Watkins... a scam or not?

[Lisa]

For Watkins part of their pay is based on recruiting, however it seems like for most people in Watkins their money is made selling the actual products. I've used some of their products, I picked them up from WalMart. I do like to cook and have used their vanilla, curry powder and cinnamon. In my personal opinion, the products that I have used were worth the money I spent. My favorite is the curry powder because it's not too terribly spicy but isn't as sweet as some other curry powders.

I also found out that they've ended their contract with WalMart and have been phasing out the selling of their products there.

So what do you think... scam or not? Is there maybe a middle ground on it?

[Porkchop Express]

Are you talking about J.R. Watkins? If so, then the first thing I see when googling this is "business opportunity", so it's already not looking so hot. I'll check it out, however.

[Wizzard7]

Watkins products were all my Grandmother would use, so that says a lot about the quality. They are still around, and you can order online. It reminds me of when my older brother was a Fuller Brush salesman, similar approaches, I suppose. But the main qualifier (at least for me) is that they have a legitimate product to sell, quite unlike a lot of the other "opportunities" offered on the net that are solely funded by recruitment.

While I am not a big fan of MLM's, it seems Watkins is a real business have been around since the 1890's. But then, what does one really do to differentiate between a scam and a real network marketing company; it seems both can be scams or not...

[Lisa]

Are you talking about J.R. Watkins? If so, then the first thing I see when googling this is "business opportunity", so it's already not looking so hot. I'll check it out, however.

Yep, J.R. Watkins. They do have recruiting available. It kind of reminds me of companies like Tupperware and Avon where they have a legitimate products to sell that aren't extremely overpriced. If you like to cook, a lot of their spices and other cooking extra's are definitely high quality. I have a cheap thing of curry powder in my cupboard as well as the Watkins curry powder. I used the cheap one in a casserole a few days ago and it tasted awful (my husband agreed). If we had never actually used the Watkins curry powder then I doubt we'd know just how awful the cheap one was.

One other thing I've found, I actually have some information on The Summit Group which is a recruiting group based on Watkin's products. For them it seems like their main focus is recruiting. It seems like actual Watkins is more concerned with selling product than recruiting though. They allow their reps to do fairs and farmer markets, however I know a couple of people (through other message boards) that only take a very small inventory to a farmer's market then take orders for products they don't have there and still do decent. Apparently they sit out there with some of their mixes already made so people can eat some of the food and try it out. (Kind of like a Pampered Chef show.) I'm not big on companies that tell people they should carry a big inventory, and I haven't seen much of that with Watkins.

[Zapticon]

I think the main difference between Watkins and many other MLM-companies is that the company started out in 1885 (http://en.wikipedia.org/wiki/Watkins_Incorporated), before the birth of the MLM-concept, probably meaning that they have picked up this business model to earn more, but still sell their products "their way" meaning through Walmart for instance.

Here (http://www.youtube.com/watch?v=lIKxmCp_fho) is actually an inspiring story of a sales man for Watkins with cerebral palsy doing a magnificent job selling products. Now I don't usually think much of door-to-door-sellers, but this guy has some percistense :).

[therockroad]

Lisa,

Just want to make something clear about the Watkins pay plan. All income earned in Watkins is based on selling products either by the consultant and his team of consultants. No income is earned simply by recruiting, 100% of the Watkins membership fee of $39.95 goes directly to Watkins. You can have a team of 500 people but if they have $0 in sales, you will earn $0 in income on your team. Having a large team helps you earn income as the sponsor you earn 5-10% of the sales of your team. But without products being sold, there is no income to be earned in Watkins. Watkins makes the highest quality of products because the products are the company and it is in selling products Watkins earns income and the consultants earn income.

[therockroad]

Are you talking about J.R. Watkins? If so, then the first thing I see when googling this is "business opportunity", so it's already not looking so hot. I'll check it out, however.

I don't understand how Watkins having a business opportunity alarms you. Watkins was founded in 1868 by J.R. Watkins who sold pain relieving liniment from his home in Minnesota. He was selling it himself throughout Minnesota and then decided that he could sell more by hiring dealers to sell his products, hence the birth of the "Watkins Man" and the direct sales side of Watkins. My great grandfather was a Watkins man in the horse and wagon days of the business.

Watkins has been offering a direct sales opportunity for over 140 years, with 300 products now including the original product, red liniment. In 1979, Watkins added a MLM compensation plan that added to direct sales commissions the ability to earn bonus income from team building. The direct seller can earn up to 39% of the retail price of products sold, so there are people who focus solely on direct sales and do not get involved in sponsoring. There are also a good portion of people that join Watkins just to be a "discount customer" and get 25% off all the products.

[littleroundman]

Let's be very clear here.

There is a vast difference between Watkins and The Summit Group.

Watkins is, as you say, a legitimate and long established, sales based direct selling company.

HOWEVER,

the Summit Group is quite another kettle of fish.

Based on its' own emphasis on "non sales" and encouragement of recruitment based marketing as shown in these two examples:

http://i270.photobucket.com/albums/jj119/LITTLE_ROUND_MAN/summit1_zpsc2d2dec5.jpg

Summit Group marketer "Christine" (http://www.christene-marketing.com/2013/08/watkins-and-summit-group-review.html)

http://i270.photobucket.com/albums/jj119/LITTLE_ROUND_MAN/summit2_zpsa38e373a.jpg

Summit Groups' "itsworkfromhome" website (http://itsworkfromhome.com/)

You can't have it both ways.

MLMs with an emphasis on recruiting are both illegal and an almost guaranteed way for consumers to lose their money, because they simply don't work in the long run.

[therockroad]

Littleroundman,

The Summit Group is just emphasizing the network marketing structure of Watkins. Recruiting 5,000 team members with nobody selling or buying products will get you a check for $0 every month in Watkins. Unless products leave the distribution center in Minnesota nobody makes money.

The above examples from The Summit Group emphasize team building and personal use of the products in essence the consultant being their best customer, Watkins sells over 300 products many that people use everyday so rather than shopping at Walmart for laundry detergent, vitamins, hand lotions, etc. the Summit Group model is to buy these items from your Watkins business and encourage other people to join your team too and buy their grocery items with their consultant discount. So the Summit Group model still is based on Watkins direct sales model but rather than going door-to-door or setting up a booth at the flea market, the sales each month are generated from personal use of the products.

There are MLMs that pay for recruits but as I said the only income earned in Watkins is from sale of products. 100% of the membership fee to join goes to Watkins so there is no advantage to recruiting unless people are selling the products to themselves or to others.

[littleroundman]

"by using the team building approach that does not focus on selling products, earn six figure incomes"

If Watkins, therockroad and / or The Summit group want to use that sort of language to attract new recruits, good luck to them

However, by doing so, it puts them smack bang in the middle of the countless pyramid / endless chain recruiting schemes against which genuine MLMers speak out.

Forget about the legality or The Summit Groups' "spin doctors" weasel words, by emphasizing "NOT" selling products and "six figure incomes" in the same sentence you and they are removing any doubt as to the legitimacy of the Watkins "opportunity"

Fair enough, if that's what you want to be seen as, go for it.

You can't have it both ways.

If Watkins wants to be seen as a legitimate, product based direct sales organization, then it would take steps to ensure that is the ONLY image it projects to the public at large.

No ifs or buts, transparently product focused or its' just another pyramid / endless chain recruitment get-rich-quick scheme deserving of every bit of negative comment it attracts.

[Whip]

If watkins was making money actually selling products, they wouldn't need a recruiting scheme. It's a slap in the face to the hard working people who are legitimate sellers that don't want/need to recruit. Their area can now be overrun by the recruited who think they are going to make money. But the territory has effectively been cut by at least half, if not more, so everyone makes less and the person who was successful there now has to struggle for no reason but greed of some scumbag who doesn't want to sell or work. I guess if you watched the movie Door to Door with William H Macy, the writing was on the wall.

[therockroad]

littleroundman,

I don't understand your anger over The Summit Group emphasizing one of the most basic part of network marketing, sponsoring people into the business. The above statement is true that there are people that through recruiting a large team are earning six figure incomes and they are buying products/selling products to themselves and encouraging their teams to do the same.

Watkins is a diverse company with people successful in direct sales doing home parties, flea markets, online sales, trade shows, catalog distribution, wholesaling to mom and pop stores, doing cooking demos, state fairs and even some still doing door-to-door. Though Watkins is a direct sales company with a network marketing compensation plan most people in Watkins are direct salespeople that just happen to be in a MLM structure. Watkins Corporate primarily focuses in their training on direct sales and the network marketing side is secondary.

The "No Selling" concept is to help people that are not looking to go door-to-door or have home parties every week to look at the business and as I said before income at Watkins is earned on sales and not on recruiting. Whether I sell $500 in products at the local farmers market or if I purchase $500 in products for my family to use, there still was $500 in products sold by me as a consultant and $500 in products that UPS picked up at Watkins distribution center.

[therockroad]

Whip,

Watkins is a direct sales network marketing business and having people recruited into the business is basic to the model. Watkins products are almost exclusively sold by Watkins consultants so without more people out sharing the products and business products aren't sold and Watkins does not make money. The great thing with Watkins is that territories really don't matter because there are so many ways to market products you could have a Watkins consultant as a next door neighbor and both be successful, you doing home parties and your neighbor selling at local farmers markets. As said before if someone does not sell Watkins products to themselves or other people they earn $0, so the successful person mentioned in your post could have 50 people not selling in their neighborhood and if he is selling he will make money and the 50 not selling will make nothing.

[ribshaw]

there are people that through recruiting a large team are earning six figure incomes

Welcome to the site rockoad. One thing that would be nice if you don't mind would be to post an income disclosure so folks could see what percentage of distributors are making six figures. That is sort of being tossed around. While I don't doubt there are people who make that much money, the numbers do matter. Is it 1% of the sales force or is it 50%, as with a lot of things in life I am guessing it takes a bit more than a little shoe leather and a Zig Zigler cassette to earn something with five zeros.






There are also a good portion of people that join Watkins just to be a "discount customer" and get 25% off all the products.


Whether I sell $500 in products at the local farmers market or if I purchase $500 in products for my family to use, there still was $500 in products sold by me as a consultant and $500 in products that UPS picked up at Watkins distribution center.

While my thought here is not original, it bears repeating. If someone likes the products then there would be NO reason for them not to join and get a discount. At that point the "discount" has to come from somewhere. The person who was an affiliate's customer is now in their downline. Instead of $500 coming into the pipeline $375(75% X$500) is now coming in, which hardly seems like a boon for the salesperson.(Unless you have a new kind of math that I am unaware of.) (Assuming the former customer has no desire to recruit, just use the product.)

Stepping that up to the next level assuming $1,000,000 of sales comes in total in any one group. The person at the top with a bunch of recruits makes a ton of money, and most of the people at the bottom very little. There is no other possible outcome, $1million is not $2million, it is not Six Figs for all. This is why the earnings statement is so important, so we can take this beyond speculation.

I bought some of the Foot Cream once and asked the girlfriend to rub it on my feet. She told me to go to hell, but it seems like a quality product. I don't know that I need $500 a month, apparently even $9 is too much to ask in my house. It is the model that seems suspect to me when mentioning large incomes.

[littleroundman]

littleroundman,

I don't understand your anger over The Summit Group emphasizing one of the most basic part of network marketing, sponsoring people into the business.

You obviously don't understand if you think I'm in the least bit "angry"

As ribshaw says, post the income statements and we can go from there.

[therockroad]

littleroundman,

Ok angry may be wrong unnerved may of been better. It seems that you have never heard of sponsoring people as part of a network marketing program.

it is amazing how this one phrase written by this person named christene that is not a Watkins associate as far as I can tell. It is interesting that the whole statement was not commented on:

How Much Can I Earn?

