Illegal chain letters and emails

Two government sites explaining what about chain letters are illegal, and why:

This page from the US Post Office puts chain letters in the category of gambling.

And if you'd like to report someone this page from the FTC provides a couple of complaint options.

Do us all a favor, don't even forward "legal" chain letters or emails that promise good luck to those who forward it on, and bad luck to those who don't. It's all BS and it's frankly rude to wish someone bad luck if they don't spam others.

More PayPal scams: Sitewealth

I love the FAQ at Sitewealth.info. The last Q&A is whether or not it's legal... here's the exact line:

"Is this legal?
Yes, Sitewealth Club its 100% legal. In return for your investment, you are given access to the list of e-books indside our membership section. Any program that provides a product of any kind is legal."

First off, how is it that none of the scam artists can spell? They use "its" instead of "is" to say that it's legal, and spell "inside" with an extra "d". Morons.

But is it legal? Fat chance. Even if it was, PayPal will probably shut it down before you read this blog. They barely leave room for legal MLM's, and none for outright pyramids. From PayPal's Acceptable Use Policy

"Prohibited Activities
You may not use the PayPal service for activities that:
3. (b) support pyramid or ponzi schemes, matrix programs, other "get rich quick" schemes or certain multi-level marketing programs"

So Sitewealth might get lucky and get shut down by PayPal before the Feds step in and sue their asses into the ground. The idea that you can sell "any kind" of product to avoid legal problems is utterly ridiculous. Either Sitewealth is full of total idiots (probably given their inability to spell) who actually believe that, or they are purposely scamming people. But the law doesn't care that you made a mistake when it's really easy to discover what you're doing is illegal.

If it were true, I could sell blank pieces of paper... or the good guys at Sitewealth were even more clever... they're selling electronic paper... eBooks. You pay only $2.50 and receive access to worthless eBooks and that is supposed to make the illegal pyramid scam legal. They have no costs, and create a downline where they are at the very top.

And guess where I discovered Sitewealth... on the E4L.biz forum where only idiots roam. They still haven't figured out that Lorna's pyramid scam is illegal. Nor do they realize that "biz" will ever actually launch.

Paypal "it's for real" - make $30,000 in 3 weeks

When they have to say "it's real" that's when you know it's NOT. People, stop being so dumb and gullible. Scam artists send out emails and post to forums and various web sites explaining that you can make thousands and tens of thousands of money via PayPal "which is free". All you have to do... promote an illegal Ponzi or Pyramid scheme. Oh they don't call it that. They tell you it's legal. They tell you it's amazing. They tell you it's fool proof. What they don't tell you is that they hope you are a fool.

First off, just read PayPal's rules... it CLEARLY states that ANY pyramid scheme is against their rules. Second, do a damn Google search when something sounds too good to be true. For some bizarre reason most of what you get when you try to Google this scam are the scam artists.

"Massive return on $10"
"Turn $10 into 10000 in Just 14 Days"
"A Real Money Maker, it really works"

Does any of that sound too good to be true????? Does the phrase "get rich quick" sound familiar????

It's an illegal pyramid scheme... illegal... as in get fined, maybe even go to jail. Of course, it DOESN'T WORK for most people, so most people don't get caught. Just a very few people actually earn any money... usually they're sending out thousands of emails with their own name in first position. And those are the folks getting in the most trouble.

There are LEGAL MLM's out there... they have products.... you actually have to SELL SOMETHING... and people have to actually BUY SOMETHING... otherwise.... ILLEGAL.

E4L sinks to a new low

Shocking! Stupid! Sad! What can I call this new E4L low??? The fact that not one person has picked up on what appears to be a truly 100% illegal pyramid scam being pushed by E4L's highest upline person, a woman named Lorna, is all of those things.

I didn't get the email so I can't say this with 100% certainty, but... I'm about 99% certain... that Lorna has emailed a ton of people something that can get her, and anyone who falls prey to it, into a lot of trouble. Lorna is probably the first, or one of the first to get enrolled in E4L and apparently has the largest downline with many thousands of people below her. But with no E4L business, apparently she's also broke.

Reading their Forum today, one member of E4L asked on the E4L forum if they had gotten an email from Lorna that in part said "pay $10 via paypal to her and put my name on the list then resend it to 100 people".
Ouch - right there I knew it was one of those illegal pyramid chain email letters that collapse very quickly, and are so obviously illegal that they get some of the participants reported to the Feds.

But not one person appears to have picked up on it. In fact, Lorna is the first to respond to his post.. and instead of apologizing, she insults him for "sensationalism". Yikes... how can she have no clue? It makes you wonder if she's ever responded to some Nigerian "attorney" who just needed $10,000 in order to give her 10% of some deceased billionaires fortune. How do people not see through these obvious scams? But there it is... her naked admission of being involved in a pyramid or Ponzi scheme... the kind that isn't iffy like E4L... it's 100% illegal.

What's more, her email apparently suggests using PayPal... and of course that will get her account closed... because oddly enough illegal things are against the PayPal rules. And I believe E4L... if they ever pay anyone anything... is planning to pay people via PayPal.

These things are so obviously illegal to me... maybe because I write about them. But I still don't understand how everyone else on that Forum has totally missed it too. In fact, a few of them are practically begging to be forwarded the email to they can get in on the scam.

Sometimes illegal pyramid schemes are disguised so well that they are hard to decipher and easy to get sucked into. But this is an incredibly obvious one that you'd think only the shockingly stupid could possibly get sucked into. Now I understand why these folks are still sticking around E4L after a full 4.5 months of missing their launch date. They all appear to be gullible and/or stupid not recognizing an obvious scam.

This scam is one sent via email, that says if you only send $10 to the person in the first position, and place your name on the list in the 5th position, and then forward the email to 100 friends, you'll earn some insane amount of money. It's usually something like $30,000 in 30 days, or $30,000 every month, so some "too good to be true" amount of time and money.

Now if the above works, and you send off $10 to the person in first position, and the scheme actually works and you get moved up to a 1st position and people start sending you money... well, congratulations, you'll get a lot of money sent to you. Then, PayPal will shut you down, and someone who gets emailed will turn you in. You may get fined and you will certainly have to give the money back. But chances are the scheme will collapse before it gets to you... which will be the best thing that can happen. You'll be out $10 and PayPay won't be the wiser.

When something sounds too good to be true... especially "get rich quick" promises... well... it's too good to be true. And if you're lucky, people who get sucked into these scams won't be the types of people trying to run your company. Ahh E4L... you guys are ridiculous.

Scammer Kevin Trudeau at it again

Finally Kevin Trudeau picks a subject that he can probably keep himself out of trouble with since it's NOT health related. The book "Natural Cures they don't want you to know about", a total sham and lie of a book, was followed by "The Weight Loss Cure They Don’t Want You to Know About" which I didn't bother to read because it had scam written all over it, and sure enough it got him more trouble with the FTC AGAIN. Both were health related, and it's far too easy to cross the line by making health claims, which Kevin is infamous for.

So this time he's chosen "debt" and money for his new book "Debt Cures They Don’t Want You To Know About". Now I am NOT going to buy this over priced book ($29.95 plus $11.95 in shipping) which includes a couple of "bonuses" (he is after all a master marketer... I'll give him that), because there are MUCH better sources for the same information.

One of the tag lines on his site is "Kevin is blowing the lid off the banking and credit card industry". Well, since you can't get into legal trouble pointing out just how greedy these industries are, and how easy it is to get into debt, this is actually a legitimate topic for him to attack. However, there are so many great books, advisers and advice already, the last person you should send $40 to is Kevin Trudeau.

Here's some simple debt cures:
- stop shopping for stuff you don't need
- rip up your credit cards
- call your credit card companies and demand lower rates - don't accept "no"
- create a budget and track every dollar you spend, then find things to cut out (like that $4 coffee when you can make a cup for pennies at home)
- improve your credit score.

If you've never tried to improve your score before, there are probably some really easy and simple things you can do. To start, order your free credit report at www.annualcreditreport.com. It's a virtual guarantee there will be numerous errors on your report, like other people's names and addresses. Get online and on the phone with each of the 3 credit agencies and start cleaning up all errors. Late payments and collections are much harder to clean up, but even more important. There's plenty of free advice on how to do this... like this article.

Cleaning up credit will make it MUCH easier to get the credit card companies to lower your rates. But don't wait to call your credit card companies. But the higher your score, the lower interest rates on car loans, credit cards and mortgages. it's probably the single most important financial thing you can do. Get your score as far over 700 as possible.

Finally - don't waste $40 on any Kevin Trudeau product when there is probably superior information, from more trusted sources, for less money. If you're in financial trouble, find a trust worthy adviser, and Kevin Trudeau is anything but trustworthy.

Unanswered E4L questions

Finally E4L sends out an email that doesn't try to extract money from it's members... AND Brad now promises a December launch. Could be another promise about to be broken, or just maybe they'll turn this apparent scam into a legitimate business. But even IF they actually do launch, it's time to return to the still unanswered questions.

The biggest and most important one is WHERE is the compensation plan? What or how will members be paid!!! Will they get a percentage of gross profits, a percentage of the gross sale, what???

WHY is this simple question not answered? Listen to the zealots and you hear how great it is that you get a "matching bonus" so if someone in your downline earns $10, then you earn $10 too. But not one person knows what their downline will ever make. Maybe they'll made 1 cent per product purchased, so it will require 5,000 purchased products just to earn a measly $50.

Why aren't members kicking and screaming to get a published compensation plan? Why would they spend so much time and effort building a business (meaning their downline) with absolutely no idea what, if anything, they will earn from their efforts?

My guess is that only Brad will make any "real" money if the business ever does launch. He's proven that he's OK shamelessly extracting profits from his members, so why should it be any different with the "real" business? And by hiding the compensation plan details... presumably until AFTER products start being purchased, he can introduce anything he wants AFTER he knows what his personal profit potential is going to be. He will have to pay that "matching bonus" but he can decide that very little initially gets paid so that there's very little to "match".

