What Is Vemma? And How Is It Changing Network Marketing As We Know It?

by Lawrence Tam

What is Vemma?

• a company that makes nutritional products, especially vitamin and energy drinks

• “converting itself from a network marketing company to an affiliate marketing company”

“In April, 2014, the company announced that it was … removing sign-up fees and the $150 minimum monthly product purchase to qualify for commission…. to avoid the fallout from the Federal Trade Commission that has happened to other multi-level marketing companies, such as Herbalife.” Wikipedia

network marketing

termsVemma

affiliate marketing

terms

network marketing terms Vemma affiliate marketing terms

• “To be more like Amazon.com and less like Amway”

• “To give our potential customers and Affiliates a better, more modern and transparent description of how we do business.”

• “now everyone … must first join as a customer, and there is now no requirement to personally purchase product in order to earn bonuses.”

A Lawyer’s View• Amazon is not a member of the Direct

Selling Association• Amazon does not terminate its affiliates for

promoting other MLMs• Amazon does not bind its affiliates to non-

solicitation clauses • Amazon does not have monthly volume

requirements• Amazon has no opportunity for recruitment

What is Vemma’s Affiliate Structure Like?

Vemma’s compensation plan is very similar to an affiliate marketing structure:• no set-up fees• no purchasing a product in order to sell it • no renewal fees• You get an ecommerce website • no additional fees to access it as an affiliate• a free mobile app to helps you manage and

promote your Vemma affiliate business.

Boreyko says that Vemma has several advantages over Amazon

Vemma is: • branded• global • keeping up with technological trends, especially

in websites, social media and mobile apps. • has a dedicated force of affiliates, that love the

brand and can reach people that other affiliate programs cannot

In Vemma…An Affiliate is a person who:• Purchased an Affiliate Pack at the time of

enrollment• Enrolls a Customer or an AffiliateA Customer is a person who:• Purchases product for themselves only• Has not enrolled another Customer or Affiliate

Although customers can stay in customer status, and not upgrade to affiliates, they can still earn benefits if they refer other customers into Vemma and those other customers purchase the products under their account. It is called the New Customer Bonus (formerly called the Fast Start Bonus). These are credits to buy more products

Network Marketing

Network Marketing (Multi-Marketing) is a marketing strategy in which people who are involved with the company are compensated not only for sales they make, but also for the sales of the other people involved in the same company, that they personally recruit, A.K.A their downline.

• Commissions are passed up from your downline on sales they make.

• Your sales are passed up your upline. • When the company pressures recruits to recruit more

people, rather than sell the products, this is considered an illegal pyramid scheme.

The FTC says: “If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”

Affiliate Marketing

• Affiliate marketing pays commissions to an affiliate who brings a prospect who purchases a product or service. The affiliate gets a cut of that sale. The affiliate spends their own time/money to earn that commission.

• Generally an affiliate does not have to purchase the product in order to make a commission.

• Affiliate marketing is great to use online. Generally, you are selling a product, you earn the commission and the transaction is done.

Title

• Content

Courtesy of Jack Media

Title

Courtesy of Jack Media

The DifferenceNetwork

marketing

relationship marketing

levels of compensation

selling vitamin drinks to your friends is network marketing

Affiliate marketing

online marketing (Pay-per click, search engine optimization,

email lists, blogs, etc.)

purely sales

generally no different levels

selling products through Amazon is affiliate marketing

Vemma US Income Disclosure 2013

It might be said that Vemma is still a network marketing, MLM company; changing the wording does not change what they are.

What is Vemma trying to accomplish?

An article in the New York Post (by michelle celarier) reveals what MLM companies require people to buy initially and on auto-ship. The MLM companies are the ones that have the most benefit, while very few people in sales actually make a profit or even break even

Are Vemma are just eliminating the requirements to buy products or services?

Conclusions?

• What do you think about Vemma declaring themselves an affiliate marketing program and not an MLM?

• Is it for more transparency or just a way to dodge the FTC legally?

• It this good for the Network Marketing industry as a whole?

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by Lawrence Tam