Zeek Rewards admit business model is illegal
Despite all the talk about compliance and reassurances that Zeek Rewards is not an investment scheme, at the end of the day members could purchase VIP bids, give these bids back to the company (effectively serving as an investment) and receive a 90 day return on their points (the investment).
This happened regardless of whether or not the company gave bids away or not and despite the company claiming otherwise, functioned as an investment with Zeek Rewards paying a daily return.
The problem was that with members re-investing their returns back into their point balances, it was completely unrealistic to imagine that Zeek Rewards would continue to experience infinite customer growth to give the daily bids being handed back to it to real customers.
Indeed it is common knowledge that this did not happen in real-time, with the company drowning in excess points it could not give away, a point queue was formed with Zeek Rewards giving away points as it acquired customers.
Despite member’s points having not been given away however, the company continued to pay members a return. With points not given away, this fuelled speculation that the Zeek Rewards daily returns were infact generated by the money being invested by members, rather than via customers using bids in the Zeekler auctions.
If your points haven’t even been given away, how do they generate revenue to share around?
The above has consistently been one of my major criticisms of Zeek Rewards and changing the business model so that bids are actually given away to real customers before returns are paid out was suggested on BehindMLM roughly a month ago now.
A month later Zeek Rewards appear to have taken that suggestion on board and yesterday the company put out a press release acknowledging their business model was illegal.
Citing Federal laws, Zeek Rewards state that:
federal law has changed and we have been informed that we are no longer legally allowed to provide customers or leads for purchase.
The federal law changing is cited as being the ‘Federal Trade Commission’s Business Opportunity Rule‘.
Mostly it seems this rule is being changed to ensure that businesses are more upfront about any income claims they make, revealing a list of those who have previously bought into the business and an increase in transparency so that the end customer is able to make a more informed decision.
Regarding MLM however,
The Commission (has) determined to continue to challenge unfair or deceptive practices in the MLM industry through law enforcement actions alleging violations of Section 5 of the FTC Act and not through the Business Opportunity Rule.
I haven’t gone over the rule in any great detail, but if I’m understanding correctly, the FTC has gone to great lengths to make sure this new rule doesn’t unfairly ‘sweep in‘ the MLM industry.
If Zeek Rewards are worried about it, is that even more evidence that the business opportunity is not MLM but rather a dressed up investment scheme?
Regardless, the problem was never so much that Zeek Rewards was charging for leads, the problem was that members were investing money and earning a return without they themselves selling anything.
The money being pumped into Zeek Rewards effectively served as an investment as those who invested did not they themselves acquire customers. They just gave the bids they were assigned back to the company and sat back as Zeek Rewards paid them a daily return. How much of a return received being entirely dependant on how much money they had invested.
Furthermore with Zeek Rewards refusing to cite how much of the daily profit share was made up of member investments, it was pretty obvious that with the company paying out returns before it had even given bids away that this meant the majority of the profit share had to be coming from member investments.
Nonetheless, in order to address this problem, Zeek Rewards went on to announce that
Zeek will stop all customer purchases through the 5cc as of midnight est tomorrow night as that is when the law goes into effect. Midnight March 1st, 2012.
The 5cc of course being the ‘dump VIP bids on Zeek Rewards and earn a return on them, regardless of whether they have been given away to real customers or not’ scheme.
In its place, starting March 1st Zeek Rewards are launching a preferred customer scheme.
The preferred customer scheme instead requires Zeek Rewards members to personally enrol two preferred customers a month. Upon doing so, the company then promises to provide any additional customers needed for that month (to dump VIP bids on) for free.
With the 5cc, there was no monthly requirement to acquire actual customers and members were simply charged $2.50 per “customer” they purchased from Zeek Rewards.
Preferred customers are basically Zeek Rewards members who don’t participate in the daily profit share. In exchange for a monthly fee, preferred customers receive VIP bids from Zeek Rewards (presumably bids ZR members have dumped with the company) and their own replicated retail storefront.
Oh and of course they are entitled to VIP bids the Zeek Rewards member who recruited them passes their way (subject to the limitation per customer depending on the Zeek Rewards member’s membership level).
After meeting their monthly two preferred customer recruitment requirement, Zeek Rewards members can then place customer orders with Zeek Rewards and dump their bids with the company as they previously did under the 5cc.
What’s interesting is that this will be a major change for the bulk of Zeek Rewards members. Previously those using the scheme as a passive investment opportunity are now they themselves going to have to recruit at least two preferred customers a month if they wish to continue doing so.
