Vemma Nutrition temporarily shut down

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adge1475
adge1475 Posts: 77 Member
in Health and Weight Loss
Anybody else check this out yet? Vemma Nutrition, a MLM that sells "nutritional drinks" has been shut down by the FTC for operating a pyramid scheme. Chris Powell from Extreme Weight Loss was one of their promoters.

I wonder if this'll set some sort of precedent for punishing similar companies. Thoughts?

cnbc.com/2015/08/27/ftc-vemma-shut-down-for-running-pyramid-scheme.html

Replies

  • bpetrosky
    bpetrosky Posts: 3,911 Member
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    God I hope so! Isagenix, Beachbody, and Advocare should be next.
  • 970Mikaela1
    970Mikaela1 Posts: 2,013 Member
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    Everybody is gonna have to go black market for it now. Hey bro you got any of that stuff? I'm in a bad bad way:(
  • janejellyroll
    janejellyroll Posts: 25,763 Member
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    GuitarJerry wrote: »
    Why? Are MLM's illegal? I don't understand.

    MLMs aren't. Pyramid schemes are.
  • janejellyroll
    janejellyroll Posts: 25,763 Member
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    GuitarJerry wrote: »
    janejellyroll wrote: »
    GuitarJerry wrote: »
    Why? Are MLM's illegal? I don't understand.

    MLMs aren't. Pyramid schemes are.

    Same thing?

    I don't believe anyone asserted they were the same thing. If you're asking OP why Vemma was shut down temporarily, it's because they are accused of operating a pyramid scheme (not for being an MLM). As a practical point, many pyramid schemes are MLMs -- but in the US, MLMs are legal.
  • adge1475
    adge1475 Posts: 77 Member
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    janejellyroll wrote: »
    GuitarJerry wrote: »
    janejellyroll wrote: »
    GuitarJerry wrote: »
    Why? Are MLM's illegal? I don't understand.

    MLMs aren't. Pyramid schemes are.

    Same thing?

    I don't believe anyone asserted they were the same thing. If you're asking OP why Vemma was shut down temporarily, it's because they are accused of operating a pyramid scheme (not for being an MLM). As a practical point, many pyramid schemes are MLMs -- but in the US, MLMs are legal.

    Right. Vemma happens to be both an MLM, and was found to be operating a pyramid scheme. MLM's themselves are not illegal, but they way they're set up is often associated with pyramid schemes. This just happened to be one that, well, actually was. Thanks, @janejellyroll
  • jgnatca
    jgnatca Posts: 14,464 Member
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    Pyramid scheme:
    pyramid-scheme-graphic.jpg

    MLM:
    "Multi-Level Marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant's "downline", and can provide multiple levels of compensation."

    doterra-scam.jpg

    One big difference is that there must be a genuine product involved in a MLM. I wonder also if the founders of Vemma were profiting from every sale. That might have pushed them over the edge in to pyramid scam.
  • vivmom2014
    vivmom2014 Posts: 1,647 Member
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    My first thought is that guy Chris Powell = nails on a chalkboard. [shudder]
  • nordlead2005
    nordlead2005 Posts: 1,303 Member
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    GuitarJerry wrote: »
    Why? Are MLM's illegal? I don't understand.

    A MLM is legal because they are selling an actual product. Very few MLM's are legitimate in my eye though.

    Many pyramid schemes disguise themselves as MLM's so they don't get busted, but the real goal is to sign people up for the pyramid scheme, not sell an actual product. My brother-in-law is big into MLM's and rarely if ever tries to sell a product, and instead spends most his time telling you how much money you can make.
  • ninerbuff
    ninerbuff Posts: 48,618 Member
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    What most people don't understand about MLM's is that the products usually sold are likely lower in quality than comparative products on the market, but sold at 2-3 times the price. The MLM company starts making up exaggerated claims of their product being more effective and having more ingredients, etc. to bolster and justify the price, when in truth the price is because money changes hands with not just one person, but with up to many as 4.
    Also the people that apparently "support" you are the ones who are profiting off you because as long as you buy product as a "distributor" (even at a discounted price), everyone upline is getting paid.
    A $4 dollar shake (costing say 75 cents to manufacture), gets divided up with EX: $1 to your sponsor, another .50 cents to his sponsor, and another .25 cents to his sponsor and the rest to the company. May not seem like a lot to the "sponsors", but if you have 100 people under you and are making .25 cents per shake, 2x a day, that's $50 a day ($1500 a month) for not doing anything, but being above one of your first clients. Add on 4 clients doing the same and that's $7500 a month from people drinking shakes they didn't even sell (autoship isn't selling, but a requirement to keep good standings as a distributor and to get discount).
    So really, who's supporting whom?

    A.C.E. Certified Personal and Group Fitness Trainer
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    Been in fitness for 30 years and have studied kinesiology and nutrition
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  • jkal1979
    jkal1979 Posts: 1,896 Member
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    I'm always leery of any product where there is more pressure for you to sell it than there is to purchase it. I first ran into this when a friend of mine was selling beauty products. She had no interest in selling anything to me, she just wanted me to join her team. I went to one meeting she invited me to and most of what they talked about was recruiting others. I noticed the same thing with Beachbody. Another friend was pushing the coaching more than she was the overpriced shakes.

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