Depends on you. They have a wide variety of Associates - some do not earn anything - just enjoy using the products at the dealer Discount. Some are part time earning a few hundred per month - but the most successful Associates, by using the team building approach that does not focus on selling products, earn six figure incomes. It depends on you and the business approach you choose.

You will earn 25% to 39% on everything you sell and 5% to 10% bonus commission on your team member’s activity.

All this statement is saying is that the most successful Associates make 6 figure incomes and this is true. This is more of a goal like saying to a new car dealer that the most successful car dealers can earn 6 figure salaries or a football coach telling his star quarterback that the most successful NFL quarterbacks make over $15 million a year.

Most people join Watkins to buy products for their own use at 25% off and therefore "earn" money in cost savings. Many do some selling for part time income and enjoyment. There are those who have devoted 20+ years to building their business through sales, team building and training that make 6 figure incomes.

[littleroundman]

littleroundman,

Ok angry may be wrong unnerved may of been better. It seems that you have never heard of sponsoring people as part of a network marketing program.

Here we go again with imposing your own values on someone else and using weasel words such as "seems"

I am in no way "upset" or "angry" or "unnerved" or any other descriptive you'd like to throw into the conversation.

As a matter of fact, I'm a long time admirer of the DIRECT SELLING organization, Watkins.

HOWEVER, having said that, I'm also highly critical of the smarties who have bastardized the Watkins name and message and are turning it into nothing more than just "another" get-rich-quick, recruitment focused pseudo MLM.

Forget about the legalities of endless chain recruitment schemes and the misleading earnings claims which accompany them.

Prudent potential Watkins direct sales candidates will recognize that once it becomes possible to make the bulk of any income within an MLM company, once six figure "potential earnings" figures are thrown around and once product becomes secondary, the managament of the MLM or DS organization have virtually signed its' death warrant by not stepping in.

Maybe not today, not next month or even next year, but, sooner rather than later, the pyramid WILL collapse, and while the recruiters will simply move on to the next one, the direct selling members will suffer.

[therockroad]

Below is the Income page from the current Summit Group recruiting site:

7347

__________________________________________________ _________________________________________





For the source of the six figure income that is drawn from the average income information that Watkins lists in their training materials:

7348

[therockroad]

I apologize for any judgmental wording.

Watkins is a direct sales company with the opportunity to earn bonus income from the network marketing model. No income is earned outside of selling products so the products are PRIMARY and the selling of products is PRIMARY.

Watkins is not a get-rich-quick scheme and is not promoted that way by Watkins or The Summit Group, those few that have achieved the Gold Executive level have devoted 20-30 years or more to building their businesses through selling products and team building. Though the website that you found mentioned that THE MOST SUCCESSFUL ASSOCIATES MAKE SIX FIGURE INCOMES, this is true of the most successful. The most successful in most businesses earn the most money.

In Watkins there is no income earned unless product is being sold. As I said earlier you can have a team of 5,000 people who don't order products for themselves or sell products to others and you will make $0 every month. No money is earned unless product is sold.

Watkins is a direct selling organization that pays consultants on direct sales (15-39% of retail) and for people that build teams they can earn bonus income on the sales of their team members of 5-10%. So for those doing direct sales they earn up to 39% of their personal direct sales, if they add team members they can earn bonuses of up to 10% of sales by their team.

So rest easy the DIRECT SELLING organization, Watkins is alive and well and is based solely on products being sold by it's consultants.

[ribshaw]

Below is the Income page from the current Summit Group recruiting site:

7349


Thank you for putting up an income disclosure. What it does not tell us is the percentage of total affiliates that are at the Manager, Gold Manager, or Gold Executive levels. At the very bottom in teeny tiny font we can just barely see "A typical participant is a consultant who earns less than $50 per month"

So the typical person of which most of us are is going to gross $50 a month. At some level it is tiring to continue to rehash the same arguments against MLM as a "business opportunity" versus a "buyers club". If someone wants to put extra money in their pocket the typical person would do better statistically speaking with just about anything else. If they want to self consume products and get a discount of some nature then that is what it is.

But the ads promoting this as some sort of panacea to a families financial ills and telling people they don't have to sell, well that is just silly, if not downright dishonest.

Income disclosures are identical for 95%-99% of MLM particpants regardless of company.

Amway

7350

Advocare

7351

Monavie
7352

Veema
7353

[ribshaw]

A few other items, it seems either the company does not have the affiliates back, or they are turning a blind eye to marketing practices that run counter to its own policies and procedures.

So I was going to sign up for an account, but HOLD the phone Charlie.... I can't be my own best customer, teach others to be their own best customers, who teach yet more. It says right here in the agreement I have to sign that to be eligible for commissions 70% of the goods I purchase must be sold RETAIL. WOW, I suppose I could lie, I like to lie. But that really calls into question the ads from the Summit group. In fact it calls into question the whole model, almost as if the company knows something.

7354

Here is part deux that me no likey. I can't talk about income beyond what is in the company literature, but certainly that sort of thing never happens. Additionally, one is signing up as an "Independent Contractor", which means when an affiliate breaks the rules laid out in the T&C, under the bus they go. Thumpa Thumpa.

7355

https://www.jrwatkins.com/account/create-consultant

================================================== =

A little more on "Associate Retailing", suffice it to say this really runs contrary to what the Summit group is selling.

7356


This is sort of nice, they give affiliates some phrases to use. Once again, the Summit group may need a refresher.

7357


The last one is in my opinion very sound advice regardless of the business. If you are using your house or auto for business purposes then they need to be insured as such. Otherwise if you have a business related claim it can be denied.

7358

http://www.homebiz-online.biz/pdf/Compensation_Plan_ENG.pdf

[therockroad]

Ribshaw,

As to income, most Watkins consultants join specifically to buy at the 25% discount because they love the products so then most people are only earning in cost savings. There are also people who join to make some extra income doing home parties or flea markets. There are also people who focus on doing Watkins as a full time business and are doing state fairs, multiple home parties and team building. So there are people who are happy with their favorite products at discounted prices, people happy with a little extra income and those pursuing full time incomes all using the resources of the Watkins company.

As to the sales requirement the consultant can be considered an end consumer. As long as products are bought for the personal use of the consultant and his/her family that meets the requirement. The purpose of this rule is to prohibit someone to buy $5,000 of lip balm in a month that they don't intend to use just to meet an achievement level or win a Lip Balm Sales Contest. All purchases must be for consumption by a consumer and the consultant can be a consumer of Watkins products.

As to the "no selling" it is a matter of letting people know that they don't have to be a door-to-door salesman, which many people think is the Watkins business because they remember the Watkins man like my great grandfather that rode up on his horse and wagon throughout Arkansas selling Watkins products door-to-door. I have heard of new Watkins consultants that went down to their local city hall to check on getting a peddler permit for door-to-door sales, so for those who aren't looking to be a door-to-door salesman we offer them other options to sell products. People can sell to themselves for their personal use.

[ribshaw]

Ribshaw,

As to income, most Watkins consultants join specifically to buy at the 25% discount because they love the products so then most people are only earning in cost savings. There are also people who join to make some extra income doing home parties or flea markets. There are also people who focus on doing Watkins as a full time business and are doing state fairs, multiple home parties and team building. So there are people who are happy with their favorite products at discounted prices, people happy with a little extra income and those pursuing full time incomes all using the resources of the Watkins company.

I get what people do with it. And the expectation of the "Typical Participant" is $50 a month gross as a result of the total combination of those behaviors.


As to the sales requirement the consultant can be considered an end consumer. As long as products are bought for the personal use of the consultant and his/her family that meets the requirement. The purpose of this rule is to prohibit someone to buy $5,000 of lip balm in a month that they don't intend to use just to meet an achievement level or win a Lip Balm Sales Contest. All purchases must be for consumption by a consumer and the consultant can be a consumer of Watkins products.

That is what your upline may be telling you, that IS NOT what this says:
7360

More important is WHY they use this verbiage:

the court threw several obstacles in the way of traditional methods of tying commissions to retail sales.

a. Products Purchased by a Distributor for Personal Consumption do not Qualify as a Retail Sale

The court stated that sales to persons who are participants in the company's compensation program do not qualify as "retail sales" for purposes of satisfying the Koscot test.


The Personal Consumption Dilemma - MLM Attorney Newsletter from Lawyer Grimes & Reese - MLM Attorney Specializing in Multilevel Marketing Law (http://www.mlmlaw.com/saleswatch/omnitrition.html)


I also encourage you to check out this link.

How Pyramid Schemes and Ponzi Schemes are Prosecuted in the US: Do You Know Koscot Test and Howey Test? (http://kschang.hubpages.com/hub/How-Pyramid-Schemes-and-Ponzi-Schemes-are-Prosecuted-in-the-US)
Koscot lost the lawsuit, and the definition FTC created for pyramid scheme became known as the "Koscot Test" (for pyramid schemes). It can be roughly summarized as follows:

The participant makes a payment of money to the company;
In exchange, the participant receives the right to sell a product (or service);
In exchange, the participant receives compensation for recruiting others into the program;
The compensation is unrelated to the sale of products (or services) to the ultimate user.


As to the "no selling" it is a matter of letting people know that they don't have to be a door-to-door salesman, which many people think is the Watkins business because they remember the Watkins man like my great grandfather that rode up on his horse and wagon throughout Arkansas selling Watkins products door-to-door. I have heard of new Watkins consultants that went down to their local city hall to check on getting a peddler permit for door-to-door sales, so for those who aren't looking to be a door-to-door salesman we offer them other options to sell products. People can sell to themselves for their personal use.

Again the "No Selling" is not language approved by the company as seen below. An inquisitive person would ask WHY the discrepancy between what their upline is feeding them, and the reality of what the company has laid out in its T&C, probably drawn up by attorneys, jesss a guess.
7361

[ribshaw]

Ribshaw,

As to the sales requirement the consultant can be considered an end consumer.

Here is some additional reading as you seem like a sincere person trying to do the right thing. It is your business, and I wish you luck.

That said, I would seriously consider who I was listening to, much less repeating in the course of business. In a similar vein, I see a lot of "tax advice" offered by upline leaders that is tantamount to income tax evasion.



Unless this has been overturned by a higher court, or I am completely missing something, it is really not a matter of semantics what "RETAIL" means.

=================================================
The illegality of buyers' club pyramid schemes

It is interesting to note that by promoting and profiting from the BSM business and the "buyer's club" pyramid (where most of the products are bought for the personal use of the "distributors" themselves) Amway would fall within the Sixth Circuit's own definition of an illegal pyramid from the court's opinion in United States v. Gold Unlimited, Inc., 177 F.3d at 479. In affirming the use of a definition that excluded self-consumption of products from the "retail sales" requirements of the landmark Koscot case, the Sixth Circuit endorsed the position taken by the FTC and the Omnitrition court, and specifically pointed out that a basis for the Koscot case was the extensive self-consumption of products by the scheme's participants rather than actual retail customers. Id., 177 F.3d at 480. The court concluded:

Given the district court's instruction that a pyramid exists when a program's rewards relate to recruitment, not product sales, the jury necessarily found the possibility of saturation when it found that the defendants ran a pyramid scheme: "'The presence of this second element, recruitment with rewards unrelated to product sales, is nothing more than an elaborate chain letter device in which individuals who pay a valuable consideration with the expectation of recouping it to some degree via recruitment are bound to be disappointed.'" Omnitrition, 79 F.3d at 781 (quoting Koscot).

Id., 177 F.3d at 481. Indeed, the Sixth Circuit noted that the payment of money that is unrelated to sales of products to retail customers is the sine qua non of an illegal pyramid scheme under the Koscot test. Id. at n6 (citing Omnitrition).

