Wondering Which Reviews of Vemma You Can You Trust? Here’s What You Need to Know.
Vemma, which claims to be a legitimate multi-level marketing firm is a privately held company which has come under scrutiny by the FTC for its business models and marketing schemes. After reporting a turnover of $221 million in 2013, the company has attracted a lot of attention from business analysts, as well as the media, given the soaring revenues and endless recruitments. Is the company running a scam which is shrouded by layers and layers of business misleading business logic? Let’s find out the truth.
Federal Trade Commission Sues Vemma
With a series of law suits and fines being levied against the company, there is a lot of hype around the beverage company which specializes in selling energy and nutritional drinks along with weight management line of products. In August 2015, the company was sued by the US Federal Trade Commission, wherein, they have been accused of operating an illegal business model for selling their products and fooling college students in doing their marketing.
About the company
Given their generous, money making sharing plans; even you would be easily convinced that joining their marketing scheme is a great idea. Like any other company which specializes in manufacturing and distributing energy drinks and weight loss products, even Vemma offers to keep you healthy, wealthy and wise; though, that would be applicable only if you choose to become a part of their company’s distribution list.
The Brand Partners – College Students
Being a $30 billion conglomerate, Vemma has often relied upon college students to sell and market their products. In turn, these college students are promised handsome returns and material possessions, which have sometimes included BMW cars as sales bonuses.
Is it really true? Can you earn thousands of dollars by becoming a door to door salesman for energy drinks? Does one really need to endure endless classes and drab college education? If such schemes are already operating in the market, why bother with studying and setting out a stable career?
These so called college students become Vemma’s “brand partners”, since their main job is to propagate the brand’s name by making people aware of the company’s products. In turn, these brand partners are also required to recruit more of their college friends, in order to maintain the network’s decorum and strength. The structure begins to resemble a pyramid, as more and more people begin to join the network, with an aim to make a niche for themselves in the world of marketing.
For students who are trying to repay their mounting college debts and heavy student loans, getting a chance to earn some extra pocket money seems like a dream come true. Managing expenses, reducing the incidence of loans and getting rid of the burden of college debt is just too good to be true.
As more and more students try and convince their friends to convert into the newest religion of selling Verve drinks (one of the famous, so called energy drinks offered by Vemma currently, which is a direct competition to brands like Red Bull and Monster), there is a new tradition which is quickly reigning over every college campus in the US.
When the allure of fake marketing and out of the box marketing strategies crumbles, students realize that everything is over hyped, in order to sell the energy products.
Explaining the Vemma Business Opportunity
Whether you think Vemma is a Multi Level Marketing (MLM) company or a pyramid scheme, the concept is nothing new, especially for a weight loss and diet supplement manufacturing company. Selling its products through a series of brand partners or affiliates, Vemma operates heavily on the concept of referral marketing.
However, critics claim that the brand ambassadors have to build their little pyramids inside the Big Vemma Pyramid, in order to get paid for their services. The more people you recruit under you, the better it is for your bank account at the end of the month. However, it’s not so.
Vemma – the Brand Like No Other?
Critics of Vemma state that like many of the other companies which exist in the market, Vemma is no different, when it comes to the similarities with other pyramid schemes. They say that the first hard to ignore similarity is that it ropes in college students to do its products bidding, given their dwindling financial situations and hope for earning some quick bucks. However, the return on the student’s financial investment and time management is negative, since there is nothing for the student to look forward to post their affiliation with the conglomerate.
Critics of the company also state that another similarity comes into the picture when the students are required to purchase the energy drinks from their own funds. An initial on boarding investment along with recurring monthly expenses suck the students dry, turning their bank balances into negative amounts.
The brand partners are initially required to invest $500 to buy the builder pack, which has to be supplemented every month with $150 worth of shipment in order to be eligible for bonuses (remember, bonuses would mean fatter paychecks and a shining BMW, if you meet the sales targets).
Marketing Gimmicks or Sales Strategies? Many Students Are Skeptical
As per Vemma’s 2012 income statement, about 97% of people who come aboard the company’s bandwagon will not even earn minimum wage. This is not all, for about 86% of them will make less than $3000 a year, especially, if they continue to be a part of Vemma’s marketing strategies.
The company does not tell you how to market their products. Unfortunately, you’re left in the lurch, when you are trying to secure enough funds to get rid of the piling stock every month. The company makes tall promises at the time of piling their products on to the brand partners. After the on boarding, everyone is on their own, trying to fund and scrape through whatever they can.
MLMs and Pyramid Schemes – The Differences Go Unnoticed
Almost everyone who joins a pyramid scheme ends up on the losing end. Vemma is no different than some of the other pyramid scheme based companies, when it comes to multi level marketing. As per the company’s CEO, Benson K. Boreyko, Vemma just employs a different business model to drive sales of its products, in order to maximize sales. As per him, the business critics are not acclimatized to this concept, since its alien to their minds. Instead of spending a lot of money on advertising, their marketing strategies include paying people to propagate their products through word of mouth and personal experience. Since people recruit basis their personal experiences, there is a higher chance of more people joining in, since the source of information is through word of mouth.