How this sits with the Zeek Rewards memberbase is of course yet to be seen. The company has vowed to uphold existing customer purchases but once these expire (which might take a few months), it is only then that a true reflection of the 5cc changes will be measurable.
Legality wise it appears Zeek Rewards are trying to tackle not only the fact that prior to March they were running a passive investment opportunity, but also the FTC 70/30 rule.
Before March 1st, 100% of the purchases made within Zeek Rewards were by members (VIP bids).
Following the introduction of preferred customers, Zeek Rewards are essentially setting up an autoship member option and by excluding preferred customers, hoping to count their purchases towards the 70/30 rule.
The problem of course is that under the 70/30 rule, 70% of the purchases must be made by non-members. Preferred customers are still members of Zeek Rewards and that’s still a problem for Zeek Rewards.
As far as the 70/30 rule goes, even with these changes they are still hopelessly failing to meet the FTC’s requirement.
I congratulate Zeek Rewards for coming clean and admitting that their opportunity was illegal but I’m a bit concerned over the manner in which they’ve chosen to do it.
The changes to the FTC’s Business Opportunity Rule do give them somewhat of a convenient scapegoat to cover the change to the business model, but at the end of the day it appears that the FTC rule change wouldn’t cover them anyway if they were a bona fide MLM company.
If Zeek Rewards wasn’t a legit bona fide company then that leaves them being an investment scheme, and when you consider the ‘passive investment’ model of the 5cc, a presumably illegal one at that.
It’s no secret that in the last few months Paul Burks and the rest of Zeek Rewards management have scrambled to hire lawyers to help them navigate the mess they’ve created, and if I didn’t know any better I’d say the timing of this announcement (just two days before the deadline seems rather abrupt to me), appears to be a hastily put together interim solution.
Indeed when you consider the company announced that ‘additional qualifiers will be put into place for April‘ it certainly seems like Zeek Rewards themselves haven’t finished addressing the company’s legal problems.
It’ll certainly be interesting to see what happens when the reality of the new preferred customer program hits Zeek Rewards members over the next few months.
I imagine failing to recruit 2 preferred customers a month is going to have some pretty dire consequences to member’s VIP point balances, especially when you consider the potential disruptions as a result of the rolling 90 day point expiration.
Stay tuned!
I’ve been mulling over why ZR are concerned about the FTC Business Opportunity Rule and it occurred to me that part of the reason they’re requiring members to get customers is so they come under the MLM banner and are exempt from the rule.
Despite Zeek Rewards’s marketing spiel that they are customer based, we all know dumping bids back onto the company means ZR can be used as a passive investment opportunity.
There’s no way known this would come under MLMs as far as the new FTC rules go so they’ve introduced an autoship customer requirement in the hope that will qualify them.
Being subject to the FTC rule would mean divulging things like the exact revenue components of the profit share and providing each and every ZR member (including new signups after March 1st) with a complete list of all memebers currently enrolled in the scheme.
That is if I’m understanding the FTC rule properly. It’s a bazillion pages long and quite long-winded.
Why would the new PRC program really effect affiliates daily qualifying commissions? You could just have anyone signup as a FREE affiliate to your Zeekler site, and give your bids away manually to them every day… thus qualify. Giving your bids away wouldn’t be automatic anymore, but who cares if that’s the only difference… minor.
Am I missing something here?
The author made it seem like PRC is going to massively cut into people qualifying for their commissions.
I think what the company is saying is that in order to qualify for daily profit share, we must now roll up our sleeves, find two customers to join our Zeekler penny auction site for a small fee to receive our bids.
After 30 days they will need to upgrade to ZR affiliate status with a subscription. that is what I got from it.
IMHO, the company’s saying that posting links is no longer sufficients. You need to actually show RESULTS.
The problem I see with this is same as Oz: they’re selling MEMBERSHIP, not products that they claim to sell: bids.
You do not need to find two PRC customers to earn. You can create all the phony accounts you want and give bids away to them. What Zeek is saying is they can’t sell you the free customers.
This only affects those with large balances that relied on 5cc for unlimited retail customers.
@Jimmy… isn’t that what we all hope for though? large balances?
@Hmmmm
They didn’t mention anything about upgrading to affiliate status and also mentoned recruiting two preferred customers covered you for the month of March, sounding like it’s going to be a monthly requirement (if you want to dump your bids on Zeek Rewards).
