Post
    Some people have the ability to think critically, some do not. ohein obviously doesn't.

  15. #15
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    Re: VEMMA is History!!!!

    We have often relied on failed distributors to be the majority of our customers or in the case of an pyramid schemes we have not paid any attention to customers at all. Now we have to pay attention to actual customers.

    Yes.

    But it seems with a one to one customer/distributor ratio you could still run the scam.
    Cat Police - SF

  16. #16
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    Re: VEMMA is History!!!!

    Imagine that? Actual customers in MLM?
    Originally Posted by nomaxim
    Sorry there ''ohein56', but it appears that 'Joecool44' does not have the position that you envision on this topic.

    'Joecool44' has, as a matter of routine, refuted most of your accusations
    Quote Originally Posted by Jax74 View Post
    Some people have the ability to think critically, some do not. ohein obviously doesn't.

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