Deans to the Rescue
Business school deans have become alert, when it comes to making their students aware of what they are getting into. Since business schools studies are based on real life examples, companies like Vemma are giving students all the wrong concepts about entrepreneurship and business strategies.
Business schools are focused on making the students understand how to disregard business fundamentals by understanding markets and consumer behavior along with the cost of doing business. But when twisted concepts like Vemma’s ponzy pyramid schemes come into the picture, the concept of business goes out of the window.
Business Model Changes – Will it Help Vemma Win Their Case Against the FTC and Other Regulators?
Like its counterpart, Herbal Life, which came under Federal Trade Commission’s scanner due to its existing business model, Vemma’s CEO wants to change its business model and modus operandi. As per Benson K. Boreyko, the FTC has guns which can thrash a company left, right and center, without leaving any scope of reentry into the market.
So you might ask, what changed in the business model? For starters, the company is no longer going to be recruiting college students to get its products sold in the market. Secondly, since the college students would not be products messengers, the $150 fee is now waived off simultaneously. Thankfully, this marks the end of the signup fee as well, which amounted to $500. Will this hurt the sales of Vemma? Of course, since the major source of revenue for the company will go down drastically, post the end of the signup fee and the monthly subscription fee.
Complaints About Vemma
Vemma, like some of the other pyramid companies in America, has not been spared from complaints and lawsuits. Many companies as well as concerned parents have filed cases against Vemma, in order to protect their own interests. Unfortunately, at the time of signup, the brand partners were made to sign an agreement, which binds them from ever speaking out against the company or against anyone working with the company. With this agreement in tow, there are hardly any affiliate grievances which actually go beyond the walls of their houses.
This is not all, for even vendors are piled up law suits against Vemma. In the year 2010, nonprofit company and watchdog, Environmental Research Center filed a complaint, wherein it was clearly stated that the company was manufacturing and selling beverages with high levels of lead. The complaint was followed by another law suit filed by the Federal Drug Administration for violating the regulations levied on such companies. The complaint was launched basis reports from customers who fell severely ill after consuming the energy drinks, at different times of the day.
Expanding Its Operations Beyond American Soil
Ever since its nosedive in America, Vemma took its operations to Puerto Rico, Mexico and Columbia. With this said and done, the operations have spread like fire to over 51 countries around the world, each following their own pyramid scheme to sell the products. Everywhere the company goes, the rumors reach before the operations do. With so much conversations happening all throughout the world, there is hardly any country which is left untouched by the pyramid schemes of Vemma and other similar companies. As each country is beginning to realize the dangers of granting Vemma licenses to manufacture and distribute within their markets, there is a renewed interest by the Governments to stop everything before the dangers spread.
Is Vemma a Scam and a Pyramid Scheme or a Legitimate Business?
After reading all that there is about Vemma, you might very well believe in the authenticity of the business opportunity offered by the multi billionaire company. Not only is the company under close scrutiny by TINA.Org, but it’s also being made the butt of investigations by students, university heads and businesses alike.
In March 2014, the Competition and Markets Authority (AGCM) in Italy declared Vemma’s business model to be a pyramid scheme and sanctioned the company a whopping amount of €100,000. In response to the appeal by the Italian agency, TINA.Org registered an appeal with the FTC and UK’s Advertising Standards Authority, and some counterparts in Ireland. This action was taken to spread awareness towards Competition and Markets Authority’s appeal against Vemma, so that the distribution and manufacturing of the company’s products are brought to a standstill.
August 2015 FTC Lawsuit Against Vemma and Temporary Asset Freeze
In August 2015, FTC has filed a law suit against Vemma, in lieu of the pyramid business model which is driving the company’s revenue system. Apart from the lawsuit, there is also an instant temporary asset freeze on the company’s assets, in order to halt the illegal actions and prevent any further damage to different economies all over the world.
Post the law suit, the asset freeze appeal was also sanctioned by the Federal Court in August 2015, thereby, giving the FTC permission to carry forth their actions. The court has scheduled a hearing on Sept 2015 to address the Motion for Preliminary Injunction, filed by FTC on August 21st.
The verdict is very unpredictable, given the nature of parties being pitted against each other at this time. However, Vemma’s CEO is quite sure of their imminent success in the Court of Law, following which he hopes to have all charges dropped. With contemplation riding high on the scheduled hearing, there is a lot to be seen and done, since the idea behind the law suits is to drive justice for the affiliates who have been swindled out of their finances, all thanks to the ponzy schemes run by Vemma, the conglomerate.
If you too have been looking forward to signing up with Vemma or any other similar company, it’s time to take a rain check and invest your hard earned money in something more fruitful and rewarding. Take charge and take notice; for the more cautious you are, the safer you would be in the long run.
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