Vemma Update – The Sad Part and Implications?

vemma updateLooking for a VEMMA update? Here is a quick update on Vemma – a seemingly legitimate MLM company who recently ran into trouble with the Federal Trade Commission in the United States:

What happened?

Although the actual contents of the complaints will obviously not be available to the general public, the basic problem the FTC has with VEMMA is this:

1. Their marketing practices involve promising people high incomes if they join.

This in itself is against FTC regulations. In terms of advertising standards and business practice, you are not allowed to make claims you cannot substantiate.

The sad fact is that most people who get into MLM or network marketing have no idea what they are getting into, and as such the result is that most of them don’t make much money.

Ironically, it is exactly these unethical marketing tactics that attract the wrong prospects in the first place. As such, there is some merit in the FTC ruling that people who have little chance of success are lured into the VEMMA opportunity by means of false promises.

2. The fact that the VEMMA direct sales income is about 20% of their total income, means that people are joining for the opportunity, and the product itself is in the background.

This is a very “grey” area, and allows for much subjectivity of opinion. On the one hand, there is a physical product, and it is being sold. On the other hand, most of the product sales come from auto-shipping (compulsory monthly orders) to affiliates.

And due to the fact that most of their affiliates don’t make much, they don’t stay for too long, and on paper it seems as if more money is derived from recruitment than from direct product sales. Read=> Vemma Business: The Scary Facts You May Want To Know

Vemma Update – The Verdict:

The FTC took VEMMA to court, and argued that this seemingly legitimate MLM opportunity is a thinly disguised pyramid scheme. The court agreed, and shut down the operation while the FTC is allowed to investigate.

More info here: FTC Acts to Halt Vemma as Alleged Pyramid Scheme

VEMMA management fought hard to remain in operation, but the court would not have any of it. The judge is of the opinion that the FTC has a good chance of proving their points, so VEMMA remains closed. The case received a lot of publicity (even featured on Forbes), and later in September it all went quiet…

VEMMA update – The implications:

What does this vemma update mean to you? How could this affect network marketing as an industry?

1. Others will probably follow. In other words, we are likely to see more companies being shut down – if the FTC wins this one.

NOTE: VERY important – please read my post on Legitimate MLM/How To Identify a Legitimate Network Marketing and Pyramid Scheme. You will note I feel quite strongly that the product has to be worth its price, and that it should be something you would be willing to buy even if there was no opportunity attached to it. Obviously this was not the case with VEMMA.

2. Bad marketing and advertising practices will be scrutinized in the future. Making ridiculous and/or misleading promises just to be able to recruit people is going to come under the spotlight, and it is likely to cause trouble for a lot of people over the next few years.

That is, in fact, a good thing. People engaging in shady marketing practices is what has given our industry a bad name, so in the long run it will help those of us who do things right.

3. The sad part, however, is that many people who worked really hard to build their teams and their incomes from VEMMA are likely to lose that income.

To make things worse, on this recent Vemma update, I suspect a number of the people in their downlines will just choose to walk away from MLM as a concept, and will not be willing to start building a team for another network marketing company.

Keep in mind that, while some people did things the wring way, there are many people who worked their backsides off and spent lots of money to build their businesses.

Vemma update – where does it leave YOU?

Regardless of which company you are promoting, it might be a good time to step back, and take a good look at everything. Are you stuck in a pyramid scheme?

If you are, then maybe you should start moving your income (and your team) to a company that does things right – before you also lose everything like the folks caught in the middle of this mess. 
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