So where are the screaming calls for a published compensation plan? How can a business launch without one? Will Brad pocket virtually all of the very limited profits from a very low margin business and laugh all the way to the bank? Only time will tell. For now, no one appears smart enough to demand details.

If Brad can actually launch, and not pay for recruitment, he can put himself in the "legit" box and stay out of the "scam" box, and so my review job would be done. But I still predict a dismal failure of a business for everyone, except maybe Brad.

Last chance for E4L

Now 3.5 months past their "count down" launch expired, Brad sends yet another email whose real purpose appears to be to sell the same crappy eBook, Get Google Ads Free. Except this email (with the usual numerous mis-spellings and 3rd grade grammer) makes some big promises, shows ENORMOUS naivety, and states the "very important" thing about this email is to make sure your email is right in the back office... hmmm... isn't that where you got the email to send this update email??? I really can't get over how dumb this guy is... you have my email if I'm able to read this "very important" thing.

But let's start with what I think is important. The big promise... after all, these are the ones Brad constantly breaks. He said "next week" they are going to "export and import everyone" to the new database. This is a promise that has been made over and over again, and now we've got a "next week" date being promised (yet again), which as we all know is 3+ months late, but it's now totally unforgivable not to make it - after all, it's a simple database export.

Now the naive idea: Brad says it's too hard to make money on video games (huh? what about offering the lowest prices any where for DVD's and other entertainment products - low prices EQUALS low margins - so his entire business has the same problem). So Brad's solution is to get programmers to build new games that will be branded "E4L Games". Now I'm sure the cool aid drinking E4L'ers will see this as brilliant. I see naivety. Have you played a video game in the last 10 years? How many hours of programming goes into these? This is not "Pong" or Tetris or Asteroids or some simple and bygone era of games. I give this idea ZERO chance of taking off because IF they get a programmer to build for them, it will be a simplistic and cheap game that are largely available as freeware on the Internet already. So they'd be luck to sell a copy for a buck or two. No one else will ever build for these guys, ever.

But Brad does say "We will still sale the name brand games..." Oh, so you will still "sale" games? With the grammar and spelling errors in this email, you can only imagine the kinds of mistakes he's making if he really is building a site to "sale" Entertainment products.

And the real point of the email.... looks to me like it was to re-pitch the eBook for the umpteenth time.

Well... while U.S. marketers seem to start the Christmas shopping season on November 1st, to me it's still the weekend after Thanksgiving, which is a week from today. Brad's worst case promise has been "in plenty of time for the Christmas shopping season", so this is it... the final promise a legitimate person could make.

YTB nail in the coffin

My first post questioned the legality of YTB (read it here). But months later there appears to be no movement against them... but now their lifeblood may be cut off... per this article Royal Caribbean International "will terminate relationships with multi-level marketers (MLM's) which provide travel agency credentials and identity cards to consumers for the purpose of becoming would-be 'travel agents.'"

YTB is not named, but it's obvious they are one of the primary targets. When I was being recruited to YTB one of the main benefits being pushed was my ability to travel cheaply since I would be considered a "travel agent". That felt fishy to me since I clearly was not a travel agent, and had no intention of becoming one, but since I like to travel, it is what got me to look into the business. I stopped looking once I saw that the primary way YTB'ers make their money is by selling the travel agent web sites... NOT from selling travel. My understanding of MLM laws is that you can NOT sell web sites as your primary business no matter what you call them.... so my personal belief is that it's a matter of time before the FTC tries to shut them down.

Now though, if you're a YTB travel agent, the travel industry may shut you down. Certainly that should be a major concern if anyone else follows in Royal Caribbean's foot steps. According to the Travel Daily News article, Marriot "and other major players" are participating in a new designation program that travel agents will have to meet to get cheaper travel. Having been on the Scam.com forum recently this has been developing over time, and the "benefit" of cheap travel to "fake" travel agents has already started to disappear.

So... whether YTB is able to continue without legal trouble from the FTC may not matter much longer if new recruits dry up when they learn they can't actually save on their personal travel. This will be especially bad if YTB is banned completely, even those who meet the criteria of the industry. My prediction... pain for YTB.

Now I call you a liar

I give up... Brad Morse is pushing his eBook again... another "update" email that ONLY talks about this Saturday's "special training" but only if you buy the $67 eBook "GetGoogleAdsFree" from Brad himself. He lists four things the training will include... and #4 is (get this) how you can get Google AdWords for free.

Here's a quote from the email:

"Number 4 above is the big one. You will learn how to get all your Google ads for free, how to make thousands just for getting free ads and how you can start making this money at no cost to you."

Please.... stop it, now you're flat out lying. He can NOT teach you how to get your ads for free. What he can explain to you is how you have to take out your credit card, buy thousands of dollars in Google AdWords trying to earn thousands of dollars from selling advertising. That is hard work, and requires money. It is NOT free!!!! Yet there he is in the above quote saying it is... all so he can get his greedy hands on your $67.

What am I missing? Is this not a blatant lie?

An E4L.biz prediction

I began writing the previous post (below) about GetGoogleAdwordsFree prior to seeing yesterday's E4L "update" email. I thought giving away the so-called "secrets" of the slimy misleading eBook was important... since anyone promoting slime is probably slime themselves. So after reading the E4L "update" email I was inspired to finish up the previous post... and now... I just have to share a prediction that all the E4L faithful can throw in my face in just a few short days if I'm wrong.

MY PREDICTION:

E4L will NOT have it's "grand opening" prior to Brad's "special training". In fact, the "grand opening" is probably weeks away (that's of course if it ever occurs).

This isn't a tough prediction to make... as some of the E4L'ers who read the "update" email are smart enough to realize Brad didn't actually promise the Grand Opening at all... at least not any time soon. But others of you will only have seen the "positive" side and think he did promise it, and miss what the "update" really is and isn't.

Let me explain... a "member update" email was sent yesterday with the "exciting" news that "we should have the website up by the end of the week or aleast the early part of next week."

Within this update, for the umpteenth time, Brad finds a new way to try to convince members to buy the GetGoogleAdsFree eBook for $67 from HIS affiliate link where he'll pocket $45 per sale. This clever pitch to buy the eBook dangles a tantalizing carrot in front of members.... Brad will be conducting an "exciting training" in which you're going to learn how to make "1,000 to 4,000 dollars in your first 30 days". Wow - that's certainly worth $67 - right???

Now, the training is scheduled for this Sunday... and, as I just pointed out, the web site is going to be up "by the end of the week" or "the early part of next week". So... first, I'll predict that the "website" won't even be up before Sunday.... but what's really easy to predict is that there will be no "meaningful" web site up this week before the training - what I mean by "meaningful" is one where you can actually buy entertainment products - or any physical product for that matter.

Brad's clever "update" is very vague, and makes exciting sounding promises about the "grand opening", so why not trust him with $67 so you can get in on the training. Afterall, it's about to launch - right???

I don't think so.... while the vague language may allow the excuse-mongers (you know, the "positive outlook" people who don't realize they're actually prescribing naivety, gullibility and ignorance while beating down people who ask too many questions) Brad does NOT actually promise the "grand opening" will happen any time soon at all. He says the "website" should be up by early next week... but the "website" could simply be the mock up of the home page posted on the E4L.biz URL. He could simply trade out one 1-page graphic for another. That's certainly not a "grand opening" is it?

The "update" email then goes on to say "Then we only have to tie the databases to the website." And that, I have to assume, is the database with actual products - right? Well how the hell long is that going to take? Isn't that what everyone has been waiting for? Not trainings, not "websites", not more vague "updates". Will there or won't there be ANY products for sale on the "website"???? (oops - sorry - I'm being a negative person - asking too many questions)

He then uses fancy terms like "advanced autoresponder" to make it all sound so good... but is it impressive that he's not using a non-advanced autoresponder? What is an "advanced" one anyway? Gee, let me guess... the one that costs $49 per month, not the one that costs $9.95 per month - right???

So... another non-update from what I can tell... no "real" promise was actually made... but yet another attempt at making money off of the members by finding a new way to promote a crappy ClickBank eBook. Yikes - how can you trust this guy when he keeps doing things like this... updates that aren't meaningful and attempts at earning more money from you????

For you folks who still believe in Brad, his "vision" and E4L.biz... and you REALLY want to sit in on his training this Sunday... here's my suggestion:

Go ahead and buy GetGoogleAdsFree from Brad's affiliate link (remember, he doesn't seem to care if you already own it - you have to buy it from him to attend the training - he also doesn't say you have to have read it - he just wants proof that you bought it from him). Then, after the training, "return" the eBook back to ClickBank for a full refund on Monday. You'll get to hear all the ideas that I wrote up in the post below... realize no magic $1,000 to $4,000 in 30 days bullet was shared, and you'll get your money back.

Then... when the "grand opening" becomes the new term (before we all thought "launch" actually meant launching... but no, we were then "in launch mode"... now we'll get the "website up" and I guess will be "in grand opening mode" waiting on the "grand opening") will there then be yet another newer term to take over for "grand opening" that we suckers will assume means an actual opening of a web site that really does sell Entertainment products????

Get Google Ads Free from the Masked Guru

Well Mr. Brad Morse of E4L.biz... the guy that can't get his "dream" launched, but does have the time to promote an eBook called "Get Google Ads Free" to the suckers who signed up into his MLM... "The Masked Guru" has chosen to review this eBook. The free newsletter from The Masked Guru reviews "guru" eBook's including "The Rich Jerk", "Day Job Killer", "Site Stealer", "Ultimate Wealth Package" AND "Get Google Ads Free". The Masked Guru's service is to review the eBook's so thoroughly that you are getting the majority of the key points and ideas being promoted. His belief seems to be that most of the Guru's are just re-hashing old ideas, and their main goal is to make money off of "suckers" who don't realize it's outdated, sometimes misleading, and occasionally totally worthless information.

It took The Masked Guru all of 2 newsletter emails, or "parts" to review Get Google Ads Free - which is an insult in and of itself since The Rich Jerk got an 11 "part" review, Day Job Killer got 10 "parts" and for the ones that aren't worth reviewing, only 1 "part" for Site Stealer, and only 2 "parts" for Ultimate Wealth Package... AND for Get Google Ads Free.

