Vemma has been in trouble for pyramid scheme activity in the past but are they okay to go into business with now? If you are wondering is Vemma a Pyramid scheme then I am writing this for you. I know there is a lot of controversy surrounding the business opportunity that Vemma offers and that is what I’ll be going over here.
If you are looking into this biz opp for yourself of a friend then you are going to want to read this. There are upsides and downsides to this business that everyone should be aware of before joining.
Vemma is a nutrition mlm company that sells energy drinks (Venna Verve), vitamins and other products. Their products seem to be good quality and all but the FTC has come down on them for unsubstantiated health claims in the past.
But anyway, the business opportunity is what I’m interested in here. They have received a lot of heat over the years and in 2016 agreed to stop pyramid scheme practices after charges were brought against them by the FTC. There is an article you can read about this here if you wish.
They did clean up their act but what you call a pyramid scheme and what the FTC calls a pyramid scheme might be two different things. There is still a lot about Vemma’s business model that resembles a pyramid scheme and you will see what I mean.
The Compensation Plan
Affiliates have a handful of ways that they can earn money working with Vemma. First I’ll go over how you can earn from personal sales and then I’ll go over the mlm “pyramid scheme” part of it.
As an affiliate you will be able to purchase Vemma products at a discounted price. This gives you the opportunity to then turn around and sell those products at retail prices in which your profit will be the difference between the two. You will also be able to earn 20% commissions from people that you refer to buy from Vemma directly (doesn’t include auto-ship purchases).
The mlm part of this comp plan is where the real money is made. You will be able to earn from recruiting in others from both a Team Bonus and a Matching Bonus.
Team Bonuses are paid out on a binary structure. There are 2 positions beneath each person. When you recruit in other affiliates and bring in new customers they fill the 2 positions beneath you and then others that are open below that. You will earn either 10% or 15% of the sales volume from the side of the binary structure that is “weaker”.
Matching Bonuses are paid out on a uni-level structure. You will earn commissions down to 4 tiers beneath you. The people that you personally bring in make up your 1st tier, the people that they bring in make up your 2nd tier, and so on. Since it is a uni-level structure there can be unlimited number of people at each tier.
In order to “unlock” the entire compensation plan you have to move up the ranks. For example when you start out you will not be able to earn from all 4 tiers for the Matching Bonus. You will need to move up the ranks to do this.
Although this may look like a pyramid scheme it is not. They listened to the FTC and changed the way they do things. In order for affiliates to get paid the majority (51% +) of their sales must come from the general public, not from recruitment.
This is a big deal because pyramid schemes are pyramid schemes because of there over-reliance on recruitment for revenue. And if Vemma requires affiliates sales volume to come mostly from customers then it simply is not a pyramid scheme. That is all there is to it.
But Its Still a MLM
Even though it isn’t a pyramid scheme it is still a mlm with a pyramid-like structure. This means that the income distribution will be very uneven, with those at the top making most of the money while those at the bottom struggle. This is because those at the bottom could be making much more money on their sales but they don’t because much of the money made goes to paying Team Bonuses and Matching Bonuses of people above them.
This is the reality when it comes to mlm’s. They get a bad rap and rightly so… they are very hard to make money in due to the compensation structure. There is a lot of potential to make a lot of money as you move up the ranks but only few are able to due this while most are at the bottom struggling.
This is the reality with pretty much all mlm’s. I recently reviewed Neolife & TruVision Health and its the same deal with them.
Conclusion on Vemma – Scam or Good Business Opportunity?
Whether Vemma’s business opportunity is good or not is all matter of one’s opinion. Some people thrive in mlm environments like this and make a lot of money but as I said most will fail.
I stay away from mlm’s for this very reason. If you are going to pursue this biz opp then just be realistic and know what you are getting yourself into.
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Questions, comments, concerns? Leave them below in the comment section and I’ll get back to you soon ?