Hot off the presses this morning comes news that the Federal Trade Commission has fined multi-level marketing business Herbalife $200 million. Furthermore, the company will restructure its US business to “tie distributor rewards to verifiable retail product sales and stop misleading consumers about potential earnings.”
Key points from the article include:
- Discount buyers will not be able to sell product or earn rewards. They will be classified differently from participants in the business opportunity.
- Two thirds of the profit sharing will be derived from retail sales that will be tracked and verified. No more than one third will come from personal consumption (the buy from yourself and teach others to do the same method that a number of MLMs have abused).
- At least 80% of product sales must be delivered to end-users.
- Herbalife is prohibited from claiming members have “quit” their jobs and now live an extravagant lifestyle due to the business opportunity.
This is great news for those who have long criticized companies that operated under the guise of selling products but were essentially recruiting-based schemes with little to no retailing. We can only hope that the FTC will continue to investigate, fine, and punish other companies that use similar tactics.
Read more about the restructured Herbalife on the FTC website here.
AdvoCare is a multi-level marketing company company that sells nutritional products (sound familiar)? What’s different from other MLM companies is that they have a large number of notable sports athletes (such as NFL Quarterbacks Drew Brees, Andy Dalton, Philip Rivers, and Alex Smith) that are endorsing the company and its product.
This week, ESPN ran a lengthy expose on AdvoCare and raised the question on whether or not the company is a pyramid scheme. AdvoCare rallies, meetings, and presentations described in the ESPN article share many of the same characteristics that have been described on this blog and others that are critical of MLM businesses.
LazyMan and Money expanded on his previous analysis of AdvoCare in an updated post today. Check it out.
Bonvera is the new multi-level marketing company from former LIFE Policy Council member Tim Marks and key ex-LIFE members. Extroda is the new “system” or company that will teach someone how to build a successful Bonvera company.
There’s a launch video about Bonvera that will be familiar to anyone who has ever been prospected by or participated in an MLM venture. What does Bonvera sell today? Energy drinks and bars.
Stop me if you’ve heard this story before.
The company says that they “won’t stop adding products” until they have “everything you want.”
We’ll see about that. It would be instructive to know the manufacturer that creates Bonvera’s Phyzix-branded energy drinks and energy bars. It would not surprise me if that manufacturer made other white-label products for other companies (including potentially other MLM companies).
From the Bonvera trademark application, here is a list of markets that the company may be selling in the future:
Multilevel marketing business services featuring energy drinks, energy bars, nutritional supplements, personal care products, cosmetics and skin care products, consumer electronics, general consumer merchandise and general consumer goods, home furnishings, and home appliances, household cleaners, soaps, laundry products, jewelry, pet supplies and health aids; Providing a website featuring information on multi-level marketing business services; Providing and implementing incentive and awards programs for independent sales representatives to promote the sale of products and services to others and the recruitment of additional independent sales representatives; Computerized online ordering services featuring energy drinks, energy bars, nutritional supplements, personal care products, cosmetics and skin care products, consumer electronics, general consumer merchandise and general consumer goods, home furnishings, and home appliances, household cleaners, soaps, laundry products, jewelry, pet supplies and health aids
Remember that the principals behind Bonvera and Extroda once were a part of Amway at the turn of the century before leaving unceremoniously in 2007. Between 2008-2011, they were at MonaVie, selling high-priced purple juice concentrate packaged in wine bottles. Later, they hawked leadership products for LIFE from 2011 to the end of 2015. Here’s a video of Tim and Amy Marks when they were part of MonaVie:
And another when Marks was promoting LIFE:
On Twitter, Bonvera distributors are seemingly pumped, tweeting our their excitement for their new venture.
Someone needs to remind them that it’s 2016, not 1999. Remember when Quixtar was going to lead the e-commerce charge?
Joe Darkangelo is recycling an old phrase of his from his MonaVie days (substitute juice for drink):
The Extroda system costs $49.95/month and includes 8 downloadable files each month and some kind of presentation to share the opportunity with others. Will there also be weekly seminars, monthly meetings and quarterly major functions? Will the cost to attend those functions be similar to the ones in the LIFE business?
Here are some tweets from the Bonvera launch events in Toledo, Ohio and Tampa, Florida this week:
- How many of those people were formerly part of the LIFE business?
- How long they’ve been planning this departure behind the backs of the leaders of LIFE?
- How long have they been dissatisfied with the LIFE business?
- How long have they been posting positives about the LIFE business on social media while at the same time talking with others about how they were going to leave?
- At what point did the leaders in LIFE know that a mass defection was being planned?
It’s interesting to compare and contrast the tweets from Bonvera/ex-LIFE members and those still in LIFE. Will there be passive aggressive tweets from those still in LIFE? Do Bonvera members have any parting shots (veiled or unveiled ) at LIFE?
Readers – If you find any, post them in the comments section below.
It will also be worth watching the Twitter accounts of these new Bonvera members over time to see if their enthusiasm remains the same or wanes one, two, or three years down the road.
Finally, here’s a YouTube video from HBRN’s Leadership Factory with Tony Cannulli and LIFE founder Orrin Woodward. Their guest on this episode was Tim Marks, who talks about his book Voyage of a Viking and how he turned defeats into lessons for future victories:
Something tells me that Marks won’t be appearing on a future segment of this show.
The schism between those that follow Tim Marks and those that pledge allegiance to Orrin Woodward and Chris Brady’s LIFE business continues with more revisionist history from the former camp. In my previous article, I mentioned that several new ex-LIFE members have been publicly tweeting that they are no longer part of the LIFE business. They are doing this to fulfill a requirement in the LIFE Policies and Procedures document (184.108.40.206).