To open up his review of Get Google Ads Free he states "IMHO, this is the lamest, most misleading and downright untruthful ebook I've ever come across". WOW - and I just learned that Brad Morse of E4L is "conducting a special training call this Saturday" but ONLY those who he has verified have bought "Get Google Ads Free" from HIS AFFILIATE link will be allowed in this training. So if you've already paid $67 for what The Masked Guru calls the "most useless 'ebook' I've ever seen", and you haven't enriched Brad with another $45... you can't attend his training.

For those who want to save the $67.... and can't wait for weeks or "parts" of the other eBooks that The Masked Guru reviews first.... here's my review of his review.

First, I'd really like to skip the first 26 pages since Brad Morse says it doesn't get started until then... but one of my favorite parts is when The Masked Guru points on that the author's claim of getting $87 million in free advertising over a 16 year period is particularly stupid since Google is only a few years old, and the very first widely sold internet banner ads were sold by HotWire.com in late 1994... a mere 13 years ago. So... is the Get Google Ads Free already lying??? Clearly his claim has virtually nothing to do with Google which was founded 9 years ago and launched key word targeted ads 7 years ago.

The first 26 pages do reveal the "secret" which I've already exposed in another post... you BUY Adwords... yes - you BUY them - usually with a credit card just like everybody else. You send the clicks to a site that you have to create. You then must sell a LOT of advertising to cover the cost of yours ads, and earn yourself a profit. So... you don't get anything for free... so this is a misleading, lying piece of junk that Brad is trying to push on you. And if you are not successful in selling advertising, you can go broke very fast since Google makes everyone pay.... duh!

So, if the author of Get Google Ads Free really got $87 million in free ads, it means HE SPENT $87 million... AND then, if he profited, it meant he also SOLD MORE THAN $87 million of his own advertising. Really??? That's over $5 million per year on average every year for his 16 years... and he goes on to claim that he's paid Google (my words since he says he got the ads for free) over $12 million a year recently. Again... what you pay for, you have to sell plus more for a profit... if he really did sell more than $12 million in advertising online, then he's got a LOT of employees and a big company... trust me, I sold online advertising for a major company, and $12 million is a LOT of work to sell, manage, support, put up, etc, etc. I bet this is a minimum 5 person operation, and more likely 10 to 15 to pull off such a feat. It would also require highly paid advertising sales executives who travel to advertising agencies, and marketing directors at many, many companies. It also would require very professional sites... not crappy ones "noobs" would put up after learning this so-called get-rich quick technique.

Anyway... let's get to the section that Brad says is so good... from page 27 onward.

Page 27, according to The Masked Guru is the suggestion to write an article on a hot topic, drive traffic to it by paying for clicks via Google Adwords, and then selling ads to cover your costs. Page 28 is a claim that the author is making $2 million a year doing this. And page 29 suggests you install an Autoresponder to be able to follow up with anyone who signs up. Apparently through a bunch of these pages they have testimonials from people who swear they've used the system successfully. Unfortunately the testimonials use stock photos of people that you can find on the internet... which leads The Masked Guru to believe that they are "fake".

Page 31 suggests you create your own "get rich quick eBook". AH HAH!!!! I get it now... the only reason this eBook was created was to get rich by telling you to write your own eBook whose secret is that your readers create their own eBook too!!!

Pages 32 thru 40 are AdWords advice... which sound pretty lame since I happen to have quite a bit of AdWords experience... and what I've learned about AdWords is that the system is intuitive and easy to figure out for anyone with half a brain... you don't need a $67 eBook to learn how to use Google AdWords - especially since they have all kinds of free info on their site.

Next, recommendations to sell ads on your own newsletter to whoever subscribes to it, and then, once you think you've spammed them enough, you should try to rent or sell your subscriber list. If you love spam as much as I do, this suggestion has to make you want to puke.... but good ole Brad of E4L thinks this eBook is the be-all end-all of top-flight advice on how to get rich in 30 to 90 days.

The eBook goes on to make other simplistic suggestions like using link exchanges and posting on free classified ad sites to generate traffic (he doesn't mention that link exchanges will get you banned from Google AdSense - and that Google doesn't like "arbitrage" - the practice of buying Adwords clicks and trying to make the money back with Google AdSense).

Now into the 50's... the eBook recommends paying for advertising in MAJOR newspapers and magazines like USA Today and Entrepreneur Magazine (do you know how much these cost - if you don't sell enough ads, you will go bankrupt VERY fast).

The Masked Guru says he's fallen on the floor laughing after reading the eBook's "viral marketing" idea of building a page where you send your Google Adword clicks, put a funny video on it, add a "tell a friend" email feature and give away prizes to people who use the "tell a friend" feature.

Some people like the above idea... if you've got the expertise and bandwidth to pull it off... but it's not a new idea... you see suggestions like this on all of the "guru" forum sites. And I'm going to take a guess, and assume this will be on of Brad's proudest training tidbits... what a brilliant and new idea - NOT!

Finally, the eBook's last 25 pages are how to promote Get Google Ads Free... and here's a tip that The Masked Guru doesn't mention... I bet you can get 99% of this info by clicking on the free "Affiliates" tab at the GetGoogleAdsFree.com site... so once again, no need to pay $67 for information that is freely available. For more free information start visiting anyone of the Internet Marketing forums like warriorforum.com/forum and forums.digitalpoint.com and im4newbies.com/forum

And if you want a real MLM... pick one already in business... or if you want to be someone first in on a new launch... review the business plan, research the founders, check the financials, and analyze the pay plan... of course, if they don't have any of that available.... it's either a scam, or run by an amateur, or just a plain old bad idea once you do actually research it. You know who I'm talking about :)

E4L's competition

Oh, poor E4L - why do I pick on you? Well, it's so easy. Today I introduce you to your competition. You say people would be dumb to buy entertainment products (and apparently "wellness" products) from anyone else since your prices will be the lowest. Well... you've got a LOT of competition... so you will have to price so low that you have no profits for which to pay your MLM distributors... and here's a small sampling:

Let's start with one that looks a LOT like your idea:
netmarket.com Oh boy, become a member and you get cash back and the lowest prices. AND they have a 200% Low price guarantee... so if you, E4L, can undercut them, they will undercut you back. Ever hear about gas stations doing this to each other... eventually they stop the madness after realizing that being the low price leader might sell a lot of gas, but eventually they'll go out of business without margins and profits. So the "brilliant idea" and "dream" that Brad had has already been done.

Another... shopping online with MLM behind it... mypowermall.com

But of course... there are many more competitors... those who just sell entertainment products or help you find the cheapest prices on every possible product:

shopping.com
shopper.com
shop.com
buy.com
costco.com (ouch)
circuitcity.com
buydig.com
jr.com
amazon.com (ouch again)
pcconnection.com
tigerdirect.com
macmall.com
abesofmaine.com
eBay.com (triple ouch)
lcdTVs.com
bestbuyplasma.com
electroniqueplus.com
bestbuybusiness.com
moviesunlimited.com
dvdempire.com
movies.go.com
WholesaleDVDsForLess.com
shopping.yahoo.com (this is getting ridiculous)
ColumbiaHouse.com (oh my, what about the mail order guys who are now online?)
www.deepdiscount.com
Half.com
www.YourDvdMovies.net
BigScreensForSale.com
Ebates.com
GadgetCity.com
Overstock.com
nextag.com
Shopzilla.com
walmart.com (please STOP IT - how can you compete on price with these guys?????)
dealtime.com
target.com (just another small player)


OK - I think you get the point... the list goes on and on. Not only that, but these companies hired programmers to build sites that offer online shopping... and I doubt it took them over a year to build. Hire competent programmers with experience building any of the above sites, show them your favorite site, put them in touch with your wholesalers who deliver the database feed... and sit back and wait for "real" updates... where they show you their progress, and I bet within 2 months they'd be done.

What exactly makes E4L a "dream" of an idea? The jury is still out about whether or not there is a legitimate attempt at launching their site... but for me, the verdict is in on the business concept... it's stupid... and I'm stupid for not doing a quick search earlier to discover just how many competitors E4L has... the above list is probably one-tenth of the competition... so I just don't see how consumers will get excited when E4L.biz enters this crowded market - do you?????

Direct Sales article from ABC News

Direct Sales & Network Marketing are hitting the mainstream more and more... they seem poised to explode where everyone will either be doing it, or know someone who is. For those interested in a basic explanation of the highlights and low lights of the industry and the work, this ABC News.com article is very informative and well rounded.

Direct Sales is still sales... and those who fail tend to only hear the catch phrases that give the industry such a bad name... like "anyone can do it", "it's easy", "no selling involved", etc. For the most part it's simple... as in it's not rocket science... but to say it's "easy" is not true for people who aren't prepared for rejection and objections. Look at the first comment under my Sumner Redstone article... the "objection" is vague and weird, and if you don't know how to handle people who just shut down, you can't succeed in Network Marketing.

The good news... the industry is getting more and more mainstream recognition which should ease some of the objections to the industry as a whole. The bad news... you've got to work it like a business... read the ABC article for more on what that means. In addition... with really bad examples like E4L, the industry will continue to suffer from image problems... and unfortunately there are definitely more bad examples than there are good ones.

Kevin Trudeau - another lie from a born liar/scammer

After buying Kevin Trudeau's "Natural Cures 'They' Don't Want You to Know About" book after watching his infomercial, I fully expected a book about Natural Cures. Instead it was a rant against the FDA and the FTC saying he wasn't allowed to share "natural cures" because it was against the law. From that point on I've considered Kevin Trudeau to be a liar and a scam artist. After all, why didn't he called the book "Why 'They' Won't Let Me Tell You About Natural Cures". Don't spend an hour long infomercial promising all kinds of interesting "cures" and then deliver NONE.