Many other courts have viewed buyers' club-type pyramid schemes in the same manner as the Sixth Circuit, the Western District of Michigan, the Ninth Circuit and the FTC in In re Koscot Interplanetary, Inc., 86 F.T.C. 1106 (1975). As indicated in FTC v. Five Star Auto Club, No. Civ-99-1693, 2000 U.S. Dist. LEXIS 10548 (S.D.N.Y. 2000) and FTC v. Equinox Int'l. Corp., No. CV-S-99-0969-JBR, 1999 U.S. Dist. LEXIS 19866 (D. Nev. 1999), the FTC continues to consider a purported MLM in which most of the products are sold to the "distributors" rather than "retail customers" an illegal pyramid scheme. Id. ("Retail Sales do not include sales made by participants in a prohibited marketing scheme or multi-level marketing program to other participants or recruits in that scheme or program or to such a participants' own accounts").

Nor is this rule new. It was not new when the Ninth Circuit wrote about it in 1996 in Omnitrition. It is clearly the definitive factor in the landmark Koscot case and has been repeatedly applied by courts across the country to shut down schemes that, like Quixtar, involve unenforced retail sales rules and where, as a result, a small portion of the products are sold to retail customers. See e.g. State ex. rel. Webster v. Membership Marketing, 766 S.W.2d 654 (Mo.App. 1989)("The sales representative acquires nothing for resale to an ultimate consumer because the plan depends on that consumer becoming a salesperson himself and, in turn, persuading others to join and participate in the same way. The Amway exemption simply does not apply."); People ex rel. Hatigan v. Dynasty System Corp., 471 N.E.2d 236 (Ill.App. 1984)("The evidence overwhelmingly demonstrates that the primary emphasis is on commissions earned by building a down-line organization. Testimony established that TDSC was represented as a consuming organization and not as a selling organization. Commissions are not dependent upon retail sales to ultimate consumers, but are paid solely upon purchases made by distributors in the participant's down-line organization"); Schrader v. State, 517 A.2d 1139 (Md. App. 1986); State v. Phase II Sysems, Inc., 440 N.Y.S.2d 454 (S.C.N.Y 1981). The explanation from the California Court of Appeals in People v. Bestline Prods., Inc., 61 Cal.App.3d 879 (Cal. App. 1976) is not only typical of how courts have viewed schemes like these, but shows unequivocally, that they have been viewed in this light for decades before Omnitrition:

The Bestline plan, as alleged in the complaint and found by the court, offered compensation for recruitment based upon sales to the recruits. This element of the Bestline plan, which is what makes it a chain scheme under California law, serves to increase the certainty of deception by diverting the effort of all distributors from retail sales to the sales of distributorships. A pyramid sales plan under which the compensation for recruitment is limited to "payment based upon sales made to persons who are not participants in the scheme and who are not purchasing in order to participate in the scheme," does not come within the definition of endless chain schemes set forth in Penal Code section 327. The section, however, declares the policy of this state that such schemes are deceptive when compensation is offered "for introducing one or more additional persons into participation in the scheme" based upon sale to the person introduced. It is on the basis of this policy that participation in such schemes is made criminal.

Pyramid Q & A (http://www.amquix.info/quixtar_pyramid-q-a.html)

[therockroad]

ribshaw,

Thanks for your extensive quoting of information above.

As to the Koscot Test:

The participant makes a payment of money to the company;
In exchange, the participant receives the right to sell a product (or service);
In exchange, the participant receives compensation for recruiting others into the program;
The compensation is unrelated to the sale of products (or services) to the ultimate user.

To be judged a pyramid scheme, the scheme must have all four elements.


Point 1 applies to many business opportunities including Watkins that has a $39.95 startup fee.

Point 2 applies to most business opportunities including Watkins that allow you to purchase products and sell them.

Point 3 does not apply to Watkins because there is no compensation for recruiting, 100% of startup fee goes to Watkins and no commissions or bonuses are paid just for recruiting. Compensation is based on retail sales not recruiting others into Watkins.

Point 4 does not apply to Watkins because income comes from direct commissions for the sale of products or bonus income derived from the sales of sponsored consultants in a team to the ultimate user. Recruiting 5,000 people that have no sales get $0 every month.

[ribshaw]

ribshaw,

Thanks for your extensive quoting of information above.

As to the Koscot Test:

The participant makes a payment of money to the company;
In exchange, the participant receives the right to sell a product (or service);
In exchange, the participant receives compensation for recruiting others into the program;
The compensation is unrelated to the sale of products (or services) to the ultimate user.

To be judged a pyramid scheme, the scheme must have all four elements.


Point 1 applies to many business opportunities including Watkins that has a $39.95 startup fee.

Point 2 applies to most business opportunities including Watkins that allow you to purchase products and sell them.

Point 3 does not apply to Watkins because there is no compensation for recruiting, 100% of startup fee goes to Watkins and no commissions or bonuses are paid just for recruiting. Compensation is based on retail sales not recruiting others into Watkins.

Point 4 does not apply to Watkins because income comes from direct commissions for the sale of products or bonus income derived from the sales of sponsored consultants in a team to the ultimate user. Recruiting 5,000 people that have no sales get $0 every month.

I believe our discussion to this point had been what constitutes "RETAIL" versus "being your own best customer" coupled with some income representations. I don't believe that I used the word "pyramid" or said that Watkins did or did not fail the Koscot test as you are presenting the opportunity.

Point 4 tells me you either did not read what the courts have said on this issue, or you are purposely playing word games. The way you and Summit group presented it as "be your own best customer", and "no selling", violates not only Watkins T&C, but does not pass ANYTHING the courts have ruled on. Unless you can provide a higher court ruling that "self consumption" is somehow "retail" then you are wrong on 4.

Point 3 again we are playing word games within the spirit of the law. What you described, being your "own best customer" is a closed system that does not qualify as retail sales. Perhaps if the only thing being pitched was the $39.95 membership fee I would give this a pass. Or if there was truly 70% retail sales as required by Watkins T&C, but that is NOT the way this is being presented. So the only way anyone is going to make money under the Summit Model is recruiting recruiting recruiting...

Funny you should mention not being paid to recruit, what I have seen from tracking years of MLM is only losers who are not "plugged in" start at the basic level. What of these levels:

7366

Surely there is no compensation paid to the upline for the "winners" who plug in to the program?

It is your business and your industry so how you present it should be of concern to you, not me. Not only is the way this is presented by some a violation of Watkins T&C, it is contrary to what courts have ruled.

[therockroad]

The upgrade assortments are a way for the new consultants to decide how they want to work their business. About 20 years ago it cost about $160 to join Watkins because the membership included a whole kit of catalogs, products, samples, home party invitations, home party forms, training manuals, a satchel to use for door-to-door sales, a Dayplanner and other items, based on the model of doing home parties and/or door-to-door sales. So if someone was not planning on having home parties they were paying for maybe $60 worth of items they were not going to use or if they didn't need a Dayplanner that was another $50 in unneeded items.

So Watkins decided to reduce the membership fee to $39.95 which includes a basic startup kit with catalog and training materials and allows the new consultant to decide what they want for their business. If someone wants to do home parties they can add the Living Naturally Assortment that includes catalogs, home party items, samples and a party plan manual, if they want to get a wide selection of products at an extra discount (30-35% off) they can get the Watkinize Your Home or $200 Gift Certificate for $129. As stated above all are optional.

[trader]

@ ribshaw

Slightly off topic – or maybe not.
Used to think who the retail customer was very easy to figure out.

A retail customer is the end user of the product and pays the sales tax (least in USA). Seamed simple.

Am I missing something?

[ribshaw]

@ ribshaw

Slightly off topic – or maybe not.
Used to think who the retail customer was very easy to figure out.

A retail customer is the end user of the product and pays the sales tax (least in USA). Seamed simple.

Am I missing something?

Actually, I think this is a great point and adds to the discussion on several fronts. Keeping in mind, these are my observations based on my understanding of the law(s), and I am not Judge Judy, although being scolded in her courtroom might put a smile on my face.:RpS_wink:

While "Tax Law" is a good indicator of how someone operates their business, payment of tax does not necessarily make a business legal. For instance under US Tax Law ALL profits are to be taxed, regardless of activity. A drug dealer is supposed to file a return and pay taxes. Second, Tax accounting can be different than accounting using GAAP and that is perfectly acceptable under the law. Both of these things to say, I don't know that compliance with "Tax Law" does or doesn't pass the test under "Pyramid Law".

In CA "Retail sale." Sales And Use Tax Law - Section 6007 (http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutl/6007.html)

A "retail sale" or "sale at retail" means a sale for any purpose other than resale in the regular course of business in the form of tangible personal property.


Under that definition "self consumption" would qualify as a retail sale. The distributor would be required under the law (as I am reading it) to pay the sales tax on their purchase. If the upline/company has Substantial Nexus in the state were the distributor lives, they would be required to collect and submit the tax.

================================================== ===
There are a few items here of interest. I doubt any revenue departments are going to hunt someone down over tax on one box of soap. BUT if an affiliate is doing substantial volume, or taking substantial losses on a tax return, then having their ducks in a row starts to matter.

Retail sales tax legal definition of Retail sales tax. Retail sales tax synonyms by the Free Online Law Dictionary. (http://legal-dictionary.thefreedictionary.com/Retail+sales+tax)

The vast majority of states impose sales taxes on their residents. The only exceptions are Alaska, Delaware, Montana, New Hampshire, and Oregon.

Even if an out-of-state retailer is not required to pay sales taxes within a state, the purchaser is nevertheless required to pay the sales tax on goods and services purchased through the Internet or by mail order.

The U.S. Supreme Court has addressed the issue of states requiring out-of-state retailers to pay sales taxes on several occasions. In Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 97 S. Ct. 1076, 51 L. Ed. 2d 326 (1977), the Court required a showing of a "substantial nexus" between a taxing state and the company providing goods and services before the taxing state can require the company to pay taxes. Without this substantial nexus, a state that taxes an outof-state retailer has violated the Commerce Clause of the U.S. Constitution.

================================================== ===

There is some good information here, some not necessarily germane to the discussion of "retail", but important as I see a lot of BAD tax information passed down from uplines on tax issues.

Retail Industry ATG - Chapter 3: Examination Techniques for Specific Industries (Direct Sellers) (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Retail-Industry-ATG-Chapter-3-Examination-Techniques-for-Specific-Industries-Direct-Sellers)

Like this chestnut:
Some direct sellers erroneously think they can decorate their home with products and deduct the cost as a business expense. To be deductible under IRC Section 162, the expense must be an ordinary and necessary expense paid or incurred in carrying on a trade or business (also see Regulation 1.162-3). Under IRC Section 262, no deduction generally is allowed for personal, living, or family expenses.


All income that is received as a result of direct sales is taxable under IRC Section 61 and should be reported as gross receipts. There is a misconception that if the income is not reported on Form 1099-MISC it is not taxable. Direct sellers may receive income in several different forms, including:

Income from sales - these are payments received from their customers for product purchases.
Commissions, bonuses, or percentages of income received as a result of sales from others who work under them (commonly referred to as their “down-line”).
Prizes and awards received from the selling business, taxable under IRC Section 74.
Income also includes products received as a result of meeting certain sales quotas (for example, receiving all products displayed on the front page of the new catalogue in exchange for selling at a certain level for that month).
Typically, the hostess, not the direct seller, receives gifts. However, gifts received by the direct seller are considered payments to help the direct seller make sales. The fair market value of these gifts must be reported as income under IRC Section 61.

According to this, the INCOME received is taxable whether it is based on commissions from personal purchases, or sales to those outside the network.