In his tweet, Chris Mattis announced he is no longer affiliated with Life Leadership:
I also metioned in my blog post that “some members also have personal leadership websites that they published to in the past. What will become of them? Will references to LIFE disappear? Will the sites be deleted? Only time will tell.”
I refer readers to this blog post by Mattis, titled Replacement Driven Leadership. The article talks about how the genius of Tim Marks is his ability to have others replace him. What’s funny is that if one looks at the original version of the article, one sees that Mattis originally was talking about Orrin Woodward and Chris Brady in addition to Tim Marks. Check out these before and after screenshots. Click on images below to see them bigger.
In this second screenshot from the article, Mattis removes two references to Woodward and Brady, including a shout-out to Orrin’s book Resolved.
Finally, in this third before and after screenshot, Mattis omits the line referring readers to Woodward and Brady’s book Launching a Leadership Revolution, which he called “the best manual written on Replacement Driven Leadership.”
There are more instances of such revisionist history on his blog, archives of which you can find on the Wayback Machine on Internet Archive. Entire blog posts have been removed, including ones titled “Orrin Woodward asks the Right Questions?,” “Orrin Woodward & Chris Brady’s MFC: Mental Fitness Challenge,” and “Home Business Radio Network’s Leadership Factory.”
You can still watch the Home Business Radio’s interview between Orrin Woodward and Chris Mattis here:
Want to place bets on how quickly this video will be taken down? Revisionist history goes both ways, and you can be sure that LIFE will continue to scrub mentions of those who left to follow Marks from its business.
Pointing out these examples holds those who try to revise history to suit their needs accountable for their past beliefs and actions. For instance, those in TEAM/LIFE once were strong proponents of MonaVie (which has pretty much disappeared). Before that, they hawked Amway. These two other businesses were promoted as the best businesses in the world to make lots of money. What happened? Would a new prospect join LIFE if he or she knew of their past history?
I suspect that whatever new products that Tim Marks and his followers promote, there will be no mention of their past with TEAM, LIFE, MonaVie, or Amway.
Following up on the news that Tim Marks, a high-ranking member of the LIFE multi-level marketing business is leaving, a number of LIFE members have publicly tweeted that they are no longer part of the organization. Many of the tweets reference clause 220.127.116.11 in the LIFE Policies and Procedures document, which states that members who have used Social Media sites in the past as a publicly identified LIFE member must disclose that they are no longer independent LIFE members.
Here are some tweets that I could find. I believe that some of their Twitter bios had some reference to the LIFE business in the past. These references for the most part have now been removed. Some members also have personal leadership websites that they published to in the past. What will become of them? Will references to LIFE disappear? Will the sites be deleted? Only time will tell.
NOTE: Chris Mattis needs to update his Twitter Bio, which still says “LIFE Student” in the description.
While she doesn’t mention P&P 18.104.22.168, one can infer this is her disclosure of her leaving the LIFE business with her husband, Chris.
Lynda’s husband, Venkat Varada, re-tweeted his wife’s disclosure tweet. Does that qualify as fulfilling P&P 22.214.171.124 for him too?
LIFE members have been adding the hashtag #LoveLIFELeadership to their tweets. None of these recent tweets from newly ex-LIFE members have referenced that, and many of them expressed gratitude for the past number of years they were affiliated with LIFE. I do wonder if they did that to avoid any backlash from those who are still in LIFE. This breakup can’t possibly be good for the LIFE business, and we know that grudges are often held during any sort of MLM schism.
Readers: If you find other new ex-LIFE members tweeting their departure from LIFE, leave the URL to the tweet in the comments section below.
A commenter wrote recently that Tim Marks does not appear to be part of LIFE Leadership anymore.
Today, the footer in the official Life Leadership website lists the following names for Founders: Orrin Woodward, Chris Brady, Claude Hamilton, George Guzzardo, Bill Lewis, and Dan Hawkins.
Yet, the Internet Archive’s Wayback Machine has a snapshot of the LIFE Leadership website on November 3, 2015 which clearly shows Tim Marks name listed in the same footer.
Furthermore, conducting a search for LIFE Leadership material written by “Marks” on the LIFE Leadership Store shows zero results. Entering “Brady,” “Hamilton,” or “Woodward,” for instance, shows a number of expected results.
This begs the question, “What happened?” Has the Viking set off on another voyage? Has Tim’s departure been communicated to the greater TEAM/LIFE community? If so, what was the reason for him leaving? If not, why not?
If anyone has more verified information, please leave it in the comments section below.
Vemma, the dietary supplement MLM, was shut down by the Federal Trade Commission this week. The FTC alleges that the company was operating as a pyramid scheme. More information about the Vemma shutdown and investigation at Truth In Advertising and across the web.
“Rather than focusing on selling products, Vemma uses false promises of high income potential to convince consumers to pay money to join their organization,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We are also alleging that Vemma is an illegal pyramid scheme.”
I suspect high-level Vemma affiliates are scrambling to find other “opportunities” to latch onto as the Vemma ship goes down. I wonder what YPR Pariah, a critic of Vemma whose website was mysteriously shut down last year, thinks about the news.
Kudos are in order to the FTC and everyone who assisted in making the case that Vemma might be operating an illegal pyramid scheme. There are so many more companies out there operating in this fashion; it’s a shame that the government can’t stop them all. If you suspect a company is an illegal pyramid scheme, file a complaint with the FTC and your state’s attorney general.