So today's news that the FTC is charging Kevin Trudeau for violating a court order for misrepresenting his latest book... one for weight loss... is happy, happy news for me. I think this guy ought to get locked up for life. I detest Kevin Trudeau so much that I have to flip the channel immediately if I see him pitching something, and I certainly won't buy anything of his ever again. So I can't provide a book review here, but the FTC says it all:

During the ads, Trudeau claims that the weight loss plan outlined in the book is easy to do, can be done at home, and ultimately allows readers to eat whatever they want. However, when consumers purchase the book, they find it describes a complex, grueling plan that requires severe dieting, daily injections of a prescription drug that consumers cannot easily get, and lifelong dietary restrictions.

While the new charge isn't a surprise, what I didn't realize is that Trudeau has a long history as a con artist, thief and scammer. In 1991 he spent 2 years in prison for falsifying credit card transactions, he was cited in 1996 for questionable marketing practices, in 1998 the FTC had similar false advertising claims as today's, and in 2004 he made false claims about Coral Calcium and was ordered to pay $2 million.

Please, please, please... never, ever buy anything that Kevin Trudeau is associated with. I agree with a handful of his views... but I'm not sure he believes in his own views... unless of course he can make a buck (or millions of bucks).

E4L - Stupid or a scam?

E4L.biz really confuses me... 9 out of 10 things make it look like a scam... it usually looks like the owner is trying to make as much money as possible and then skip town. The 1 thing that makes you think he's actually trying to launch a business is that he hasn't skipped town, and puts out tiny little - near meaningless - carrots for the faithful to latch onto.

So let's take another look at the virtual non-update update on this "entertainment for less" business that was supposed to launch on August 1st (44 days late now).

So far this is what is still missing:

1. There is no published pay plan. It would appear, that IF they really are going to launch, that they will do so with no specifics on how anyone will earn any money. In the most recent conference call with "Brad" the owner, he said consumers would get paid just for signing up, and get paid a lot for referring friends and family. But how will they decide what to pay since there is no pay plan? And don't get me started on the fact that selling at prices so low that people will be "amazed" means there is no profit to share... nothing to pay out. You can read my old posts for that rant.

2. They say they will attract an enormous amount of customers via advertising. Well... let's see the ads. "Brad" shared mock ups of the new web site's logo and front page. So what kind of advertising? Where will they advertise? How much money will they spend on advertising? Have they hired an Advertising Agency for placement, creative, etc?

3. Where is the money coming from for this major advertising campaign? I recall hearing something about "Brad" having deep pockets or self-funding. Well, if that's true,that's probably why this is all so badly run. Afterall, that means he didn't have to present a business plan to a bank, or investors, or a VC. It also means he can keep getting away with stupid ideas and missed deadlines since no one else's money (if there really is any money) being put on the line

4. The business is called "entertainment for less" but "Brad" repeated for the umpteenth time that he's got a hankering for launching "wellness" products first. According to him "wellness" products are best because they are "perishable" (so you have to keep buying them, whereas you don't need to keep buying DVD's or TV's) and because it's the "fastest growing industry". Sounds to me like he screwed up... calling his business "entertainment for less" when he now really wants to be in "the best industry".... in wellness.

5. Why is it that the single biggest update that has been touted for several weeks now is the scam eBook "Google Adwords for Free". If "Brad" were such a nice guy why wouldn't he just tell you that you can NOT get free Adwords, and tell you what exactly is so great about the eBook. Hopefully the faithful E4L followers aren't as dumb as he seems to think they are, and they realize that if they buy the eBook Brad makes money off of them. If Brad were sincere, wouldn't he suggest they buy the eBook from each other instead of just from him? Or do as the Masked Guru does and review the book sharing the "secrets"?

6. They missed their August 1st launch date, today is September 13th, and the only time frame you hear out of "Brad's" mouth now is "soon" and "before Christmas". Why can't he be more specific? The message boards have one idiot excusing the lack of details as a good thing - huh? How can no details about any important be good?

7. The exciting update at their August convention was showcasing the new Back Office. The old one is from MLM Software Pro and is crappy. I laughed my a** off when someone exclaimed that his previous MLM company used the EXACT SAME Back Office as the one Brad rolled out at the convention. So he's got yet another cookie cutter back office... which made me thing... if it's another off the shelf product... why did it take so long to roll out???? It just wreaks of scam.

8. I have to say that Brad just sounds dumb. He says things like "so that's that there" when he completes a thought. Usually when people sound dumb, they are dumb. So if this is not a scam... well, I've already made up my mind that it is definitely STUPID!!! It's a bad idea - no margins, competing in a market dominated by the likes of Amazon and Best Buy, no business plan to be seen, virtually no employees, no evidence of any real financing, the reliance on scam eBook's as advice for starting an internet business - and the founder/owner sounding like he never got out of 3rd grade.

9. The final "scam" feeling thing is their censorship of their Forum - erasing entire threads, erasing all negative comments in other threads while retaining the positive ones, kicking off members he didn't like, etc. With virtually no details on anything... from the pay plan, to the ad budget or plan, to the launch date... they are going to have criticism. If it's not a scam it's really easy to start explaining with DETAILS. So if they really are going to launch (some day over the rainbow way up high) it's seems guaranteed to be terribly executed with numerous dumb mistakes.

And drum roll please.... for #10... the one thing that makes E4L not look like a scam....

10. Brad is still in town, still holding conference calls, showing itsy, bitsy progression with his new cookie cutter back office and his web site designs.

Brad's "promise" now is that the launch will be in plenty of time for the Christmas rush. That should be, at the very latest date, the day after Thanksgiving.... Friday November 23rd. Of course if they've done no advertising prior to that, they won't sell much of anything. So they'd better launch no later than mid-October - one more month - can he do that?????

Brad - you've got 1 to 2 months. I'm sure "hartan" will stick it out until the end with you.

Oh... and by the way... as for as legal or illegal... it's illegal to pay for membership signups - I believe the "VIP" club payments have been the way E4L'ers have made money in the past year... if so... they've been running an illegal operation for a year. Yes... definitely STUPID!

Get Google Leads Free EXPOSED

Read a so-called review of Get Google Leads Free or Get Google Adwords Free and there is probably a 99% chance the review was written by an "affiliate". The reason I believe this is that the GetGoogleLeadsFree.com web site has an "affiliate" page that includes suggested "reviews", articles, blog posts, ads and more. So if you find a review on another site, compare it to the "affiliates" page at GetGoogleLeadsFree. The affiliate page is very interesting and I suspect about 90% of the eBook's content can be found within the suggestions found on this free page.

The affiliate page is:
http://www.getgoogleadsfree.com/affiliates.html

Now, to kill the surprise - the Ads a NOT free. You have to pay for them. The so-called "secret" is that you use Google Adwords to drive traffic to your web site and "monetize" your site with your own advertising and/or via selling affiliate products. Of course the product they want you to sell is the very eBook they want you to buy. See my previous post for more on this concept.

So... you can't get Adwords for free, but if you are web savvy and can build a web site, drive a lot of traffic to it, and "monetize" that traffic and make more than you are spending... that's the so called "secret". Does anyone call that free??? I don't. I call spending money on Google Adwords "advertising costs". Every business advertises with the goal of making more than they spend - duh. So do they consider their advertising "free" when they are successful? No, that's just stupid. And if you tell people your advertising is free simply because you made more than you spent - are you a liar? Yeah, that's what this eBook's "pitch page" seems to be doing... lying!!!

So what are you likely to learn in the eBook other than this non-secret? Well again, my suggestion is to visit their "affiliate" link... it seems to give all of their "secrets" to driving traffic and selling their eBook. And if the eBook does have any other information that can't be found on the free affiliate page... then just visit the "forums" that they recommend you advertise/post/link on... at the forums you'll probably find all of the "expertise" or advice you need... as well as reviews of GetGoogleLeadsFree. And when the reviews are glowing... chances are it's an affiliate who took the advice of the affiliate page.

The Masked Guru, The RichJerk & Affiliate Marketing

If you're really skeptical, then you think anyone trying to make money in almost any way is a scam artist. On my most skeptical days I think every product promoted via ClickBank is a scam. They all have the same type of "pitch pages", they are all eBooks, and they all seem to sell for $27, $47 or $97 (what ever happened to ending in a 9?), and everyone promoting them is an "affiliate"... which is someone trying to make a buck by promoting someone else's products. One of the biggest sub-categories is for eBooks that teach you how to get rich being an affiliate... and what they all seem to teach you is how to be an affiliate for the very eBook you just bought and are reading.

Did you get that??? Buy my eBook to learn how to re-sell my eBook... and if you are really smart, you can learn how to write an eBook that teaches others how to write eBooks that promote the selling of that very eBook... and all of these get sold via ClickBank.

TheRichJerk.com appears to be this first version... buy my eBook and I'll throw in a web site that will help you sell my eBook.

These days you see less and less of "TheRichJerk" but now there's "TheRichDude.com"... funny though that it goes to a site called "TheRichPrince.com" and the URL doesn't have either one in it... at least the one I found was "dotdothost.com". This site "reviews" (and I use that term loosely - hence the quotes) other eBooks... and surprise, surprise, he is promoting 2 eBooks. He claims that he was scammed many times over by bad eBooks, and after 39 attempts found the 2 that are not scams. And guess what... one "TheUltimateWealthPackage" is sold via ClickBank... and the other is sold via another affiliate program.

Now... do you believe he really read and tried 39 eBooks... and that he really believes in these two???? Since he gives one a 99% rating, and the other a 97% rating... and claims the other 37 aren't even worth mentioning... I choose to NOT believe him. How could 37 be so bad, and 2 so good? I'm not buying... literally.

There are a LOT of variations of the supposed "real review" that aren't real at all. For example, since one of the biggest recommendations in all of these eBooks is to promote your site (the one promoting the affiliate links) by writing articles... most of these eBooks recommend you write lots and lots of articles about your "niche" (aka the affiliate product you are promoting), and post them on free article submitting sites like ezinearticles.com. So watch out when an overly positive review is posted on that site... and watch out for any "review" site that can't seem to say a negative thing about any product... or don't allow comments so actual buyers can say what they really fee.

Now we get to TheMaskedGuru.com. I actually like his little trick because he does provide value, it's free to sign up, and he promotes his two affiliates (so far) in a more "real world" way.