It is important to remember that compensation in a direct seller marketing plan is derived primarily from the sale of consumer products to ultimate consumers and users. Ultimate consumers include those direct sellers who purchase products for their personal, family, or household use. No compensation is earned merely from the act of recruiting additional participants to the plan.

================================================== ===

From a TAX standpoint, it is pretty clear to me that if someone earns commission from a sale to themselves for "self consumption" it is taxable. Does that necessarily mean that it qualifies as "RETAIL" to avoid "Pyramid Laws" that is not as clear. It may very well be a question of degree when and IF evaluated by the SEC or FTC.

As most folks know there are laws on the books and standards set by the industry that are all but ignored. Or as previously mentioned in this thread, the company gets affiliates to sign a T&C saying they will comply, and then since they are "independent contractors" they can be easily dismissed as not representing the company.

Amway Safeguard Rules, i.e. "Amway Rules" have 3 rules A (MLM) Skeptic: MLM Dictionary: Amway Safeguard Rules (http://amlmskeptic.blogspot.com/2014/01/mlm-dictionary-amway-safeguard-rules.html)

1) "Ten Retail Sales Rule" -- if you don't make ten sales to ten separate people, you are NOT qualified to earn any downline commissions.

2) "70% rule" -- You have to sell 70% of what you previously ordered before you are allowed to re-order.

3) "Buyback policy" -- Amway will buyback any inventory you want to return within 6 months, at 90% or higher of the price you paid.

================================================== ===

Here is what the DSA a lobbying group for the MLM industry says on on RETAIL.

Compensation must primarily be based on the sale of products and services to the ultimate consumer—whether or not that consumer is also a seller of the products.

Direct Selling Association | The Direct Selling Association Responds to Questions about the Purchase of Products by Direct Salespeople | DSA (http://www.dsa.org/press/press_releases/?fa=view&docID=4950)

This is where many take issue with the DSA and its "Code of Ethics", keeping in mind they have had several members not dismissed by the DSA, but brought to justice by the government. And this is a bit of doublespeak that occurs. As the "own best customer" tends to make a market sound a little bigger and easier than it is to truly make money.

http://www.dsa.org/ethics/legitimatecompanies.pdf

Pyramid schemes take advantage of and defraud people because they:

Promise large earnings with little effort.

Promise that one can earn a substantial income merely for recruiting people into the operation

================================================== ===

I went off in a few directions as I do from time to time., on a day when I have several tax returns I am putting off doing myself. I pulled searches from Amazon and EBAY which are undisputed retail sales in my mind. As for the sales tax issue, the seller would collect the tax or the purchaser is supposed to pay the tax in most states. Best guess, neither of these things are happening in most transactions, not just MLM. So as a legal definition of "retail" I am not sure, but as a "tax" definition clearly.

To do what Herbalife is doing where they run ads teasing of massive work from home income, load people up with $5,000 of virtually unsellable milkshakes, and then repeat. That is a a pyramid, whether they collect sales tax or not. What Summit is doing mentioning large incomes and no selling, is at minimum a violation of the Watkins T&C, the DSA Standards for Pyramids, and is dishonest. 870 sales on EBAY if not massive competition makes me wonder if there is not some inventory loading going on and in that case I would put forth there are groups operating not as "buyers clubs", but illegal pyramids.



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[therockroad]

ribshaw,

Thanks for your contribution above.

As to your last few lines:

What Summit is doing mentioning large incomes and no selling, is at minimum a violation of the Watkins T&C, the DSA Standards for Pyramids, and is dishonest. 870 sales on EBAY if not massive competition makes me wonder if there is not some inventory loading going on and in that case I would put forth there are groups operating not as "buyers clubs", but illegal pyramids.

The mentioning of large incomes was from a 3rd party blog, though it is accurate that the most successful leaders in Watkins make 6 figure incomes as Watkins itself publishes average incomes for various leaders and the average for Gold Executive is $258,000. Being that this is a statement of a company established average income and not a projection it does not violate Watkins policy. As to Summit's current business opportunity site there are no income numbers.

Watkins policy no longer allows consultants to sell on eBay or Amazon, so items sold are either by 3rd parties that purchase products from Watkins or Walmart that they are reselling or for those consultants who were selling on eBay or Amazon before the change that are liquidating merchandise.

[ribshaw]

ribshaw,

Thanks for your contribution above.

As to your last few lines:

What Summit is doing mentioning large incomes and no selling, is at minimum a violation of the Watkins T&C, the DSA Standards for Pyramids, and is dishonest. 870 sales on EBAY if not massive competition makes me wonder if there is not some inventory loading going on and in that case I would put forth there are groups operating not as "buyers clubs", but illegal pyramids.

The mentioning of large incomes was from a 3rd party blog, though it is accurate that the most successful leaders in Watkins make 6 figure incomes as Watkins itself publishes average incomes for various leaders and the average for Gold Executive is $258,000. Being that this is a statement of a company established average income and not a projection it does not violate Watkins policy. As to Summit's current business opportunity site there are no income numbers.

Watkins policy no longer allows consultants to sell on eBay or Amazon, so items sold are either by 3rd parties that purchase products from Watkins or Walmart that they are reselling or for those consultants who were selling on eBay or Amazon before the change that are liquidating merchandise.

Overall here is my thought, then I seriously need to get to taxes or I will be blogging from the prison library. The product that I used seemed to be quality, I remember the foot cream and think I purchased a few other items at Target. If someone "self consumes" and truly likes and uses the product then great. If people sell at flea markets, home shows, house parties, or on the internet, nothing wrong with that. I would fully expect a person's income from selling to be in direct proportion to their skill level and market.

As to the income numbers, I have no doubt they are accurate, in any MLM some people will make massive incomes. The question then becomes HOW they make that money, and can a RECRUIT reasonably expect to make anything similar. I may have 4 tubes of toothpaste at my house from the warehouse club, I don't have 400. As you know with a lot of MLM, folks have garages full product, that ends up on EBAY. (Let's not even start down the tool and seminar money pit) So are the incomes from consumers or people who were puffed up? My suspicion, and it is just that is it could be both. The question then becomes, does Watkins or any other MLM police itself of the bad apples? What I have seen with the industry, the answer is no.

As for "Flipping Walmart", let's not kid each other, I don't know that too many people bought product at Walmart with plans to resell it. My sinking feeling is they were loaded up with product by overzealous uplines and are just trying to get something back out. ANY product based MLM on EBAY almost always has a bunch for sale, and some have company bans on selling. A potential recruit may ask themselves why the ban??

If I were to look around, I might find someone who makes 6 figures a year selling vacuum cleaners door to door. They may even love what they do and can think of no other profession they would have. Most of us would last a few days in that job, and even a skilled salesperson might have problems hitting that number. So is it honest to imply a recruit can make 6 figures selling vacuums? Dunno.

It is a matter of presentation and what I said was "mentioning large incomes and no selling, is at minimum a violation of the Watkins T&C". The likelyhood of "self consuming", getting others to do the same, and earning six figures, less than 1%, if that. That holds true across all MLM, not just Watkins, with an income of $50 a month much more typical. I pretty much am a give people the information and let them decide from there type of person. Summit did disclose that, but at the bottom in small print, but what else is new, virtually every company does similar, so consumers need to be on their toes.

[scratchycat]

ribshaw,

Thanks for your contribution above.

As to your last few lines:

What Summit is doing mentioning large incomes and no selling, is at minimum a violation of the Watkins T&C, the DSA Standards for Pyramids, and is dishonest. 870 sales on EBAY if not massive competition makes me wonder if there is not some inventory loading going on and in that case I would put forth there are groups operating not as "buyers clubs", but illegal pyramids.

The mentioning of large incomes was from a 3rd party blog, though it is accurate that the most successful leaders in Watkins make 6 figure incomes as Watkins itself publishes average incomes for various leaders and the average for Gold Executive is $258,000. Being that this is a statement of a company established average income and not a projection it does not violate Watkins policy. As to Summit's current business opportunity site there are no income numbers.

Watkins policy no longer allows consultants to sell on eBay or Amazon, so items sold are either by 3rd parties that purchase products from Watkins or Walmart that they are reselling or for those consultants who were selling on eBay or Amazon before the change that are liquidating merchandise.

It makes no difference how many ways you try to state this, it can be summed up simply that the long-standing and reliable company of Watkins products is now going to be just another MLM. Then end result does not look good and if you question that, look at the trouble many of the top MLM pyramids are in at present.

[therockroad]

Scratchycat,

No worries about Watkins, it has had a network marketing structure for almost 40 years and has continued to offer the best in products and business opportunity. Watkins is a product focused direct sales company as it has been since J.R. Watkins started the company in 1868 and continues today with the focus on the products (we have about 300 more than J.R. did when he started with our Pain Relieving Liniment (which we still sell and is the pain relieving liniment used by the St. Louis Cardinals).

[littleroundman]

therockroad,

we can go 'round and 'round the mulberry bush all day and half the night discussing what Watkins is, was, should be and was intended to be, the fact remains it has been infiltrated by "The Summit Group" and now contains elements of a get-rich-quick pyramid / endless chain recruiting scheme

If that's what Watkins wants, fair enough.

I'm sure its' recruitment levels will rise, at least in the short term, as the usual suspect get-rich-quickers move in and recruit their little heads off.

HOWEVER, I can guarantee you the hard earned Watkins name and reputation will take a hit as those potential new recruits seeking a sustainable home based business realize they are competing with recruitment oriented get-rich-quickers.

Again, if that is what you / they want, good luck to you all.

[therockroad]

littleroundman,

I don't know where you are getting this "get-rich-quick" idea. Those who are making the upper incomes in Watkins have been working their businesses for 20-30 years or more and they will tell you that. For those seeking a substantial income they need to be willing to work their business for the long haul.

The information that you came across from Christene is not reflective of The Summit Group's current material as referenced in a post on the first page where there is no mention of income amounts.

[therockroad]

littleroundman,

The Summit Group is the name of the team of Watkins consultants under the leadership of a Watkins Executive, like the other teams in Watkins. The Summit Group leaders have nearly 25 years in Watkins and are highly respected in the Watkins business. All The Summit Group is doing is highlighting the network marketing aspect of the Watkins business, which has had a network marketing based bonus program for nearly 40 years.

If someone is looking for a get-rick-quick program Watkins is not for them. If someone needs money today I will be happy to suggest that they go get a job at Walmart or Target. If you want to take the time to build a business through seeing Watkins products get into more homes in USA and Canada and are willing to work your business for the long haul then Watkins is a way to earn income now and build income for the future.

As I have said before there is no benefit to recruiting without products being sold, so someone could signup 5,000 people on their team with no sales and get $0 every month, so those seeking a sustainable home business have nothing to fear. Unless products are being sold there is no income in Watkins. The products are primary and any income is derived from products leaving Watkins distribution center.

[littleroundman]

Perhaps we should take a vote.

Does this look like a dignified, long established, product based direct selling organizations' web page or does it look like just another recruitment based overhyped and misleading Multi Level Marketing companies' website, complete with exaggerated earnings claims and inference of luxury lifestyle ??

http://imageshack.com/a/img203/651/v3kz0.jpg

[ribshaw]

Perhaps we should take a vote.

No selling is ever required!! Still violating Watkins T&C with impunity.

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Does this look like a dignified, long established, product based direct selling organizations' web page or does it look like just another recruitment based overhyped and misleading Multi Level Marketing companies' website, complete with exaggerated earnings claims and inference of luxury lifestyle ??

I would like to see what the math behind $941 per month is if you are up for it Rockroad. Frankly $100 per month seems a bit high for consumer goods each month, unless folks are buying premium. How many people are going to pay $8 for hand cream when they can pay $4, or even $6 if they call themselves a business owner? A buck fiddy in the hole for each tube of lotion factoring in commission seems like a tough hurdle to building wealth.