With most people using Zeek Rewards as a passive income opportunity, doesn’t this affect the vast majority of their memberbase?
Most people joined Zeek Rewards on the idea that they’d go around telling people their “work” was publishing daily spam so long as ZR let them passively invest in their scheme.
Dunno how easy it is to make bogus accounts (you’d have to keep making them over and over) but at a minimum of 2 a month it sounds like a lot of effort?
@Oz
Because it is easy to get a free retail customer to sign-up and give away 1000 bids to them. So if my balance is currently 5000 points, and at 1.5% average daily rate, I will only “earn” $2800 this month. So that means I only need to refer 3 free customers. That’s one trip to Starbucks and 3 free customers.
Free customers only need an email address. No email verification occurs. You can use a bazillion free email accounts and sign up all the customers you want.
However, say your account balance was 50,000. Now you will have to signup 28 free customers this month because you will earn $28,000. Well now it gets a little harder to dance around and find free customers. You’ll need to go to 10 different Starbucks because they block max number of sign-ups to 3 per IP address (everyone race to your Starbucks now before your fellow affiliate does to use up that IP address).
But by the time you reach a balance of 50,000 points, you can spend $20 and “giveaway” PRC accounts to people you know. $28,000 for $20 spend?
It’s really a non-issue, other than requiring you to *do something*. You may need to get a VISA gift card in someone else’s name. You have to convince someone to signup and give you their tax ID number. So some legwork required. But by the time your balance is in the 5-figure range, I’m sure you will find a way to be resourceful and get it done.
I’ve read that if you login to your Zeek Rewards account and create customers from there yourself, you can bypass the IP address restriction?
If there’s no email verification then what’s stopping you from making up email addresses – why do they have to be actual accounts? Just punch in aoigoij@oaijgoiejoa.com and hope nobody else has hit the same random keys for a signup?
If that’s the case then there’s a whole new level of fraud attached to the Zeek Rewards scheme, in that exactly how many bogus free “customer” accounts have been created by members?
It is a mess, I am pulling out as well as many others. I in no way signed up to recruit. I am pulling 100% starting today. By now zeek will see how many people are pulling out. Maybe tomorrow we will see if they are scared. Pulling my money and hope I get back at least what I invested. Today got $500 hope the check comes in 2 weeks.
Zeek is not sustainable regardless of how anyone looks at it. It’s very simple – You give them money, they give you bids, you give those bids away, they give you points, they pay you on the points regardless if anyone actually puts new money in after using the free bids – which most don’t.
So at 300,000 points you can take out about 800 dollars a day and keep growing exponentially even if NONE of your retail customers that you have maxed out giving your free bids to ever buy anything – that is simply not sustainable.
You would need your downline to be putting in more money then you are making to cover yourself as an expense to the company which nobody I know in the program does. I don’t know why people don’t see this HUGE elephant in the room!
Add to that the fact that MOST of the affiliates were putting money in as a passive investment and that they say OVER AND OVER AGAIN ALL OVER THE SITE that all you have to do is post one ad a day and make a commission – THIS IS NO LONGER THE CASE!
Yes call it lazy to only get customers from the 5cc BUT POSTING THE AD WAS THE ONLY REQUIREMENT STATED TO GET PAID. Now the game is totally different, it’s not what I signed up for nor did most people I know.
Tons of people are pulling out and it will be that much harder to sign up new affiliates with the way the system now has to work. I’m sorry but I just cant risk my money in a program like this.
Even if everyone DID get REAL customers to give free bids to, THOSE PEOPLE HAVE TO BUY BIDS AND ITEMS AFTER THEY USE THE FREE BIDS OR THERE IS STILL NO NEW MONEY IN THE SYSTEM – this is not rocket science people.
The way I look at it is that “Zeek Rewards” wants to make sure this is a real opportunity for the long run. I’m very happy with all the changes over the last 7 months and think they are going in the right direction.
The fact that they have brought the top legal attorneys tells me that they are doing the right things!
Those of us that are willing to roll up our sleeves and go to work can build a great income! I’m over 125,000 points and have been pulling 20% for two months. I have always sold this as a business and always will.
Those people that pull out I wish them the best. Six months from now they will be sorry they left. Of course those people will be jumping from one thing to another any way and will always fail no matter what they do!
I’m here for the duration!
Richard T.
You obviously did not read anything from my other post, Zeek is simply unsustainable with the current business model.