TheMaskedGuru says he's read the other "gurus" eBooks and he's going to "blow the lid" off them. Funny enough, one of the three he is promoting is "TheUltimateWealthPackage"... so you don't have to buy it from "TheRichDude" since "TheMaskedGuru" will review it so thoroughly that you are essentially getting the content for free.

I signed up for TheMaskedGuru... and over about a 10 day period I got TheRichJerk review... a very thorough one... so thorough that now I don't feel the need to waste my money on it. And what little value is does have, I know now about. This week I'm getting his "DayJobKiller" review via email... one part at a time. So I assume next week I'll start getting "TheUltimateWealthPackage" review.

Now... what I really wanted was The Ultimate Wealth Package review... so The Masked Guru is pretty clever. He gets to promote whatever HE is an affiliate of for 3 weeks straight while I read his reviews. And what's The Masked Guru an affiliate of??? So far it only appears to be for a web hosting service, and an autoresponder service. But since TheMaskedGuru is actually doing "real" reviews... and TheRichJerk one was NOT flattering... I feel like I got valuable information for free (albeit a little slow) and I am much more apt to trust The Masked Guru's recommendation of the web hosting company (when I finally get off this free Blogger service) and the autoresponder (when I finally get serious about building a list :)

So... are they ALL scams... well... if it smells like a duck, quacks like a duck, and craps all over your lawn... then you're more apt to think it's a duck. If it actually delivers what it promises... and then promotes something... I don't mind.

Monavie fans: Bill Clinton, Wolfgang Puck and more

The only "comment" to my request for which companies to review as "scams" or "legit" was for "Monavie", a fruit juice MLM.

Today CNN Money.com featured a story about the controller and former CEO of Viacom, Sumner Redstone, drinking Monavie and calling it a "miracle drug". Unlike wild claims from MLM distributors, when a guy worth $8 Billion dollars and who isn't an investor in the company makes a statement like that, it makes you stand up and take notice.

Mr. Redstone apparently has turned Bill Clinton, Michael Milken and Wolfgang Puck (and interesting trio) into fans of the fruit juice according to the CNN Money article.

Monavie is similar to Noni, Xango and Goji in that it is a fruit juice sold via MLM, however, Monavie is the newest of these names, and is the only one of the three that bases it's drink on newest health craze, the Acai Berry. While Monavie is a private company, they apparently have over 500,000 distributors after just 2.5 years. That's a shockingly large number in such a short period of time.

One reason is probably the "no" answers you get when I ask the 6 basic "legit" or "scam" questions of any MLM which are:

1. does it require you to buy "business centers"? ($39 distributor fee - and you can't buy extra "spots" or business centers)
2. does it pay you if you sign up a distributor? (no commissions paid on the $39)
3. does it require you to buy marketing web sites? (no)
4. does it require you to pay for training or motivational material? (no)
5. does it require large up front inventory purchases? (no)
6. do they force you to cancel in writing or over the phone? (no)

With 84 year old Billionaires calling it a "miracle", and a very easy business to enter or exit... the only problem Monavie could run into is if it's distributors make claims like Mr. Redstones. Calling it a "drug" or making product claims will definitely get them in trouble with the FTC and FDA... just ask Mannatech whose distributors got caught on tape in a June 1st 20/20 investigation, has a class action suit against them from 2005, and in July of this year the Texas Attorney General began a suit against Mannatech for "operating an illegal pyramid scheme" and "making false product claims".

MonaVie's founder Dallin Larsen is also quoted in the article and definitely distances himself from Mr. Redstone's "miracle drug" statement... but that's still where nutritional MLM's get into the most trouble.

Real Estate gurus

I looked up Dean Graziosi.... I guess he's an infomercial guy. I don't see many infomercials, but tend to lump all of them into the "scam" file... and when it's about real estate it gets dumped in there pretty fast.

If you want to learn how to buy pre-foreclosures homes... and YES... this can be a huge (but hard) business, I highly recommend the woman at www.ForecloureS.com. She sells a CD course for $400 or $500 and an in-person boot camp for close to $2,000. These may sound expensive, but many of the other gurus lure you in with lower up front costs, and then start trying to get you to buy $5,000 to $20,000 boot camps. What I like about Foreclosures.com is that she doesn't over-hype her courses, or tell you that it's easy.

So... without knowing much about Dean Graziosi... you can take him, Carlton Sheets, just about every guru at the "Real Estate Wealth Expo", plus other infomercial guys like Don Dupree, Kevin Trudeau and a whole host of others and toss them in the trash.

And I'll give you the Foreclosures.com course in a nut shell... you have to "help" 10 homeowners try to fix their problem, and hope 1 to 2 end up needing your cash in exchange for their deed. But you won't buy unless there's a 30% profit margin less your renovation expenses. Her "try to help first" approach keeps you out of the sleaze pile, and gets "thanks you's" rather than law suits.

Her unique way of busting through the noise (when a homeowner gets a "Notice of Default" the entire foreclosure world descends upon them) she suggests you call neighbors, family, friends (finding them through internet searches) and ask how the Notice of Default person is doing. This gives you inside information, and you can then call the homeowner in trouble and say you were "just speaking to so-and-so and they thought you could use my help".

This gives you a "trust factor" that the impersonal letters and post cards that every other guru recommends can't touch. Then you need to maintain trust by actually trying to help them work through their problem WITHOUT you buying it until it's obvious that they have no other solution. And boom... you are the one they trust, so you are the one they sell their home to.

So is Dean Graziosi a scammer... without having read his stuff... what I can tell you is that there is no new information out there... and I personally would not trust anyone hawking their books or courses on late night TV.

Which "opportunity" are you curious about?

Checking my web traffic stats people have found their way to this blog looking for a few "opportunities" that I haven't written about including:

"inlinetrader"
"bowtrol"
"dean graziosi"
"quixtar" as well as "amway"
"topmodeapurses.com"
"free laptop offer"
"the richjerk.com"

I'm familiar with a few of these... but not all. If you're interested in my take on any of the above... or have another MLM or "opportunity" you're not sure about... post a comment and I'm look at whatever seems to generate the most interest.

YTB update

Pardon the delay in relaying Len Clement's "MarketWave Alert #86" regarding YTB. I can't seem to find a recent archive of his alerts on his site (a May 2004 Quixtar alert in the most recent in his archive section), so if you're interested in everything he has to say in each alert, then I strongly suggest you subscribe to the Alert newsletter as I do... it's free... and it only comes out sporadically. So far he's not one to spam.

As for his update, apparently YTB's attorney Ted Lindauer responded to his initial MarketWave alert about the company in which Len Clement described an investigation of one of YTB's top distributors, Rick & Brenda Ricketts, by the Florida Attorney General. In essense Mr. Lindauer stated "...the product... is a business opportunity".

Ahh yes... sounds like Burnlounge to me. The product can't be the business opportunity... or the store, or the web site that markets the opportunity... it has to be a product or a service... at least that's my layman's understanding of the law.

Now, here is where the MarketWave Alert gets a little unclear... or maybe I'm just overly suspicious of everything... but I take things literally...

Mr. Lindauer apparently also wrote to Len Clement that the Florida AG investigation was in 2006 and that they had dropped the investigation as of November. Len Clement goes on to say that he contacted a Florida AG "spokesperson" who stated that the FL AG did NOT have any meetings with YTB "in November".

Now maybe I'm being too literal here, but the unnamed spokesperson didn't deny meetings prior to November, or deny that the investigation had been dropped. Len Clement correctly points out that the investigative "notice" still sits on the Florida AG web site... but it wouldn't be the first time an old notice was left on a web site. Then again, if you look at the blue bar just above the description of the investigation, it does say "Active Public Consumer-Related investigation". So if the investigation really has been dropped... and Mr. Lindauer is worth the piece of paper his license is printed on, he'd get "Active" taken out or even the entire notice removed.

The bottom line for me is that when I was first introduced to YTB it looked, acted and smelled much like Burnlounge's stores... and while Burnlounge never admitted wrong doing, they pulled the plug on their MLM model. So since it appears that the majority of the money made by anyone in YTB is made when they sell a "business opportunity" and NOT when they sell travel, it looks like an illegal pyramid scam to me... and right now it appears the Florida Attorney General's investigation of RickettsTravel.com is still "active".

"Comments" Now Open for Business

Apparently the "comments" sections here was in "pre-launch" as the feature had been accidentally locked. So now everyone is free to comment away.

I discovered the "comments" mistake on the E4L Forum... the folks there have called me out on several things... funny too that one even called me a "wimp" for not revealing my identity. Duh - if the E4L censorship team finds out who I am they'll ban me from the Forum - which I can currently get into without a problem BECAUSE they don't know who I am.

As for why write a blog? Notice first that E4L isn't the only company discussed here. It sounds like a lot of good people have been sucked into a bad idea over at E4L. On a "Lunch with Lorna" E4L call they had a guest speaker... he's got a huge 1200 person downline in E4L. He freely admits that he's never had any internet opportunity luck stating that he's been sucked into many scams, good ideas with bad management, as well as into companies with bad ideas. It's weird that anyone would trust this guys' judgement since his batting average is ZERO in choosing companies... he obviously hasn't learned from his numerous mistakes... and that's pretty much WHY I would write a blog... the bottom line is that there are MORE scams, more good ideas with bad management, and more bad ideas that people make the mistake of thinking they are good ideas... than there are good ideas, with good management, that are legitimate businesses. I'd like to expose all of the bad ones because they give the entire MLM industry a bad name.

E4L is definitely one of the "bad" three (scam, good idea but bad mgt, or bad idea)... in fact it looks worse... it might be a scam... and it appears to be BOTH a "bad idea" with "bad management".

Since it looks, smells and acts like a scam, even if it turns out not to be one... that OBVIOUSLY means it's bad management. By the way - bad management never produces a successful company... please give me examples of bad mgt and successful companies... comments are open for that - lol.

So the final question is whether or not it's a good idea.