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The be your own best customer is the model Amway has used for years, and each year 1% make real money, and 99% don't. So 50-100K drop out each year knowing something, despite "better quality concentrated" products they just don't see the value proposition or income claims materialize. In fact, with few exceptions "OBC" is the model for almost every MLM, with a similar income skew.
As soon as I can buy product for less than retail as my own best customer, get the keys for my BMW ready! Until then there are just not that many products that I find worth paying a bunch of levels of commission on the illusion that I will be Living the RV lifestyle with Al Sills.

[therockroad]

littleroundman,

The above is not an official Summit Group page but an individual's page that decided to make what looks like a hyped business op page. They must figured that would work for them.

This ad is just a demonstration of the power of building a team. It is possible under this plan to make $941 per month based on a team of 82 members purchasing $117 per month in products. So this is $9,594 per month in Watkins products being sold and Watkins pays the team leader $941. As always the focus is moving Watkins products from Winona, MN to all points in the USA and Canada and if you help Watkins do that they will pay you commissions.

Being that most people that join Watkins join because they love the products and wouldn't mind some part-time income, a plan to make $941 per month helping others get the best products for their home and earn some extra income I would imagine would be seen as a good thing to them.

[therockroad]

ribshaw,

The claim to "no selling required" is not a violation of Watkins T&C given that the intent of the rule is to prohibit product purchases just to qualify for income or awards, for example purchasing 500 bottles of Vanilla Extract to be Salesman of the Month. As long as products are purchased to be used by an end consumer the rule is satisfied.

The easiest way to explain the $941 is that it is roughly 10% of the $9,594 monthly sales generated by a team of 82 based on the team leader sponsoring 9 people that sponsor 4 people that sponsor 1 person all purchasing 100 points in products per month (about $1.17 per point - $117 per month - $87.75 consultant price - 25% discount).

If you are committed to using as many Watkins products as you can in your home it is easy to purchase the 100 points in this plan. I would imagine most families are already buying from someone else at least 200 points of Watkins products per month including food items, household cleaners, laundry detergent, vitamins and dietary supplements, body care and remedy products (cold/flu and pain relief).

[ribshaw]

ribshaw,

The claim to "no selling required" is not a violation of Watkins T&C given that the intent of the rule is to prohibit product purchases just to qualify for income or awards, for example purchasing 500 bottles of Vanilla Extract to be Salesman of the Month. As long as products are purchased to be used by an end consumer the rule is satisfied.

While me enjoys the discussion, Watkins put out what I affectionately call VOCAB CHOICES. It seems pretty clear to me that "NO SELLING" is not preferred vernacular, and if Watkins wasn't bothered with that specific choice of words they would have kept mum. Additionally, while "recruiting" others may not technically be "selling", can you think of a better adjective?

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The easiest way to explain the $941 is that it is roughly 10% of the $9,594 monthly sales generated by a team of 82 based on the team leader sponsoring 9 people that sponsor 4 people that sponsor 1 person all purchasing 100 points in products per month (about $1.17 per point - $117 per month - $87.75 consultant price - 25% discount).

If you are committed to using as many Watkins products as you can in your home it is easy to purchase the 100 points in this plan. I would imagine most families are already buying from someone else at least 200 points of Watkins products per month including food items, household cleaners, laundry detergent, vitamins and dietary supplements, body care and remedy products (cold/flu and pain relief).

Now we are getting somewhere.

Can you provide some insight into how many join each and how many leave each year?

Of those that initially join how many reach a downline of 82 and an income of $941?

$941 is a little under 19 times what they "typical" affiliate earns so what percentage of total distributors earn this?

Of those that make $941 or more, how many years do they have in?

====================================


You (and others in MLM) make it sound simple to just REPLACE what you are already buying, and that is the hook for many. BUT if people were so enthralled with just being their own best customer, then the turnover would be very low, even if people did not recruit. In reality, MLM industry turnover approaches 100% over five years, who knew buying toothpaste from yourself could be so challenging?

I pulled two weeks of receipts from the warehouse and spent about $150 each week. BUT most of that was food, some fresh some processed. Diaper cream, drain cleaner, and hand sanitizer mark the products I would consider for self consumption, or about $30 of that $300. Some weeks it may be more, as for Vanilla Extract, I still have the bottle I inherited from my great Aunt in 72.
What I don't see in practice is folks getting into MLM that are in an near identical situation and finding out they can do the "same" $300 in shopping for $250. They find the same $300 now costs $500 even with all the perks. So the only way they can get even is if they can convince 80 others who can convince 80 others.

[therockroad]

ribshaw,

no selling is REQUIRED, you can join Watkins and never sell anything. there are many MLM's that require sales to stay active like Tupperware ($450 quarterly) or Longaberger ($1000 per year) or required monthly drop shipments which Watkins has no required orders and no minimum orders/sales. If you want to join just to buy Watkins vanilla or cinnamon each year to make your Christmas cookies and maybe buy some gifts that is ok. This is the case for most people that join Watkins they are happy to get their Watkins products for 25% off and maybe sell some vanilla extract to the ladies at church or at the local flea market. In reality everyone sells, everyone who lets people know they are with Watkins is going to find people that use Watkins vanilla or bought a hand creme at Walmart and order products.

The 9-4-1 plan is just a mathematical example of what can be done by team building which is just one way of earning income with Watkins along with catalog sharing, flea markets, home parties, online sales, etc.

Most people have no interest in team building or the work it requires to do the contacting of people, followup calls, once they join to get them trained and help them build their business. Most people know of Watkins from the Watkins man that rode up on a horse like my great grandfather or someone like Bill Porter that walked their neighborhood selling door-to-door and think that Watkins is still a door-to-door sales model and this shows another way to earn income with Watkins that does not require walking 10 miles a day carrying a sample case like Bill Porter.

Watkins products are competitively priced at suggested retail price, especially given that we have personal care and home care products on store shelves. As a Watkins consultant you get 25-39% off these prices. If you purchase products at a dollar store then Watkins products will cost more even at 39% off.

It is not really difficult to buy Watkins detergent and stop buying Tide; buying Watkins spices and leave the McCormick spices on the store shelves; buying Watkins Daily Vitamin rather than One-A-Day. As you need an item Watkins sells you order it, for products you use every month you can place an order each month for all the items you use regularly to keep stocked. This is what I did, I took my first Watkins order and went around my home and replaced all the products from Watkins for the other brands and when I need something Watkins sells I order it.

If someone is buying what they need then they are not going to as you say spend $500 on $300 in store bought products, at 39% off they can purchase $300 in products $183. There is not a reason to purchase more than you need for your family's use so no worries.

[therockroad]

littleroundman,

As to the ad you found, there are no income claims only mathematical figures based on an illustration of a concept of having one person sponsor 9 people, that sponsor 4 people, that sponsor 1 person and each purchases $117 in products in one month and based on Watkins income plan this works out to $941 in earnings on the month. Subsequently if each of the 9 people that you sponsored at first were to sponsor 9 people, that sponsored 4 people, that sponsored 1 person and everyone purchased $117 in products you can make $5,716 in a month. This is just a mathematical illustration of network marketing, nothing more. It seems kind of exaggerated on your part to see the possibility of making $941 a month (less than minimum wage pay) as some extravagance.

As to being product based to earn that $941 you had to see that $9,594 in Watkins products were sold. Kind of reminds me when my father who worked for Volvo sold a car that the Volvo dealer would pay him a portion of the car's price. The example sponsor that sees that $9,594 in Watkins products are being sold in a month gets a portion of those sales which comes to $941.
For the example of $5,716 you have helped Watkins sell $85,410 in products in a month.

Selling the products is king and Watkins rewards people for selling products. If someone would want to go it alone and sell $9,594 in products in a month they can earn up to 39% or $3,741.66.

[littleroundman]

http://i1301.photobucket.com/albums/ag116/Little_Roundman/scams/weasel_zpsc96f4681.jpg

Hey, if you and / or Watkins want to use that sort of misleading spin doctoring language, more power to you.

It's no skin off my nose, and, you'll probably attract enough of the "get-rich-quick" crowd to make it worthwhile, at least in the short term.

[therockroad]

littleroundman,

It appears that you don't read anything I write and just use your comeback "weasel words" and somehow that is to shutoff discussion.

As I have said before if someone wants to get rich quick Watkins is not for them. If someone tells me they need to make $2,500 next month in their Watkins business I will suggest they go get a job and if they want to order products I will be here for them.

You have found 2 unofficial Summit Group pages and have made your own weasel assumptions about Summit and Watkins.

Though they derive accurate information that the MOST SUCCESSFUL ASSOCIATES, Watkins Gold Executives have an average income of $258,000 (this is direct from Watkins Corporate). You seemed to have completely missed that the same material said many do not make anything just buy wholesale and others make a few hundred dollars per month. Those who are the most successful have worked their business for 20 plus years and have trained and mentored thousands of people and have seen that tens of millions of dollars of Watkins products have been sold.

The 9-4-1 Model is just a demonstration of team building.

By building a team the point is to help Watkins sell more products. The company was founded on team building, J.R. Watkins was one guy and a horse with a pain relieving liniment that he sold around Minnesota, he came to realize that if he built a team of other people to sell his products throughout all of the Midwest he could make more money then just by himself, so he began the direct sales business and that is still the only point to team building is to sell more Watkins products and Watkins rewards those who sell Watkins products with commissions and bonuses.

[littleroundman]

littleroundman,

It appears that you don't read anything I write and just use your comeback "weasel words" and somehow that is to shutoff discussion.



On the contrary, I read everything you write intently.

As for how it "appears" to you, that is down to you.

Your (and Summit Groups') continued usage of weasel words only serves to reinforce my point, so I have absolutely no desire to "shutoff discussion"

Now we have finally managed to drag out of you that the pages I have reproduced here are, in your words, "2 unofficial Summit Group pages"

(Note my usage of the words: "REPRODUCED here")

The reason I prefer to use screenshots is it eliminates any chance of being accused of editing or misinterpreting the subject under discussion, and readers can decide for themselves whether or not"weasel words" are being used or whether the screen shot conveys "the truth, the whole truth and nothing but the truth" without the need for further explanation.

If you think the Summit Group is accurately depicting the Watkins experience, fine, discussion over.

You may be part of that group which considers the "end justifies the means" when it comes to truth in advertising and that is your right

Personally, though, I have a strong objection to what I consider to be the deliberate usage of the "weasel words" more often associated with get-rich-quick pseudo MLMs than old, established direct selling organizations.

[therockroad]

littleroundman,

The christene blog appears to be a blog by the woman named christene that if you look she wrote posts on about 6 other businesses so it appears that she had a short lived blog looking at business opportunities. To the best of my knowledge she has no connection to Watkins or The Summit Group.

The other sites appear to be defunct websites by people that may have been associated with The Summit Group. After further review they violate Watkins policy for not having the required disclosures and I will forward the url's to Watkins Corporate for review.

I am lost to your use of the phrase "weasel words" in relation to me and your broad brushing of me and the whole Watkins business and The Summit Group for some websites that you found that I have said are not authorized or reflective of Watkins or The Summit Group's business presentation.

As to the official Income page from The Summit Group site:

7433

[littleroundman]

I am lost to your use of the phrase "weasel words" in relation to me and your broad brushing of me and the whole Watkins business and The Summit Group

Ummm,

perhaps in response to the original posters' query, I did a Google search for "Watkins" and "Summit Group" and responded accordingly.

It's pretty simple, really.

You keep quoting chapter and verse of what Watkins representatives "shoulda, coulda, woulda" be doing and I am relying on the evidence of my own eyes.

