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Vemma is a pyramid scheme that targets college students with promises of getting rich quick.
Are you a victim of Vemma looking to find out what has happened to this mlm company?
Hello and welcome to our mlm review Coffee Talk.
Many college students joined Vemma opportunity hoping to achieve their life dream of financial freedom.
But in the end, Vemma was a pyramid scheme and a scam.
If you are interested to learn why Vemma is a pyramid scheme, you have come to the right place.
In this Vemma review, I am going to share with you the truth about the Vemma home-based mlm business opportunity.
I will discuss:
- Why Vemma was a pyramid scheme, a scam?
- The marketing scheme to recruit others.
- The cost to remain as a Vemma affiliate.
- The way affiliate made money under the Vemma pyramid scheme.
After reading this Vemma reviews, you should be able to understand why the FTC shut down Vemma for operating a pyramid scheme.
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Vemma Reviews Summary
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What Is Vemma?
Vemma is a pyramid scheme that promotes and sells nutrition products through an mlm network of independent distributors.
Vemma was launched in 2004 by Benson Boreyko, Lauren Boreyko, and Karen Boreyko based in Tempe, Arizona.
Vemma business strategies were recruiting college students and unemployed youths. This recruiting tactic allowed Vemma to generate over $221 million in sales revenue in 2013.
Vemma promoted the mlm business opportunity by telling recruits that they could make up to $50,000 per week selling the company nutrition products.
The company required a $600 initial investment and a $150 monthly product order to earn the commission.
Vemma focused on recruiting instead of helping recruits selling products.
Many recruits incurred heavy debts which lead to over 170 complaints filed with the Federal Trade Commission (FTC).
The FTC filed a lawsuit in 2015 accused Vemma of operating a pyramid scheme.
Vemma settled with the FTC paying a $238 million fine in 2016 and agreed to stop using the recruiting practice.
The settlement was effectively shut down Vemma because the company primary sales revenue was generated from selling products to distributors.
Bode Pro purchased Vemma through an asset sale in 2019.
How To Join Vemma?
Vemma focused heavily on recruiting college students and unemployed youths.
Vemma distributors held meeting events on college campuses to recruiting students promising a get-rich-quick opportunity, earning up to $50,000 a week.
But to join the business opportunity and earn the commission, recruits must be active and qualified.
Active and qualify required distributors to place a monthly minimum product order, which I’ll discuss more in the next section of this Vemma reviews.
How Much Does It Cost To Join Vemma?
The initial cost to join Vemma is $600 to purchase a Business Kit, which contains marketing materials and Vemma products.
A $19.95 annual renewal fee was required to remain as a distributor.
But to start earning the commission, you must a qualified distributor.
Vemma requires all distributors to maintain a monthly order of $150 to qualify for the commission:
Vemma is a Pay and Play business opportunity. If you want to earn, you have to pay.
The monthly qualified purchase became a burden to many distributors because they could not resell the products.
As a result, most Vemma distributors were unable to make money with Vemma.
Every mlm opportunity has a monthly sale quota requirement.
Do you know why Vemma has this monthly purchased requirement?
Well, to sell products and to avoid being classified as a pyramid scheme under the FTC guideline. (Check our discussion on the FTC MLM Guideline.)
Other home-based businesses, such as Affiliate Marketing, you earn the commission on every sale, no need to be active and qualified.
Vemma Compensation Plan
The FTC took action against Vemma based on its compensation plan.
The Vemma compensation plan was designed as a pyramid scheme, not a legit business.
I’ll provide a quick overview of the Vemma compensation plan. To see it in detail, just download a copy.
Like most mlms, Vemma offers you two options to earn: Sell Vemma Products and/or recruiting others to become a distributor.
Make Money Selling Vemma Products
Vemma distributors earn a retail profit by purchasing the products at a wholesale price to resell.
Distributors could also direct customers to purchase from their Vemma replicated website to receive a 20% commission.
This sounds easy to make money, right?
Well, according to the FTC, distributors were unable to resell the overpriced products, and Vemma did nothing to help.
Vemma was only interested in recruiting more people, not selling products.
Overprice is the reason you will have a hard time selling Vemma products.
Make Money Recruiting Distributors
When you cannot sell products, the only option to make money with Vemma was recruiting.
But you must be a qualified distributor to receive recruiting bonuses and commissions.
Another difficulty level was added to the Vemma compensation plan, the Binary system.