To me... it's obviously a bad idea. You can't make millionaires out of anyone but the founder when there are near-zero margins. Try to undercut a low margin industry... and then promise to share in the minimal profits... there is next to nothing to share - so how can anyone make any money? The biggest knock against MLM's are that only those at the top make any money. To combat that you need very large margins to be able to have the ability to enrich as many people as possible. With no margins, and virtually no one making any money, no one will promote E4L the way they do with high-margin MLM's.

Along these lines is the dumbest of the dumb ideas in E4L which is the belief that a customer who gets a surprise check will be so ecstatic that they'll try to get all their friends to buy from E4L. My question is - WHAT CHECKS when there are no margins? A check for 10 cents... 50 cents... a buck? Even if it were a $50 check on a $2,000 purchase... who does that excite? I can get that on my Discover card, yet I don't excitedly tell all my friends to go out and get their own card.

There are no margins... repeat that to yourself at the end of every statement you could possibly make in support of the E4L idea... without margins... no one can get rich... without margins... no one can get rich... without margins... no one can get rich... without margins... no one can get rich... without margins... no one can get rich... without margins... no one can get rich... without margins... no one can get rich

More "proof" in my mind that it's bad management with a possibility of an outright scam...

1. this week is 3 weeks from my first E4L post when I said I'd make my final call - whether it's a "scam" or "legit". This week they should have a functioning site selling "Entertainment for Less" products - so far nothing is up. Why?

2. this week they are having a conference in Las Vegas at the ultra luxury Excalibur (NOT - my 2nd least favorite on-the-strip hotel there after Circus Circus). What are they going to talk about? Well, every online conference they talk about "dreams" and promises... can an in-person conference be any different?

2. Brad has listed a "cool" eBook in the back office - it's a ClickBank Affiliate link to "GetGoogleAdsFree.com" which has been called out as more or less another worthless eBook... basically it suggests you buy Google Adwords... and send the clicks to a page where you sell more expensive ads. So the ads you sell pay for the ones you buy... plus a profit. Save your $67 - and tell Brad he's making himself look dumb at best... and at worst, he looks like a con man about to leave the country with your money when he's trying to make more money off of you on worthless junk.

The eBook costs $67... and the Affiliate payment Brad will collect is 75% or $50.25. Don't trust me? Read this forum for other's opinions on the eBook.

So... Brad - the self-proclaimed Internet expert since 1994 who wants to teach E4L VIP members how to make $10,000 to $100,000 per month within 6 months... is selling crappy ClickBank products - but nothing else so far (well, VIP memberships and the ability to purchase future customers). Can he do ANYTHING that doesn't appear extremely suspicious????

For those on the E4L forum who want me to "offer solutions"... one idea...GET OUT... find a legitimate opportunity that is already in business, who have a known and trusted management team... and WHO HAVE A PAY PLAN.

Most MLM's fail in their first year or two... it appears this one is a still-born. When the supposed launch is so poorly done - what will it be like when (or if) they do launch.

But here's another "solution"... since you and I can't solve the E4L problem... you can ASK QUESTIONS. Ask for details... ask for the business plan (a business plan was written - right?). Ask to see the bank account and books. Weren't they stating that they would be doing national TV advertising? If so, ask to see the ad mock ups. Ask what Ad Agency was hired to do the work - not just to create the ads, but to place the spots. Ask very specific follow up questions whenever another promise is made (see my HotConference post for what I mean about "details"). You see... there is no solution if this is a scam... the only solution is for you to find out NOW before wasting more time and money. If it's not a scam... and Brad is just a nice guy who has no idea how to launch or operate a business... then there isn't a solution for you and I either... his business will fail, and we'll have nothing to show for it.

Finally - one Forum poster commented on my comment that if E4L became as successful as Amazon.com, the top 1,000 in E4L would be earning $300,000 a year... or some nonsense number.

FIRST - you have to become as successful as Amazon.com. Do you really think there is even the remotest chance of that happening????

Is a 5-person team that can't even launch a simple reseller site going to do what thousands of other companies have tried to do in becoming as successful as Amazon.com? Not even in your wildest dreams will this come true. And UNBELIEVABLE success would be one-tenth of Amazon's or $1.2 BILLION in revenue (also NEVER going to happen) and $30,000 per year for the top 1000 in E4L.

$30,000 for the top 1,000 would be an absolute miracle... even $1.2 million and $3,000 for the top 1,000 would be a major surprise to me.

I don't blame you folks for getting sucked into this one... it happened to lots of people during the Dot Com boom... the sock puppet and it's Super Bowl ads had everyone believing selling online pet food and supplies was a brilliant idea... so you've been sucked in too. But now you've been warned. It's a bad idea with bad management at best... and it might be worse... to date it looks, smells and acts like a scam... by the end of this week... if they still haven't launched... will you still believe it's not one?????

HotConference.com vs. E4L

I logged into HotConference.com's "members only" call today... and it struck me as I listened to the founder Joel Therien what is so wrong with E4L.biz. I don't know a ton about HotConference's business, but there are clearly members with questions... one came up about a new product Joel had promised and when it would be launched. Joel responded with the name of the company he was working with, the date and time of his next meeting, and the names of the people he was meeting with. In other words... DETAILS... VERY SPECIFIC DETAILS.

When similar questions are posted by Members to Brad Morse of E4L the answers are vague... VERY VAGUE. You hear "next week" or "soon". He never tells you the names of the companies he's negotiating with... or anything else specific.

Joel Therien also stated today "I suck as a manager" and explained how he brought his sister into the business who has a corporate background. Now I haven't checked into this business enough to know what the issues are... but they have a functioning business (unlike E4L's non-stop "pre-launch" and now "in-launch" whatever that means) and Joel has a blog with videos of himself outside his home. So EVERYONE can track the guy down. Does anyone know who Brad Morse is or where he lives or anything else personal about him???? In addition... if you Google Joel you get a ton of results. If you Google Brad... you get nothing. So you tell me... if E4L is not a scam... then it's a really poorly run "in-launch" business.

For those wondering about HotConference... it's online conferencing with built in VOIP. That way you can host an online meeting, show your desktop or surf the web live... AND have a conversation without having to use the phone. Since not everyone has a computer microphone I also suggest FreeConferenceCall.com as a back up... everyone pays for a toll call... but there are no set up fees or monthly charges... it's 100% free if you're using extra cell minutes like I do.

You can try out virtually every online conferencing service via free trials... the only thing that E4L seems to have done is to use HotConference which I've decided is my favorite.

E4L update - or lack of one

I listened in on a call that "founder" Brad Morse hosted where I expected to hear an update about when the E4L.biz web site and business would officially launch. Their original date was August 1st... the call was August 11th. In summary... there was ZERO info on when E4L will launch... and yet another "carrot" dangled in front of the starving (for news, a business and money) members.

To recap before delving into this farce of a call.... the business concept is to offer below-market prices on "entertainment" products (e for "entertainment", 4L is "for less"). Despite the fact that Frys.com and Amazon.com among others sell TV's and DVD's online already, they've made this a "dream" of a new idea by offering an "affiliate" or Network Marketing pay plan. Now... there is NO published pay plan... but despite this fact, at least 70,000 people have signed up into the system... all "pre-launch". When complainers littered their members only forum after they missed the August 1st launch, they deleted all negative posts (don't you love censorship - NOT) and apparently even banned people from the forum.

So.. back to the "update" call. Once again Brad said "soon" and "by next week" which he's said in past weeks... all with no results. That is it for the update. Instead he offered another monetary and opportunity carrot... he claims that he's been in internet marketing since 1994... and that he threw thousands of dollars at some experts in internet marketing to share their "real secrets" rather than the crappy eBooks that they all sell... and he's going to train 5 "VIP" members (you had to pay $20 to be a VIP member during "pre-launch") on his system so that he could use that time to develop his tools and gain testimonials. The carrot is that he claims he's going to teach those 5 how to make between $10,000 and $100,000 PER MONTH within 6 months.

OH MY THE EXCITEMENT.... and slight of hand... watch the new carrot in the left hand so that you don't notice that E4L.biz is still not up in the other hand.

For you E4L zealots... I took a look at Amazon.com's financials. Their profit margin is 2.51%. On over $12 BILLION in revenue, that's $300 million in profits. Lets say E4L somehow becomes as big as Amazon... with 70,000 "affiliates" already... that means you'll make $4,300 per year if they share 100% of their profits. Which they won't... maybe they'll share 50% (a typical MLM number) so you'll make $2,150 per year. And that's if E4L can match Amazon... which... no matter how zealous you are... you can't believe they'll get any where near that large - right??? So let's say E4L is a HUGE success and becomes a $1 billion company with 2.51% profit margins... and you... an pre-launch member... averages $215 per year in revenues... woop dee doo!!!!

The reason why the zealots love the "Brad's dream" is because they say people will buy from E4L and get a commission check... which will excite them... and so they will in turn refer others... all into the downlines of the original 70,000. But again, using Amazon's 2.51% profit margin... what checks will these customers get that will so excite them? They'd have to buy a $2,000 TV just to make $50. And on DVD's... if you buy a $12 DVD... you get a 30 cent check????

WHO IS GOING TO GET EXCITED ABOUT THIS????

My problem with all of this is two-fold - the idea seems dumb... and second is that this Brad Morse dude keeps missing date after date, and promise after promise, and he has two solutions for this.... the first is to ban complainers (ie censorship) and the second is to make a new, and totally unrelated promise. The zealots latch onto the next "dream" and stick around longer, and longer, and longer.

What I say to them now is... if he can't launch one "dream"... WHY would you think he could successfully launch another one? What will he teach you in this training program???? How to make money off of unfilled promises????

This one scares me... stay tuned... by the end of August... if they don't launch, I think even the zealots will finally pour the extra large servings of coolaide down the drain.

A "pro" MLM arguement

There are the overly zealous arguers for MLM's (pro-MLM), and there are those overly zealous againts MLM's (anti-MLM).

One person who holds himself out as "pro" but not overly zealous is Len Clement. His site MarketWaveInc.com is interesting... but I find his explanation of his position even more so. Read his zealtots article here.