Only now are we seeing: "After further review they violate Watkins policy for not having the required disclosures and I will forward the url's to Watkins Corporate for review"

I don't have to apply any judgement or personal feelings, the screen grab makes my point for me, just like anyone else researching Watkins and / or the Summit group.

Try it yourself, pretend your an internet newbie and ask Mr Google "summit group watkins" and you'll find the "christene-marketing (http://www.christene-marketing.com/2013/08/watkins-and-summit-group-review.html) webite right at the top of the search results

Then we find:


Who is the Summit Group and how are they linked to Watkins?

Watkins associates are divided into teams and the largest and the most successful team is called the Summit Group (http://itsworkfromhome.com/). They offer free support and training for all new Watkins associates and have an impressive record of Accomplishment for 20 years in helping people to succeed with the work-from-home Business.


and the first clickable link in the article is: Summit Group (http://itsworkfromhome.com/) which brings us to ItsWorkFromHome.com (http://itsworkfromhome.com/) and its' nonsense
Work fro
m home and Get Paid for what you are already doing!





http://itsworkfromhome.com/images/wfh.jpg

We will show you and help you to successfully build and operate your own profitable work from home business, take control of your life and your future!



An Easy Work from Home Business
that pays for what you are already doing!!



You already do it! Why not get paid?!
No Selling is ever required!
Start Part Time at your own pace
You never have any required meetings to attend
You do not have to purchase any inventory
We will help you with time proven business building strategies - all Free!
FREE Stuff! Free training, Free support, Free Residual Income building tools and much more!









Simple, really

[therockroad]

If you look further christene is a blogger that writes reviews of many companies. She chose to review Watkins and found a member maybe from Mr. Google that had Summit Group on their site.

It sounds more like you are the internet newbie, do you get your news from The Onion if it happens to be at the top of Mr. Google?

The reason I came to this site was to counter the incorrect information out there about Watkins and The Summit Group in hopes that Mr. Google will find my words and not christene or this "work from home" site.

Just because someone has a url that says Summit Group does not make them The Summit Group site, lest we forget all the people who went to whitehouse.com looking for information on the President and found a porn site.

And I have contacted Watkins Corporate to review the above site. Given that christene is an independent blogger, Watkins has no say over her and their is that 1st amendment, so her review may have to stay.

It's interesting when I went to Mr. Google and put in "Watkins Summit Group" the top link was the official Summit Group training site. Maybe Mr. Google is coming around...This list shows the official Summit Group training site (tsgnet.com), the official Facebook Page and a team members official Summit Group info site (tsginfo.com).

7435

[littleroundman]

Once again, round and 'round the mulberry bush we go:

http://i270.photobucket.com/albums/jj119/LITTLE_ROUND_MAN/watkins_zps5952c12c.jpg

First 5 results on a Google search: "watkins summit group"

Result #1 which leads to the "rogue Watkins representative" site

Result #2 which leads to a 2011 post making exactly the point being discussed here


As I have said before, if that's the way both you and Watkins want to be seen, fair enough, just stay here and argue until the cows come home.

On the other hand, if both you and Watkins were pro active instead of argumentative, you'd get off your lazy as*** and do something about it.

Here's my problem in a nutshell.

I DO admire Watkins and I DO know its' history and I DO want to see it being successful, instead of being lumped in with the squillion other pseudo MLMs which currently infest the internet.

So, instead of rationalizing, justifying and laying blame on others, how about you and Watkins get your collective heads together and do something to fix the situation, or, on the other hand, admit that's how you want it and shut the hell up when people point it out.

[ribshaw]

As to Summit's current business opportunity site there are no income numbers.

YEAH, other than representing the 5% ish... Not some random blogger, but the top group.

7436


The Summit Group training site, from Steve Bretzke (independent Watkins consultant #046832) (http://www.tsgnet.com/v3login.php?ji=&jp=&p=105&ipl=top)

[ribshaw]

no selling is REQUIRED, you can join Watkins and never sell anything.

Yes, and you will never EARN ANYTHING. That is what I (and suspect much of ribshaw nation consider doublespeak), telling folks they can earn $941 and they never have to sell. It is like you telling me I can earn $1million as a senior partner in a major law firm, then whisper, but not if you don't pass the bar, work for 30 years, and prove yourself to be in the top 1%.

It is ONE or the OTHER, you can't have it both ways and remain credible.




Watkins products are competitively priced at suggested retail price, especially given that we have personal care and home care products on store shelves. As a Watkins consultant you get 25-39% off these prices.
buying Watkins Daily Vitamin rather than One-A-Day.

If someone is buying what they need then they are not going to as you say spend $500 on $300 in store bought products, at 39% off they can purchase $300 in products $183.

I say prove it. It is pretty simple, put up a grocery list. Everything I have seen so far has led me to conclude that Watkins has the same problem with the OBC model as every other MLM.

Even with the lauded 39% discount...

7437

I am still paying more for a 90 day supply, than I am a 200 day supply of...

7438

Hell, even these guys at retail....

7439

[therockroad]

littleroundman,

I think that our discussion has about come to a close but I would like to point out again that you above completely skipped over the official Summit Group page and the official Summit Group Facebook page and choose 3 links that fit your narrative.

Christene is an independent blogger that writes reviews of business opportunities and in no way connected to Watkins or The Summit Group. If you go to her site she has reviewed dozens of companies. I don't imagine that she is a member of the dozens of companies that she reviewed. It appears that she is involved in some "pay to blog" business and gets paid for each post she writes, so this is her business. She is also in 1152 Google+ links so being a hardcore Google+ user she is going to be at the top or near the top all the time. It is interesting that the link to the "work from home" site has no presence in this Google listing, just the link for christene. Again given the first amendment I don't see how Watkins or The Summit Group can have Christene remove her review.

The inquiry on the second link is answered on the site by Steve Bretzke, Summit Group founder. You may not like his answers but he dealt with the concerns back in 2011.

Though a little dated and hokey, the above video is actually focused primarily on the value and quality of the Watkins products and the business opportunity tied to getting the products in your home.

[therockroad]

ribshaw,

People looking to start a business want to know what they can make in a business so Watkins posts average incomes. These are not projections or wild made up numbers but actual averages of MID-TO-HIGH LEVEL leaders. Should people have no idea what can be made in the business? It would seem that disclosure of actual income earned in a business is a good thing.

[ribshaw]

ribshaw,

People looking to start a business want to know what they can make in a business so Watkins posts average incomes. These are not projections or wild made up numbers but actual averages of MID-TO-HIGH LEVEL leaders. Should people have no idea what can be made in the business? It would seem that disclosure of actual income earned in a business is a good thing.

Yes, which is why it should be so troubling for potential recruits that you continue to not deal with the elephant(s) in the room. $50 a month is the most likely idea of what they will be grossing if they are even around in five years. This is standard for MLM for all the reasons that have been highlighted. There are still plenty of serious questions in the thread that are unanswered that would also be a good thing to put on the table.

I like all the stuff about selling spices to old ladies for XMAS cookies and shopping from my couch, BUT people also have limited time to get things right and make money for their family. From what I have seen so far this is NO different than any other MLM, and 99% will be better served taking a second job, paying down debt, investing when they are caught up on bills, and buying their laundry soap at the warehouse club.

[therockroad]

To become a mid-level to high-level leader takes time and effort, much like becoming a mid-level to high-level leader in most businesses. A person who gets a job stocking shelves at Walmart is going to take time and effort and years of work to become a store manager or executive where they will make far more than they make at part time minimum wage.

As I have said the $50 average comes from the many people that join Watkins just to be a wholesale customer and buy all the products they love at 25% off, the product discount is what they seek from being a Watkins consultant. These people are happy to have the products they love at a discount and if a friend needs a bottle of vanilla they can sell it to them too and make a few bucks.

If someone does not have the time to build a business then it's great for them to get a job and I am happy to tell someone that needs $1000 in 2 weeks to pay their rent that they need to go to Walmart or Target today and get a job.

What are your other serious questions that need answers at 24 posts so far I think I have been pretty transparent...

[littleroundman]

littleroundman,

I think that our discussion has about come to a close.

Well, I'm glad you think that.

I'll just continue on my own, shall I ??

With your kind permission, of course.

[Char]

@rockroad

May I ask you what your personal plans are?

Do you just buy products for yourself at a discount? Or, are you tring to make some money? If so, will you sell vanilla (or whatever) at full price to some people to make some money like you described?

Do you plan to do 10pv to a 100 people?

100pv to 10 people?

[therockroad]

Char,

I am building my Watkins business focused on team building and doing sales to customers. Yes, I sell at the retail price to customers. My plan is to see the most Watkins products sold in the USA and Canada that I can help to happen so I am focused in finding new people to use and share Watkins products with others and to offer them the training and mentorship they need to build their businesses.

[Char]

Char,

I am building my Watkins business focused on team building and doing sales to customers. Yes, I sell at the retail price to customers. My plan is to see the most Watkins products sold in the USA and Canada that I can help to happen so I am focused in finding new people to use and share Watkins products with others and to offer them the training and mentorship they need to build their businesses.

What is your preference, 10pv and 100 customers or 100pv and 10 customers?

What is your average retail sale dollar amount/pv per month? Does it vary monthly? How so?

How much is your order per month for yourself?

FTR, I think you are being genuine here regarding your belief in this venture.

Also, silly question, but where do you buy your toilet paper?

[therockroad]

Char,

My preference is for more Watkins products to be sold. Both add up to 1000PV, so no real difference.

Sales and order amounts vary based on customer use of products. My personal order of products also is dependent on how much products I use.

Thanks for your FTR comment. Being that I have an 80+ year connection to Watkins in my family from my great-grandfather who was a Watkins man in the horse and wagon days during the Depression and my cousin who sold Watkins in the early 80's to support her family, Watkins is a part of my family history and the products have been in my family's home and kitchens for these many years.

Usually get toilet paper at Smart and Final or Costco.

[Char]

How much of the 1000pv per month is to retail only customers i.e. not in the system?

On average, how much pv/dollar amount is your personal use each month?

[therockroad]

Each month is different, so it is hard to say, with no minimum orders and no required autoships that give consistent sales volume each month can and will be different.

[ribshaw]

Watkins is a part of my family history and the products have been in my family's home and kitchens for these many years.

Would you refuse to date someone who only used Burt's Bees?

On a serious note, is Target no longer carrying Watkins in store? The first post of this thread indicated Walmart no longer had a contract with them? I was at Target today in the area where I thought I had purchased items before, it was filled with Bees. If this is the case, are they trying to move to a complete MLM/Distributor model?

[Char]

Each month is different, so it is hard to say, with no minimum orders and no required autoships that give consistent sales volume each month can and will be different.
What about the other question?

Minimum orders and required auto ships would pertain to people plugged in.

How much of the 1000pv per month is to retail only customers i.e. not in the system? (on average)

[therockroad]

Stores are changing their product mix all the time. Watkins products are maybe 10-20 of 100,000 products carried in a store so if they figure they can use the shelf space for some other product or an in-house product they will. That is what happened with Sprouts a natural foods market in my area they opened with a whole shelf of Watkins spices and then eventually moved them out for their Sprouts branded products, much like Costco moves many popular national brand products to Kirksfield, their in house brand.

Watkins products as far as I know are in about 10% of Watkins stores in the USA and Walmart is always changing products around so even in the stores with contracts the products carried will be the best sellers. It was pretty cool that in the Walmart in Winona, MN where Watkins is headquartered the complete spice aisle was Watkins products except for a few McCormick food colorings.

Being that the products in stores have seen dramatic sales growth by direct sales consultants I don't see Watkins ending the retail initiative. Watkins products have been sold in retail stores throughout Watkins history in mom and pop stores and I believe that there were actually Watkins retail stores in major cities in the early 20th century.