Even if everyone DID give their bids away to REAL “customers” those people would all have to continue to purchase products from Zeekler with their own money after they use the free bids which almost never happens yet you still get paid just to give the points away even if they failed to generate new income.
It’s that simple it will fail unless they find a way to throttle what they are paying affiliates based on the income the affiliate actually generates and NOT some point balance.
Oz…
Two points. First, the New Business Opportunity Rule does not make the selling of leads or customers illegal, by an MLM company or otherwise.
There is a remote possibility that this may cause the FTC to consider an MLM company to be a “seller assisted” program and fall under the NBOR. It would be up to the discretion of the FTC and, as you pointed out, they have clearly declared that they will use the existing Section 5 of the FTC Act to determine if something an MLM company is doing is unfair or deceptive, not the NBOR.
And even if ZR were to fall under the NBOR it would only change their classification and require greater disclosure. It would, under no circumstances, make the selling of leads or customers illegal.
Secondly, there is no FTC “70/30” rule that requires 70% of sales be made to non-distributor customers. I think you have this confused with the “70% Rule” which states that 70% of all previously purchased products must have been sold, samples or consumed (by anyone) before more product can be purchased.
This was an “Amway safeguard” to inhibit front loading and stockpiling of inventory. It, in itself, isn’t even an FTC rule. In fact, the FTC has specifically declared that they have no such threshold as far as what percentage of product must be sold to outside customers.
@Len
What about paying out commissions for “sales” before you’ve even sold your members leads or customers? They can’t make sales if they don’t exist!
I don’t believe I actually stated that selling leads or customers was illegal. There are far bigger problems with ZR’s business model.
In getting rid of the 5cc though ZR certainly do hint that they think it makes them illegal – and they supposedly have the lawyers…
Seems to be different interpretations of it:
Either way, ZR fail on both accounts. Giving bids away is not a sale of a product, yet this is the action required to earn a commission.
No sale means it’s a cash investment on behalf of the ZR member. Paying the company a small fee to dump the bids back onto the company and instantly start to earn a daily return means it’s a passive investment.
Here’s the FTC on “inventory loading”:
The basement analogy doesn’t work with VIP bids however we know those using the 5cc are generating more points then being given away because there’s a queue for the allocation of 5cc customers to members (despite the fact that commissions are paid before members receive the customers they have paid for).
Also there’s a 100% complete lack of retail sales with the VIP bid investment scheme, 100% of the purchases of VIP bids to be given away are by members. Given this is where the bulk of commissions are being paid out, this is a huge red flag is it not?
Source please.
Agreed. This would be legally problematic. However, it is completely unrelated to the point I am responding to.
I did not intent to attribute this claim to you. This was Zeek’s explanation for making their changes to their Scc program. I was explaining why their explanation does not hold water and is, as you have suggested, suspect.
This confusion, and the mistaken belief that the 70% Rule is an FTC mandate requiring MLM companies sell at least 70% of their products to outside customers, is primarily the responsibility of certain prolific anti-MLM critics.
There was also the mistaken belief that the FTC was now requiring a 50% Rule after their legal actions against companies like Jewelway and Five Star Auto Club where the FTC removed a Temporary Restraining Order after these companies agreed to sell at least 50% of their products to outside customers.
As a result of this confusion the DSA formally requested an Advisory Opinion from the FTC on this specific issue. The FTC responded that “the amount of internal consumption in any multi-level compensation business does not determine whether or not the FTC will consider the plan a pyramid scheme.”
They went on to explain their their primary consideration was the motive for buying the product. If a rep was buying the product because they genuinely wanted it, that was fine no matter what percentage of all buyers these reps represented.
If, however, reps were making only token product purchases just to meet a commission quota, and otherwise wouldn’t have purchased the products, this was indicative of an illegal pyramid scheme.
Furthermore, the FTC explained that the actions taken against certain MLM companies where they required 50% of products be sold to outside customers were “provisions that place extra constraints upon a wrongdoer that do not apply to the general public… They do not represent the general state of the law.”
Marketwaveinc FTC_Letter.
Glad we agree on that point.
I’ve read the letter you linked to, but the above on its own certainly seems to indicate that unofficially it’s being taken into consideration. I guess it depends on how much weight the FTC give their previous decisions.
In dealing with the FTC I don’t see why a company couldn’t point to a previous decision they’d made (such as the 50% deal) and ask for the same sort of deal?