For anyone pro or con... I think it's important reading. If you're "pro", Len Clement states that he's been successful enough to "get out of the rat race" but that he's never once done many of the things most MLM distributors do... like "flash checks" or what got Amway/Quixar in trouble with the FTC many years ago by selling "training or tools for a profit". And you ought to take this to heart... and tone down those things that give the MLM industry a bad name... especially the ones that are illegal.

If you're "con" maybe you'll decide that it's not the industry... but rather the bad apples. If concentration of wealth at the top is a problem... would you rather have communism or socialism? Or would you rather try to figure out how to improve capitalism in our democratic nation? I hope the latter.

I've got E4l and YTB updates coming... sorry for the delay... in E4L.biz's case, no news isn't good news in my mind. In YTB's case... Len Clement has an update that I'll be reporting on shortly.

USANA - scam or not?

There's an all out war against USANA by Barry Minkow... an ex con whose story would make a heck of a movie or book from what I read about him at en.Wikipedia.com. The scams he pulled to keep a fraudlent carpet cleaning business afloat are nearly as funny as they are devious and unscrupulous. Mr. Minkow even had ties to the Genovese crime family... and even worse in my mind are ties with white separatists. He now says through his time in prison, adoption of Christianity, and earning degrees in religion, he has completed a personal transformation, and now battles fraud.

Now what I haven't found in my research is why Minkow has chosen to pick on USANA vs. the hundreds of other MLM's and the handful of publicly traded ones?

What seems apparent though is that Barry Minkow is a master at manipulation of facts, figures and concepts. This post would have to be several pages long to go through each of his USANA accusations... and I won't do that because as I've checked out his YouTube videos, and his "FDI" site (boy does that sound like FBI... and thus my feeling that he manipulates sounds too to create the right effect... as in "they're being investigated by the FDI" could be mis-understood, and indeed there was a Forbes article saying USANA was being investigated by the FBI... which appears to NOT be true - yikes) because it appears Mr. Minkow's attacks on USANA are attacks on the MLM industry in general with only one of two specifics of USANA's pay structure.

So... I'm going to call USANA - "legit". While I don't like the idea of selling multiple business centers to people who don't even know if they can build one, as USANA apparently does, their overall structure and pay plan is technically legal.

Now if you are anti-MLM, then you would be on Barry Minkow's side. If you believe that there are good applications of the Network Marketing model (which I believe - it's just that there are many more that are poor applications at best, or outright scams at worst), then this one takes further investigation. The bottom line is that as a publically traded company, USANA is one of the most scrutinized MLM's in the world. So if you are an MLM supporter.... Barry Minkow is not the guy you want poking around your MLM, because he'll find everything wrong with it since he finds everything about MLM's to be wrong.

For one take on whether or not MLM's are all illegal, or whether some are legit check out this post. One example is Barry Minkow's statement that the top 3% of USANA make 87% of commissions. Well, this isn't far off from the U.S. distribution of wealth... the top 1% have about 33%... and the bottom 80% has only 18%. I also have two additional problems with the USANA numbers:

1. MLM's attract and lose a lot of new distributors... a high percentage of people who have no business trying to start a business. Network Marketing sounds easy... it turns out to be hard... those who would have succeeded in other businesses too are most likely to rise to the top... top 3% in this instance

2. Customers are often counted as distributors. When an MLM offers a distributor fee to get access to "wholesale prices" you'll get people who just want to buy the product for cheaper counted among the "failing" distributors.

For USANA... I don't know the company well... but I'm calling this one legit... with a few things about the pay plan that I don't like. Barry Minkow... he's a heck of a sales guy... I'll give him that.

Is it illegal when it's not unique?

I've run across "GDI" or Global Domains International a couple of times. Their business is to sell domain names that end with .ws instead of .com

You can get .com, .us, .net, .biz, .org and .name (and many others) for between $6.95 to $9.75 for an entire year at cheap-domainregistration.com where I buy ALL of my domain names.

In fact, I just looked up my own name for .ws and it's $9.75 for the year. So what does GDI charge? They charge $35 per year AND I have to commit to two years. That's 350% higher!!! Obviously the extra money is tacked on so they can pay something out to their MLM distributors - right? If I were to commit to 10 years, their cheapest price is $24 per year.

So let me repeat - I can buy the SAME .ws domain for $9.75 per year with only a 1 year commitment... or spend $70 for a 2 year commitment if I buy from the company who launched the .ws domain.

Doesn't this sound like paying for recruitment? I mean what's the extra money for? In legal MLM's you pay a small member fee to become a Distributor and get access to CHEAPER prices... NOT higher prices.

So why would you join GDI? Well, it appears it would be ONLY to make money... not for any other reason. "Legal" MLM's need a legitimate product... and while selling .ws domain names is a product... there would be no business for distributors if they didn't charge 350% more for the "product".

To actually be eligible to earn money in GDI you need to spend $10 per month to get a website with email addresses. Well, once again at Cheap-DomainRegistration.com I can get the same thing for between $1.99 and $3.99 per month.

So you tell me... it GDI "legal". Oh, I know the company will tell you they are... but since it often takes years for the FTC or Attorney Generals to go after the illegal ones like BurnLounge... only time will tell.

E4L update

Entertainment for less said they'd be launching on August 1st... well it's August 3rd right now and nothing has happened. So I logged into their daily "hotconference" meeting at 9am PST to listen in on what's going on.

What a waste of time first off... they had a guest speaker who has only signed up a few people... HUH???? So it's free to sign up... and their guest speaker after several months has only signed up a couple of people.... OK - stop the rant... what's the latest???

Well - now their "founder" Brad has told the 70,000+ folks who have signed up for free that it will be "another 3 weeks". No one seems to know why... and worse... there is STILL NO COMPENSATION PLAN!!!

The folks in this bizarre pre-launch MLM are convinced they are going to make thousands or millions or dollars... but again, I say from WHAT????

They are promising below-market prices on their products.... in other words there will be no margins. You can only pay on profits right? If there are no profits then what are you paying out?

So far not one E4L.biz person has commented here... but apparently... per today's host on hotconference "Lorna" she is getting "hate mail" from members. Wow - what a surprise. And you know what her response is "well, they aren't logging into and listening in on the "hotconference" calls. Well... I did that today... and learning NOTHING. The guest speaker said nothing about the business, and has done next to nothing in the business. Guess what he was doing... he was promoting his other businesses... what a joke!!!

There were actually people asking if they could set up Trust accounts so their 10 year old son could have this imaginary E4L business. "Lorna" said "yes, that's a great idea". Wow... talk about drinking some coolaid.

They keep talking about getting "matching bonuses" and other hype-talk that sounds great.... but IS ANYONE MAKING ANY MONEY??? They never mention that!!! And HOW WILL ANYONE GET PAID when they do finally launch (and now that they missed one launch date - will they ever launch?) - they never mention specifics about getting paid.... why? Well, from what I can tell... this "Brad" guy is the only one who knows... and he's not saying.

Yikes... this only feels fishier by the day... I'll check back in "3 weeks" to see if they've missed another deadline... so stay tuned.

Scam.com - YTB discussions

For those who want to hear both sides... is YTB legal or not... there's a pretty good discussion at http://www.scam.com/showthread.php?t=27821

I still side with the "illegal" argument because their "real" business appears to be selling travel agencies (which are really only replicated web sites... like selling individual Expedia sites to people) and it's NOT to tell travel. Oh they say they're in the business of selling travel, but they are making a fraction of their revenue from selling travel. So I don't believe the FTC will see it the way YTB sees it.

E4L.biz - scam or legit?

I'm going to call this one a scam... for now. Here's why:

You can find ZERO info on their pay plan. Yet the usual "What would you do if you woke up one day and found you made $10,000.00 or TENS of Thousands of dollars over night?"

So this makes me start thinking "b*** s***" or "scam alert", but this one is free to sign up while they are in "pre-launch".

There are a few problems here..

First - they say "everyone will buy from us because we're going to have cheaper prices". OK - sounds good for customers... but you need a profit margin to be able to pay your sales people (or MLM distributors in this case). One example they use in their "exciting opportunity" audio are new DVD releases that others sell for $29.95" and that E4L.biz might sell for $10, $15 or even $20 less. Uh-huh! So you're saying there are more than 33% to 66% margins in DVD's... enough to pay out "TENS of Thousands of dollars over night"

Second - they are paying "100% matching bonuses on people you personally sponsor". So that means the margins have to be twice as good as what I just pointed out.

Third - and this is what's so bizarre about these guys... THERE IS NO COMPENSATION PLAN written up anywhere. Thousands and thousands of people are signing up... and have no idea how they are going to make money.

So why are they signing up? Well, for one... it's free. I signed up... why not, I just had to give them my email address. Then they have a "VIP" membership for $20. Somehow or other you're going to make more if you spend $20. But again, they don't say how much more... because they don't tell ANYONE how much, or HOW they will make any money.

Now... I'd love to give this company a better review... but I searched long and hard and can't find anything other than marketing hype. So... if you have something to share... please do post a comment here. I'll gladly update E4L.biz to "legit" from "scam" if someone can give me FACTS... and WRITTEN facts that can be made available to everyone. PLEASE - no marketing hype... I've seen the YouTube videos, I'd toured the E4L.biz site AND it's back office... nothing substantive can be found anywhere.

YTB Travel - legal or illegal

Type in "YTB" into Google, and like any other MLM opportunity, you'll find hundreds and even thousands of promotional web sites. When I was first introduced to YTB the red flags jumped out almost immediately. Why? Because I already knew that Expedia and Orbitz were only making $5 per booked flight... and if YTB charged more, no one would bother booking flights there... and if they only charged $5, no one would ever make any money. SO HOW could you make "legal" money as a YTB rep?

According to the Florida Attorney general there are "Possible unfair and deceptive business practices..."

Read the investigative case summary here:
Attorney General of Florida

The Distributor who told me about YTB claimed you got a much bigger cut when people bought full travel packages... but while it may be a larger dollar figure, it wasn't all that much... and I had to ask myself... how many people buy travel "packages" instead of booking indivudual parts each year? (flight separate, then hotel, then car, etc.) Based on my personal experience of traveling at least a couple of times per year... and planning some pretty exotic trips... the answer is very, very few.