[therockroad]

Char,

I am currently focused in my business in training and mentoring my team members and my personal sales volume each month is made up of my personal use of products, promotional give-aways to customers and products that I give to my new consultants in their welcome package. As I get people that approach me to buy products I will be happy to sell to them and I do have a small customer base that I would love to grow.

[Char]

@TRR

Sounds like you're really dedicated to building this business. Would it be safe to say that you are currently spending money to get established? Let me phrase it differently, and I do realize you get product in hand:

How much do you spend on all aspects of Watkins each month now? Training, product, gas, etc.

Also how much time per week do you spend on this?

I know this is necessary to start a business but I'm just curious as to the amount.

Also, How much did you spend on Watkins before deciding to make it a business?

P.S. I'm not going to try to stop you from doing Watkins. I am going to point out some things to watch out for IMO and maybe you can just be on the look out. I hope you think that's reasonable for this discussion.

[therockroad]

Char,

I basically am just spending what I need in products for my home and family. I am a foodie, so I keep my spice rack full of my favorite Watkins spices for cooking.

I work out of my home so I really don't have travel expenses.

I pretty much do some work on my business 7 days a week from a few minutes to a full day, just depends on work to be done.

[Char]

I completely understand getting a discount by signing up. Now some concerns:

Making a few bucks retail from a couple of customers isn't going to be worth much in exchange for your time. Certainly not a business, maybe just a couple of dollars bonus.

What if you do get one high spending customer? Well, they sign up and get the discount like you. Oh no, there goes that retail.

What keeps people from picking up vanilla at the store if they run out? Why the business lure of course.

I asked you where you buy your toilet paper? You said Costco which is a very reasonable and true life example. If I were an Amway IBO I'd say, how about buying it from yourself and getting a discount? See how the motivation might be lacking if you're not hoping to make it a business.

I'd have serious concerns about people picking up vanilla at Walmart while out shopping anyway.

Now, I think I saw where a Watkins IBO gets bonus points for selling a big product package to the new IBO.

Here's where I really wish you would read (if you haven't already) the Mary Kay website Pink Truth (http://www.pinktruth.com) as this is exactly how they operate. There, you will read countless stories from former directors who admit to lying shamelessly to make a buck. The lie is telling new consultants about retailing products and money making/saving options to get them to sign up. The directors know the only way to make money is to sign up new consultants and sell them a huge initial inventory.

And round and around we go. MLM is MLM. Even if you have a decent product, Amway's toilet paper isn't too bad nor are some of MK products, it's the system of MLM that doesn't work the way they present it.

If you do markets, sell retail, and not recruit, that's a different matter. But you stated, that is not your focus. See the catch 22 when it's an MLM.

And remember, you are someone's sign-upeee who wants to make money off of you and your efforts.

[therockroad]

As to the vanilla, most people who have used Watkins vanilla will buy it and use it because it's the best available. There are a lot of companies where the products just push the comp plan, Watkins is not one of them, people that use Watkins products will buy them even without a business advantage. My sister-in-law is a baker and her "secret" to her chocolate chip cookies is Watkins vanilla.

As to the Watkins business package as I answered more fully above Watkins used to require all new consultants to purchase a $150-200 kit to start that included products, catalogs, literature, day planner and satchel with a focus on home parties and door-to-door sales, but if you weren't going to do parties you were paying for about $60 in party invitations and samples or if you didn't need a day planner that was another $50 in extra cost, so they cut back to a $40 membership fee that was a catalog and training materials and allowed the new consultant the opportunity to buy the products and supplies for the way they were going to work the business. One of the add-on items is the Watkinize Your Home upgrade that contains $500 in products from all 4 product lines for $349 (30% off rather than standard 25% discount). This can serve as a sample kit for home parties and display tables, for resale with an extra 5% commission or for the new consultant to begin using Watkins products in their home to build their product knowledge.

As to the Mary Kay problem, the Watkins philosophy is to only purchase enough products for your personal use and resale needs. Rather than be applauded a Watkins consultant that would make a huge purchase of products would be contacted by their upline to find out why they were doing it. The only reason to make large purchases of products is for those people who do state or county fairs that need thousands of dollars in merchandise for resale at the fairs.

[Char]

It's only $40 to join, but this sure does look enticing.

Watkinize Your Home Assortment
A variety of pre-selected Watkins products for every room in your house.* Earn additional money with the Watkinize Your Home (WYH) Bonus Payout: you can earn $100 cash (or more)!

To qualify for the WYH Bonus Payouts, you simply purchase the assortment for yourself & enroll in Watkins Loyalty Program.

The WYH Bonus Payout is not the only benefit! You also receive a FREE E-Associate online web package and maintenance fee for the first three months ($124.80 value!). Check mine out here!
·** *$349 WYH package
·** *FREE Watkins E-Associate Website ($64.95 Value)
·** *Three months FREE web maintenance* ($59.85 Value)
·** *WYH Bonus Payout** $100—$175
·** *Watkinize Your Home product assortment


And even more enticing:

·** *Total Assortment Value: $625
*Watkins will maintain your website for a monthly fee of $19.95 after your first three free months.
**Requires Associate to purchase the Watkinize Your Home assortment and join Watkins Loyalty Program.

[Char]

As to the Mary Kay problem, the Watkins philosophy is to only purchase enough products for your personal use and resale needs. Rather than be applauded a Watkins consultant that would make a huge purchase of products would be contacted by their upline to find out why they were doing it. The only reason to make large purchases of products is for those people who do state or county fairs that need thousands of dollars in merchandise for resale at the fairs.

Do you really think MK applauds big purchases? Or do you think purchases are made because they are told the products are helpful to run a business, have samples for clients, available inventory to sell, and personal use. Sound familiar?


RR said,
"One of the add-on items is the Watkinize Your Home upgrade that contains $500 in products from all 4 product lines for $349 (30% off rather than standard 25% discount). This can serve as a sample kit for home parties and display tables, for resale with an extra 5% commission or for the new consultant to begin using Watkins products in their home to build their product knowledge."

[Char]

And what's this. More spending?


To qualify for the WYH Bonus Payouts, you simply purchase the assortment for yourself & enroll in Watkins Loyalty Program.

Loyalty*Program

The Watkins Loyalty Program is designed to support Consultant business-building efforts. Consistent, monthly use of Watkins products in your home is a cornerstone of success in your business. This program will reward your consistent use, personal commitment and loyalty to Watkins products.

Here’s how the Loyalty Program works:

Watkins*computers will automatically check your Central Points three full days before the end of each month. For example, if the month has 31 days, we’ll check your volume at the end of the 29th day. If you have fewer than 100 Central Points, Watkins automatically mail you a Watkins Gift Certificate that will boost you to 100 Central Points. For example, if you had 72 Points, we’d send a Gift Certificate that counts as 28 Points. For Consultants who have reached Manager level, the certificate will boost you to 200 Central Points. You can then redeem the certificate on any future order. Watkins We’ll charge the payment method you provided for the certificate (you get the 25% Consultant discount, and there’s no shipping or sales tax added). You’ll receive a notification via email when we generate a Gift Certificate. If you already have 100 Central Points (200 Central Points for Managers) when the computers check your volume, no certificate will be issued and you will not be charged. Join us as a consultant and use the Loyalty Program every month.

[Char]

And more incentive to order products. But they're not like MK.


"Advantage order is done

2/8/2014
My Advantage order is done for the month, 30% savings and free shipping. Join me in saving dollars when you order your Watkins.

Here is a little bit how the Advantage Program*or "Free Shipping" works.

The deadline is the 8th of the month to place or modify your order on the Advantage Program as a Watkins Consultant. It's the optional program that lets you order from 100 Points to 300 Points (about $100 to $300 worth) of products at a bigger-than-usual discount and with Free Shipping."


^^^^Found this on Internet but I don't want to give the consultant a plug here by posting link.

[therockroad]

Char,

All of these programs are optional and are products at a 30-40% discount over the usual 25% discount. If you would rather not save an extra 5-15% on product purchases you can, if you never want to order products this is also an option (odd choice to not want to buy the products you are promoting). You are free to pass up the Watkinize Your Home upgrade and pay $375 for $500 in products rather than $349.

The Mary Kay site was focused on people being encouraged to load up on thousands of dollars of products that they did not intend to use, just buying for the business. Watkins discourages having an inventory for products above your current use of the products or your customer's current demand of products.

The most important thing in Watkins are the products and the proven way to being successful in Watkins is to use the products daily so you can share with customers and potential consultants about them from personal experience, akin to a Ford salesman building credibility by driving a Ford F-150 rather than driving a Dodge Ram. The above programs allow consultants to experience and begin to use the products at an increased discount to help them build their product use and product knowledge.

When I got my WYH package I went around my home and replaced as many products I had whether Dial Soaps, Tide detergent or McCormick spices with my new Watkins products and put the non-Watkins products in a back of a cabinet or in the trash and made a commitment to keep adding new Watkins products to my daily use and re-ordering the products I got in my WYH package. Pretty much now if there is a Watkins product available I use it.

[ribshaw]

Char,

All of these programs are optional and are products at a 30-40% discount over the usual 25% discount. If you would rather not save an extra 5-15% on product purchases you can, if you never want to order products this is also an option (odd choice to not want to buy the products you are promoting). You are free to pass up the Watkinize Your Home upgrade and pay $375 for $500 in products rather than $349.

The Mary Kay site was focused on people being encouraged to load up on thousands of dollars of products that they did not intend to use, just buying for the business. Watkins discourages having an inventory for products above your current use of the products or your customer's current demand of products.

The most important thing in Watkins are the products and the proven way to being successful in Watkins is to use the products daily so you can share with customers and potential consultants about them from personal experience, akin to a Ford salesman building credibility by driving a Ford F-150 rather than driving a Dodge Ram. The above programs allow consultants to experience and begin to use the products at an increased discount to help them build their product use and product knowledge.

There is a blogger who tirelessly defends Amway, his handle is PBJfightback or some such. In many of his posts he says almost verbatim what you are saying about product loading and the tools business. Yet, we know from years of history and 100s of personal stories what happens in many corners of MLM. So where does that leave us in reading his work? Is his downline truly different, or is he spinning? Hard to know 100%, but if someone is really involved in a business it is difficult in my opinion for them not to know what is going.

Which brings me back to Watkins and a comment made earlier about the number of items on Ebay listed for sale. I associate EBAY with the place affiliates of MLM go when they need to empty their garages of product. It is hard for me to conceive these are all folks who bought with the sole intention of being EBAY sellers and not victims of product loading from overzealous uplines. Maybe I am completely wrong on this and Watkins is the one exception to the rule.

[therockroad]

Product loading is discouraged because of the importance on Watkins end for people to have the freshest products available with the newest labeling so that the customer gets the best product available. Watkins consultants are prohibited from selling old discontinued products or products with out-of-date labeling, so it would be unwise to stock products that are not selling. The general rule is to collect orders and place an order at the beginning of the month and end of the month for items you use and what your customers ordered.

The Watkinize Your Home package is a collection of daily use items like spices, soups, cleaning products, detergent, etc. that people can consume in their own home over a few months so there is no fear of loading.

As to eBay, you are true that a lot of people unload excess merchandise from MLM programs. There are people that were selling Watkins products on eBay as a part of their Watkins business, but Watkins as of last year has established a new policy that all online sales must take place at the jrwatkins.com website, so these people are having to phase out their online sales on eBay and Watkins is allowing them time to sell off their inventory. One of the largest sellers on eBay was the top consultant in retail sales, so they were moving products and not just stockpiling. As to the others I don't know all of their stories, there are some natural foods and drugstores that also have eBay pages that sell Watkins products.