Doesn’t that therfore imply a defacto relationship between a requirement to sell to outside customers and FTC regulations?
I think it’s pretty obvious that when company members are purchasing enough inventory that in turn generates high enough commissions that the FTC take notice and investigate, the motive is the commissions itself.
Regarding Zeek, 100% of the VIP are purchased by members and close to 100% of these bids are given away in exchange for VIP points.
The sole motive? Participation in the profit-share. More bid purchases = more points = a larger portion paid out of the profit-share .
Zeek Rewards members can spend the VIP bids themselves but let’s not waste our time pretending that’s happening in any significant quantity.
Kinda makes you wonder why the FTC haven’t got involved yet…
70% rule is a further interpretation of the 9th Circuit Court decision of “FTC vs. Omnitrition”. The full analysis by Spencer Reese of Grimes and Reese LLP, noted MLM lawyers, can be found here.
http://www.mlmlaw.com/saleswatch/omnitrition.html
The “70% rule” is not a hard rule. But it seems to be a good general “guideline” and has served the industry well for a couple decades since the Amway decision way back when.
The idea basically is that they don’t want to completely discourage internal consumption. As stated in the letter, the trick is determining the intent, whether the intent is to really sell the products (and be rewarded for the sales as a bonus), or is the intent to earn the commission, with the sales being incidental (which would make it a pyramid scheme).
The problem here is that ZeekRewards itself is confused on what exactly is its product(s). They say it’s the bids, but no ZR members is reselling bids, and no ZR member is getting any commission off of them.
So what’s the pyramid structure for, other than to grab the monthly fees?
You are referring to Webster vs. Omnitrition. The FTC was not involved in this case. This was a class action lawsuit filed by two people claiming Omnitrition was an illegal pyramid.
Omnitrition won on summary judgement (summary judgements occur when the plaintiff’s case is so weak, and they have so little chance of prevailing that, in the judge’s option, the case should not be allowed to waste the court’s time).
The plaintiff’s appealed the summary judgment to the 9th Circuit Court – the most overturned appellate court in US history (the same one that ruled the Pledge of Allegiance was unconstitutional) – and the decision merely overturned the lower court’s ruling and sent the case back to trial.
The 9th Circuit court’s decision did include “dicta” which suggested product sales to distributors should not be legally commissionable. However, dicta is defined as:
The Omnitrition case was settled out of court in 1994. Omnitrition is still in business today.
Furthermore, the 70% Rule could not have been a “further interpretation of the 9th Circuit Court decision” as the 70% Rule was enacted by Amway, and cited in the FTC vs. Amway case, in 1979.
Mr. Chang,
Your second post, which I completely agree with, was submitted while I was composing my response. You are correct that the 70% Rule is not a “hard rule”, and certainly not law.
Interesting. I liked the fact I could place ads daily and make money, although I knew it sounded too good to be true.
We’ll see how this plays out with Zeek Rewards. Thanks for the post!
I’m sure FTC filed an amicus brief in the case, but thanks for the correction. It’s good to know the “sidenotes” and the full context of the decision.
Wake up people this has nothing to do with any legality. ZR is a ponzi. This is just the first sign that they need cash infusion.
They can try to make it sound like they are trying to get legal but this solves none of their issues on that front.
They have over the amount of investors required so they need to file with the FTC. Also, know any non ponzi company that you invest in and can’t see company financials?
It’s a ponzi and it’s starting it’s death. Don’t buy into the BS.
@Len and Kasey
I think we can all agree nonetheless that any MLM company would be wise to adhere to the 70% rule in some way or another, regardless of which interpretation they decide to use.
Zeek appears to fail on both accounts.
Regardless of which companies the rule has applied to, it’s clear that under investigation the rule is being cited in couts and forming a basis of negotation and proceedings.
If viewing this from a cynical view point, I do not agree that “this is the first sign that they need cash infusion”. If they need cash infusion, they would make it EASIER, not more difficult, to continue the ponzi.
The more likely cynical view is that they are scrambling to make it legal to avoid any criminal or civil legal action now that they principals have made their money, and as yo usaid:
If they only needed cash infusion they would not do what they did with the PRC requirement.
@ Jimmy,
2 things a ponzi tries to do when money runs short. Get a cash infusion or pay less people. This move of having to get 2 customers will disqualify how many ‘investors’ from getting paid each month?
What they missed is people who can’t get 2 customers and will run to the FTC cause they aren’t earning their daily %. Anymore.