So HOW does a YTB rep make any money? Well... from signing up other YTB reps at $500 a pop. HELLO... THIS IS ILLEGAL!!! A pyramid scam is when you are paid primarily for recruiting. Many MLM distributors don't understand the finer points of this statement and get caught up in illegal plans... which YTB appears to be.

Here's a link to YTB's pay plan http://www.ytb.com/downloads/YTB_comp_plan.pdf

They clearly show that an "RTA" "Referring Travel Agent" gets paid to recruit other RTA's. For this to be legal, this payment would have to be completely eliminated... but it appears to be the focal point of their plan.

In a legal MLM you recruit... yes... but you don't get paid for your recruiting. When your recruit doesn't buy a product or service or go on to sell a product or service... and you still get paid... THAT is illegal. This is why "consumable" products or services... where you order the product or service every month... is more likely to be legal. Whereas travel... where there are no margins, and most people only travel once or twice per year... is almost assuredly going to be illegal.

If an RTA only got paid when travel was purchased that would be legal. So you could charge a nominal fee to become an RTA, and when the RTA you recruited buys or sells travel... you get paid. But the margins in travel are too small to make this profitable.

When I made my new YTB friend, I looked into her comp plan at her request, and quickly saw the problems and pointed it out but she said "no, you're wrong, and I know because we have a top MLM attorney in the company." She further pointed out that since her upline was making a ton of money, that was more proof that it was not illegal.

Well... I just happen to be someone who NEVER trusts attorneys... I don't trust the media, I don't trust bloggers... I don't trust anything that sounds fishy, or too good to be true... UNTIL I research it myself.

Why I don't trust the media (they're lazy and really there to entertain, not to inform) is another story... but my lack of trust of attorneys is relevant here... the problem with lawyers is that you can get anyone to defend or sue ANYTHING if you pay them enough! They will say anything, sue anyone, fight for any cause... and convince you and themselves that they are right when common sense is 100% against them. Maybe I should hate the system and not lawyers... but the system is as good as it gets.

Anyway... back on topic... the YTB lawyer, according to Len Clements "had gained a reputation within MLM circles for representing 'questionable' clients".

So they got an attorney to convince themselves and their distributors that something that is illegal is legal... and when money changes hands some distributors will make money... so it all looks very good... until some Attorney General attacks!!!

I'm posting the full article from Len Clements at MarketWaveInc.com below... it's a thorough analysis of the YTB situation:


MarketWave Alert #84

YTB Travel Distributor Hit By Florida
Attorney General Taking Unusual Bottom Up Approach
July 14th, 2007
The Attorney General's office of Florida has taken legal action that would suggest they believe YTB Travel is an illegal pyramid. Oddly, though, they have chosen to file this charge against one of their leading distributorships rather than the company itself.

Case information can be found online at:

http://myfloridalegal.com/lit_ec.nsf/investigations/ E5753C00CCA85B05852571AA005A4C44

Rick & Brenda Ricketts, as their corporation and as individuals, are accused of the following (quoted from the above referenced online document):

"Allegation or issue being investigated: Possible unfair and deceptive business practices in the sale of internet travel website opportunities or in the recruitment and operation of multi-level marketing systems promoting business opportunities and recruiting sellers of travel. Possible violations of Florida Deceptive and Unfair Trade Practices Act, Chapter 501, Part II, Fla. Stat., and violations of Section 849.091, Fla. Stat., prohibiting operating, participating in, or soliciting on behalf of a chain letter or pyramid sales scheme."

There appears to have been no action taken, as yet, against the parent company YTB Travel Network.

Commentary:

YTB (Your Travel Biz) is another one of those enigmas where they not only clearly do pay commissions based on recruitment, and it's where the large majority of commissions are derived, but they openly and clearly acknowledge this!

Therefore, I believe YTB is yet another example of a company designed and operated by people who had good and honest intentions, but made a mistake. A lie, a fraud, a scheme - these all imply a deliberate, knowing attempt to deceive. A "mistake" is where you honestly believe you are doing nothing wrong - but you are.

In my opinion, YTB Travel has, in designing their business model, made a very bad mistake.

"Rep commissions are paid exclusively on the enrollment of new Referring Travel Agents (RTAs) and on their monthly license fees."

That's straight from the web site of the accused. Which, by the way, appears almost identical to every other YTB Travel rep's site I found. What the Ricketts did that was so much more egregious that any other YTB rep is not at all clear from the AG's limited disclosure. However, Rick Ricketts was terminated by Excel Telecom (where the majority of income was also made from an initial sign up package) for alleged policy violations that caused the Florida AG to get involved. So it appears Mr. Ricketts and the FL AG's office were already acquainted before this latest action. He was also a successful distributor with the notorious SkyBiz scheme (terminated by the FTC - for paying commissions on recruitment based revenue).

YTB goes on to describes an "Independent Marketing Representative" ("Rep") as someone who may "earn commission on personal online Travel Agency sales" but who may "not receive travel credentials and cannot sell travel."

They further openly reveal that a $50 "Direct Sale" and "PowerTeam" Commission will be paid on "Every new sale (of an online Travel Agency)". A "Direct Sale" commission is defined as "Reps earn $50 for every personal online Travel Agency sale they make".

There is a $500 upfront fee and a $49.95 monthly fee charged to those who want to acquire an online travel agency site. Not only do these $50 bonuses come from this $500 sale, the monthly $49.95 fee also spins off $2.00 in "residual commissions". A $10,000 "Dream Bonus" can be earned when "you reach a total of 100 active PowerTeam enrolled RTAs." No mention of actual travel sales, just the number of RTAs (Referring Travel Agents) recruited.

They do pay a commission on the actual travel booked via the agent's web sites, but as had been the challenge with virtually all travel based MLM ventures, you can only cut the pie so thin, and when the cutting is done there just ain't much pie left for the rep. In the case of YTB, again they are very forthcoming in that they pay out 60% of the agency commissions they receive on travel products, but they only get a small portion of each travel fee. For example, a domestic air travel ticket only kicks back $5.00 to YTB, of which they pay 60% of that, not the net cost of the ticket, back to their reps. A Carnival Cruise ticket might cost $700, but they don't pay 60% of $700. They pay 60% of 16% of that $700.

So, like most service based MLMs (like I described in Alert #81 re: BurnLounge), when the actual service you're in the business of selling does pay enough, add a big enrollment fee up front for something and pay bonuses on that. Problem solved. Then new problem caused.

YTB International is a public company (YTBL.PK) whose sales the first quarter of '07 were 24,178,481. However, their own financial disclosures show sales from "Online travel store sales and monthly fees" as being $17,965,361, or 74.3% of all revenue (it was 83.8% in 2006). Furthermore, "Training programs and marketing materials" accounted for another $3,361,152. So revenue derived entirely and solely from recruiting new reps accounted for 88.2% of their total revenue! Of the $24,178,481 taken in from associate web sites and monthly fees, $16,136,795 is paid back out in commissions (exactly two-thirds). But of the $2,537,694 that YTB earned in commissions from actual travel bookings and related fees, they paid out $1,608,688 of that. That is a healthy 63%, but again, that's 63% of about 5-15% of the actual travel booked. But what is even more telling, and raises a huge red flag, is that of the total $17,745,483 that YTB has paid out in commissions in the first 90 days of '07, 91% of it (86% last year) came from the sales of marketing web sites and monthly rep fees - not from the sale of travel!

It was also disconcerting to see their annual net loss every year since 1998, with 2005 and 2006 being the largest ($5,880,927 and $6,052,984 respectively) and an operating loss of over $2.2 million the first quarter of this year.

There doesn't appear to be any question that the $500 and $49.95 fees for the "travel agency" are entirely based on recruiting. Obviously no one can sell this to someone who has no interest in the business opportunity (unlike a bottle of vitamins or shampoo). Furthermore, the travel web site (store) is clearly a sales aid and, based on substantial legal precedent, MLM companies are not suppose to even make a significant profit from, let alone pay commissions on, sales aids (because only reps, never customers, would buy them).

YTB Travel does have legal council in Ted Lindauer, who is knowledgeable of MLM law. In fact, Mr. Lindauer was an "MLM attorney" for many years and represented numerous MLM clients over that time. However, before going in-house with YTB Mr. Lindauer had gained a reputation within MLM circles for representing "questionable" clients (i.e. The Millennium Group, Platinum Choice, Purchase Plus, H.O.P.E., National Communications Network, Top Marketing), and had a history of having to defend them in front of state and federal regulators.

I contacted YTB President & CEO Andy Cauthen for an interview. Nine days ago he forwarded my request to Mr. Lindauer and their investor relations firm for follow up. There has been none.

Several travel deals have been leveled over the years due to poor income potential, or to legal challenges involving the paying of bonuses on "travel agent" packages or training (i.e. World Class Network and Nu Concepts in Travel). Others have been shut down for paying commissions on the sale of online malls, through which many types of goods and services could be purchased, including travel (i.e.BigSmart, and NexGen).

Picking on one of YTB's leading reps rather than the company itself seems to smack of picking the wings off flies (why not just hit the company and get on with it?). I'm sure the Florida AG's office has their reasons, but they ain't tellin'. But time will.

Len Clements
MarketWave, Inc.


_________________________________________________________
MarketWave Alerts(tm) is copyrighted material. Alerts may be freely copied or forwarded in their entirety only under the condition that they not be edited or revised in any way, the MarketWave web site address be included, and the non-subscriber recipient be agreeable to receiving it. It is the belief of MarketWave that the information presented is accurate and truthful as of the date of the Alert. Any and all commentary is the expressed opinions, views and beliefs of Len Clements protected under the U.S. Constitution. Len Clements is not an attorney nor should any part of any Alert be construed as legal advice, nor should it replace the advice of competent legal council.


By the way... if you want to stay on top of MLM alerts... www.MarketWaveInc.com is the site to go to. Len Clements has about 20 years of experience and from the above article certainly seems to know what he's talking about.