Also in a generic "Watkins" search on eBay you are also going to pickup Watkins collectibles from the past like cookbooks from the 40's, old tins, old catalogs and even some NASCAR stuff related to Watkins Glen Racetrack.

[ribshaw]

Product loading is discouraged because of the importance on Watkins end for people to have the freshest products available with the newest labeling so that the customer gets the best product available.

That sounds like the way it should be. Then if someone gets involved they are as you say using stuff themselves, or only buying what they can retail to actual customers.

On a side note, where does your company stand on motivational tools and rallies?

[therockroad]

Motivational tools and rallies as a profit center as in other MLM companies is not a part of Watkins as I know it. All Summit Group training is offered free of charge online and one-on-one by team leaders.

[Char]

Char,

All of these programs are optional and are products at a 30-40% discount over the usual 25% discount. If you would rather not save an extra 5-15% on product purchases you can, if you never want to order products this is also an option (odd choice to not want to buy the products you are promoting). You are free to pass up the Watkinize Your Home upgrade and pay $375 for $500 in products rather than $349.

The Mary Kay site was focused on people being encouraged to load up on thousands of dollars of products that they did not intend to use, just buying for the business. Watkins discourages having an inventory for products above your current use of the products or your customer's current demand of products.

The most important thing in Watkins are the products and the proven way to being successful in Watkins is to use the products daily so you can share with customers and potential consultants about them from personal experience, akin to a Ford salesman building credibility by driving a Ford F-150 rather than driving a Dodge Ram. The above programs allow consultants to experience and begin to use the products at an increased discount to help them build their product use and product knowledge.

When I got my WYH package I went around my home and replaced as many products I had whether Dial Soaps, Tide detergent or McCormick spices with my new Watkins products and put the non-Watkins products in a back of a cabinet or in the trash and made a commitment to keep adding new Watkins products to my daily use and re-ordering the products I got in my WYH package. Pretty much now if there is a Watkins product available I use it.

All the packages are optional but YOU bought one as will anyone who wants to take their "business" seriously. This is a tactic and you've fallen for it without realizing it. You are also buying only Watkins, EXACTLY THEIR MISSION, by dubbing customers i.e. YOU "business owners".

Why didn't you have all Watkins products before starting this business? Think long and hard about that question.

With regard to the Ford truck, I don't see car salesmen going around recruiting other employees to dilute their customer pool at the dealership therefore this is not an accurate analogy.

Look at the quote below. You are parroting crap that's been around for years whether it be Watkins or Amway et al. You just don't realize it YET. IMO, you are distracted by the product, BY DESIGN, and not focusing on the fact that MLM IS MLM regardless of the product. MLM is a system and a bad one at that.


All You Need To Know About MLM (Is MLM a Scam?) (http://www.financialindustryscam.com/mlm.htm)
According to the MLM/promoter, each recruit is his own L1 business, the product is unique and in high demand, and the figures above are simply the result of "duplication of his efforts". Recruits are encouraged to buy and try the product(s), because a "good salesperson" needs to know the product he's selling (of course once he's opened it to try, it's generally nonreturnable). By design, a "balanced" MLM business utilizes both retailing and recruiting, and the market is never saturated. But look at the results above — L1 has sold only two products and his own compensation has already exceeded the $340 total of all 17 products sold at retail! Furthermore, let's look at the FULL chart:

I'm sorry if I'm coming across strong to you. Like I said before, I really believe that you believe. I just get so frustrated.

[therockroad]

I am buying only Watkins products because I know that they are of the highest quality and from experience using Watkins products in my home for over 30 years, I had a cousin that was a Watkins rep in the 1980's who introduced me to the products like Watkins pepper and cinnamon. I also get a 39% consultant discount which makes the best in products even more affordable.

I am actively working on getting more Watkins products sold by myself, by my team of people and seeking new people to share the Watkins products. In the 1940's and 50's in the height of the door-to-door salesman days Watkins was a brand name in many homes in America, I want to see that happen again that when people go to their pantry to get cinnamon it's Watkins cinnamon or when they go to do their laundry it's Watkins detergent they are using.

The Watkins products are and have been the focus of the company for 145 years, they are not a distraction but the reason for the company to exist and my goal and other Watkins consultants goal is to see more Watkins products in homes in the USA and Canada.

[Char]

I am buying only Watkins products because I know that they are of the highest quality and from experience using Watkins products in my home for over 30 years, I had a cousin that was a Watkins rep in the 1980's who introduced me to the products like Watkins pepper and cinnamon. I also get a 39% consultant discount which makes the best in products even more affordable......
.



When I got my WYH package I went around my home and replaced as many products I had whether Dial Soaps, Tide detergent or McCormick spices with my new Watkins products and put the non-Watkins products in a back of a cabinet or in the trash and made a commitment to keep adding new Watkins products to my daily use and re-ordering the products I got in my WYH package. Pretty much now if there is a Watkins product available I use it.

High quality or not, you did not exclusively buy Watkins prior to joining up (according to your post highlighted in red). This is how humans do things. Think about how ridiculous you'd think it was for me to suggest you get your toilet paper from Amway.


The Watkins products are and have been the focus of the company for 145 years, they are not a distraction but the reason for the company to exist and my goal and other Watkins consultants goal is to see more Watkins products in homes in the USA and Canada...

Yes, but you are not Watkins. You are a new loyal customer buying products than you never did before, and advertising Watkins on your dime. Watkins is distracting you by calling you an IBO in order to get you to buy their products and advertise for them - And its working FOR WATKINS which you are not.

What you are saying is nothing new. I cannot tell you how many times I've heard the same excuses INCLUDING MY OWN SELF back in the day when I too was being duped. MLM IS MLM and that will not change. It is a system and not a product. You have to understand that. I admit my own stupid mistake, have studied it, never seen it work as described, and am trying to spare others losing money and precious time.

[EagleOne]

therockroad: All you have to do is ask yourself these questions: When Watkins was selling door-to-door, did the salesmen get a referral fee for bringing other salesmen into the business? Did the salesman get a percentage of the sales of the salesman brought into the business? Did the salesman who brought the salesman into the business, get a percentage of the sales of all the salesmen his salesman brought into the business?

You see I hardly doubt this is the way Watkins was doing sales of their products before expanding into the MLM model. The focus was on sales. If you didn't sell, you didn't get paid and you didn't eat. Now you get paid whether you sell or not just by bringing people into the business and from a portion of their sales. And if each member is not generating 51% of their income from outside retail sales, it is an illegal pyramid no matter what you, me or anyone else says. It is what the FTC says, and they are the ones whose opinion counts. You are playing with fire here and so is Watkins.

[therockroad]

Char,

Thanks for your concern and sharing your experiences.

I may not be Watkins, but I am an independent representative of Watkins. I am more than just a new loyal customer, I am using the products and promoting the products and business. Along with advertising the business on my dime (actually use mostly free social network sites), I am also training my team members who are doing home parties, flea markets, door-to-door sales and more. Team building is just one aspect of the Watkins business and that is what I am focusing on as I build my foundation in the business.

[Char]

Char,

Thanks for your concern and sharing your experiences.

I may not be Watkins, but I am an independent representative of Watkins. I am more than just a new loyal customer, I am using the products and promoting the products and business. Along with advertising the business on my dime (actually use mostly free social network sites), I am also training my team members who are doing home parties, flea markets, door-to-door sales and more. Team building is just one aspect of the Watkins business and that is what I am focusing on as I build my foundation in the business.

Yes, hopefully all readers here will consider the info I and many others post before joining any MLM.

Independent rep for Watkins? I assume you are compensated for your time. Would part-time hours be a fair assessment? So by my math using minimum wage (the very least):

20 hours a week x $8.00 = $160 week or $640 a month.

I certainly hope Watkins is at least paying you that to start with - For your time and efforts as an independent representative for Watkins.

Does Watkins reimburse you for your expenses while representing them? Did they provide the computer to advertise on those social network sites? Or are you using your own?

You are training team members to do home parties, flea markets, etc...???

Is that what your upline team members are training you to do? Or are you doing that for your downline?
Did someone sign you up? Are you someone's downline?

For me, why would I want to do all that door to door sales etc. when I could just train someone else to do it for me. Yes? Is that what you are doing?

Team building is just one aspect of the Watkins business and that is what I am focusing on as I build my foundation in the business.

After you build your foundation and someone in your downline leaves or quits ordering, do you have to replace them? Or are you set with your foundation once you reach a level regardless of what your downline does in the future?

[ribshaw]

Yes, hopefully all readers here will consider the info I and many others post before joining any MLM.

This has been a great thread highlighting the trials and tribulations of becoming a top dog MLM distributor. It comes back to the same few things with every MLM I have seen to date:

* Even with the discount, distributors seem to be paying closer to retail than wholesale.
* Any high volume customer would be mad not to become a "distributor", which means a huge cut in retail sales to the person previously selling directly to them.
* While I like the idea of retail selling at homes, flea markets, door to door that seems like a tough route considering the above, plus massive retail competition online and big box.

The MLM model appears flawed opposed to traditional sales where there is one commission or a true wholesale/retail pricing structure. Unless a distributor has a venue where they can do large scale retail they must rely on a network of people who "self consume", and that almost never seems to play out as easy as it sounds.

To your point about wages, almost anyone could go out and wait tables, deliver pizzas, or find some similar part time job to fill the (MLM Hours) and start putting cash in their pockets immediately. It has been years since I waited tables, but a few shifts on the weekend meant $200+ in cash, that is $10kish a year, more than 95% in MLM earn regardless of how plugged in they are.

Not seeing it, but am lookin to find some of the Watkins Vanilla and Cinnamon to make French toast.

[littleroundman]

And, once again, around and around we go with an MLMer rationalizing, justifying and laying blame while simultaneously refusing to acknowledge the presence of the 500 lb gorilla in the room.

Here we have what Watkins and therockroad apparently condone as being a truthful representation of the Watkins "opportunity"

NOTE: the frequent use of the "no selling required" mantra

NOTE: the unsubstantiated earnings "potential"

NOTE: the use of the same hyperbole and "weasel words" common to almost every get-rich-quick schemes'splash page or capture page

Question: what makes this advert any different than any of the squillion other shady pseudo MLM advertisements infesting the 'net today

Forget about the legality, could any reasonable person view this web page and NOT think scam, hype, B/S or similar.

http://imageshack.com/a/img843/4892/5zir.jpg

[Char]

Lol, what a silly ad.

EXPERIENCED Mlmers know that you can't count on anyone in your downline when they themselves don't have a money making downline of their own. That 9-4-1 just doesn't fly. Anyone without a significant SUCCESSFULL downline (your downline's downline) isn't sticking around. They are going to lose faith, get tired of spending extra money, and stop devoting their time, if they aren't getting anything and very little in return. Well they might buy a bottle of vanilla every few months but they will probably pick up their laundry soap along with their toilet paper at Costco.

It's also possible that unsuccessful downlines might change companies thinking they'd be more successful trying to promote fruit juice like Genesis Pure for example. All that hard work training them and poof they take "the business they own" elsewhere. I guess that's their perogative as its their business, apparently. But how can your downline be your business if that same downline owns his business? Whew!!!!

Unsuccessful downlines will drop like flies and they will need to be replaced. Unfortunately it gets harder and harder to build because IBO surely already exhausted everyone he knew with the first go round.

[therockroad]

littleroundman,

This is an ad run by 1 Watkins consultant, not run by me or Watkins. It appears that without it being linked to christene marketing's site which benefits from her 1000+ google+ connections in google searches, it appears not to be findable on the net.

I don't know if you noticed that christene has added a disclaimer saying that she has no affiliation with Watkins or The Summit Group or the dozens of other companies she reviewed.