Binary means you must build two teams, the right and the left, to earn commissions.
Binary compensation is considered one of the most difficult to make money in the mlm business.
Once you had met the two conditions above, below are the options for you to make money.
You earn a 10% or 15% team bonus when both of your teams, right and left, achieved $150 purchase volume.
This team bonus made Vemma a pyramid scheme.
Here’s how this work.
Recruited two people that have to purchase $150 each month to remain qualified and you earn a 10% commission, $15 each week.
Recruited four people with a $150 per month order each and you earn a 15% commission, $22.50 each week.
There are other leadership bonuses and commissions which require more purchases to qualify. Please refer to the compensation plan for more information.
Essentially, the distributors or team members purchase more overpriced products to earn more commissions.
Can you see the scheme?
Vemma said that there were multiple ways to earn. But in reality, there was only one way, recruiting people into the program.
When you recruit people to join as a Vemma distributor, that person has to purchase $150 each month to qualify for the commission. You will earn 10% or 15% on this sale.
Under the Vemma compensation plan, no distributor was interested in selling the product. Recruiting was the best way to make money.
This is how mlm works. Ways to earn is not the same as qualifying to receive the money.
Can You Make Money With Vemma?
Yes, a small group at the top did make a lot of money with Vemma.
According to Vemma 2014 income disclosure statement, 7.32% of distributors earned a total $5,556,157.
These top distributors were friends and families of the founders.
This is the problem with the pyramid. A small group at the top of the pyramid make all the money while over 99% earn nothing.
The FTC considered Vemma as a pyramid scheme as follows:
- Vemma rewarded distributors to recruit more people, not selling the product.
- Distributors with the largest team make the most money, the top of the pyramid.
Is Vemma A Scam?
Since Vemma was a pyramid scheme, Vemma Nutrition Company is a scam.
Vemma used the mlm business opportunity to operate a scam.
Vemma scammed thousands of young distributors into purchasing products that they did not want or need with the hope of getting rich.
Vemma was able to pull off this scam because they knew that young people are naïve.
Most young people join mlm opportunity without doing any research, study, or investigate the company.
If you become an mlm distributor without asking questions or doing the proper researches, then you are a good target for scammers.
Reading our mlm opportunity reviews is one way to learn the risks and rewards associated with mlm opportunities.
Many entrepreneurs hire professional financial analysts to evaluate mlm business profitability and loss before investing.
As an owner of an Online Business Review, I have evaluated hundreds of mlm businesses to help investors identified and managed the risks.
Vemma is a scam, not a business opportunity.
Is Vemma A Pyramid Scheme?
Vemma denied that they were operating a pyramid scheme until the FTC went after them.
In 2015 the FTC filed a lawsuit accused Vemma of operating a pyramid scheme
and put the company out of business in 2016.
The FTC found Vemma to be a pyramid scheme based on the company compensation plan, which distributors were forced to purchase overpriced products to earn the commission.
The only way to sell Vemma products was by recruiting others to join the business.
The more people that you bring in, the more money you make.
Distributors were the primary customers of this Vemma product.
This makes Vemma a pyramid scheme.
Is Vemma Worth It?
Most people join an mlm opportunity, like Vemma, because they believe and love the products.
Now, you know why mlm companies always make outrageous claims about their products, especially healing cancer or other terminal illness.
Mlm companies make false and misleading claims to recruit people. They are using the business opportunity to force their distributors to purchase useless products.
If you are searching for a business opportunity to create wealth, I am telling you don’t waste your time and money with this mlm.
However, the decision to join mlm is yours to make.
Can I ask you this?
Do you know why you want to start a home-based business?
To earn extra money from home, to be your own boss, or to achieve financial freedom?
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Do you know what happens to Vemma distributors when the FTC shut down the company?
They lost everything. All their hard work disappeared overnight and nothing you could do.
With mlm opportunity, you have zero control over your business.
Starting a business is a long-term investment. You want to build a system that generates money far into the future. Isn’t this the #1 reason you want to build a successful business?
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Vemma is a pyramid. But the founders still make a lot of money.
The company was sold to Bode Pro in 2019.
The founders probably made millions from this sale.
The young distributors are the one that lost money.
I hope this Vemma review provided you with enough information to see why mlms are a pyramid scheme.
Thank you for participating in our Vemma review discussion.
Until next time.
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