This is nothing more then a cleverly designed ponzi. Remember the old saying “if it’s 2 good 2 be true….”….
Where are all the Zeekers who said no recruiting ever, I must have had 20 people try to recruit me into this, all saying there is no recruiting, even before this change. And believe it or not, Someone is Skyping me right now about it.
Desperate times ahead I think and looking at this feed there is going to be a mass exodus, and the money is not physically there. Oooops, Interesting.
@MB — of course there’s recruiting… Says prominent on their webpage (getpaid.php)
Oops, forgot to bold and earn up to $3.50/month on every paid subscriber in your personal 2×5 forced-fill matrix
NONE! That’s my point. The PRC moves discourages new investors and encourages more people to cash out.
You are making the assumption that getting PRC’s is required to get paid. That is not true. You can sign up zero customers and cash out your account over a 90 day period. You can still sign up free customers to continue your daily profit share.
The high balances will just create fake PRC’s because it only costs $20 a month and they are already paying $50 a month using the 5cc. The only explanation that makes sense is ZR is looking to avoid criminal and legal liability.
If they were focusing on the ponzi itself, the PRC move makes absolutely no sense. It stifles new investor cash and encourages existing investors to withdraw.
This will be few and far between, if any. Unless you have over 20,000 points or so, you can still give away 1000 bids per free customers. You either have at least 10 to 20 customers already from the 5cc, or you create a few fake free customers per month.
The only people who need the company rotator are ones with large balances, and they are not likely to run to the FTC. They will either gift PRC memberships or cash out and be done with it.
Why call in the FTC when you have over $20k you can cash out? You only call the FTC if you’ve been screwed and cannot cash out.
I’ve been reading this discussion and I appreciate a healthy debate regarding ZeekRewards. For disclosure sake, I have been a member since June 2011, I have tens of thousands VIP and a downline of thousands of which 7-800 are active.
ZeekRewards has been making every effort to meet govt compliance since early 2011 when they hired Gerald Nehra;atty at Nehra & Waak. They since added MLM consultant, Dr Keith Laggos, and Kevin Grimes;atty of Grimes & Reese.
They have made many changes recommended by their team above. And last year they told us more changes were coming as they adjust to compliance recommendations. I’ve had the opportunity to hear all of the lawyers and consultants talk about ZR compliance and business changes.
Kevin Grimes team is developing a compliance course that every distributor will have to pass in order to continue to earn in ZeekRewards, just has he has done for many top MLMs.
I am happy they have spent the last 6-8 months changing for the long term of the company…this didn’t just start last month as some would have you believe. Only time will tell if these top lawyers/consultants will have us in good shape.
Note: they are not making changes because of lack of revenue or to create more revenue. As Jimmy posted, eliminating the 5cc would more likely have the opposite effect and we know there are people cashing out because they want to be passive.
In fact, let me touch on cashing out. Members cannot cash out VIP points. They have no monetary value. We can only cash out the daily earnings we receive based on our VIP size. We buy bids, not an investment. It is a one-time purchase and the money belongs to ZeekRewards, not us anymore. An investment implies that the money we used to purchase bids in ZR is still ours….It is not.
Since each VIP point has a 90 day earning cycle, it would take 90 days of cashing out before your last VIP expired. No member has any money invested, We buy the bids and ZR owns the money….It’s a sale. The capital you used to buy sample bids is not yours anymore..you did not invest, you made a one-time purchase. We can personally use them, give them as samples or sell them.
The 70/30 inventory rule was taken care of when lawyers told us we could not keep the bids we were stock piling, so the change was made to give them away around Oct/Nov 2011 I believe. You can keep them for personal use, but you will not earn on them. So no one keeps bids(inventory).
And now that people have to get their own customers, the 5cc bid pool will shrink to zero, and soon every rep will have multiple customers. Even though some reps don’t have customers, I recall one of the attorneys telling us on a call that he was impressed by the quantities of customers that zeek has in the company. He stated, they have many times more customers than reps. And of course most customers don’t buy or repurchase, but that’s the case in every MLM where probably less than 1% repurchase.
Getting customers is pretty easy, I got 60 in the last two days for less than $2 advertising for each. They do get free sample bids for signing up. Yes some members will leave, but keep in mind, no one has lost money, almost all will stay.
ZeekRewards gets it’s revenue from the auction, online store, affiliate subscriptions, sample bid purchases from affiliates and retail customers. Is that any different than other MLMs?
Most legitimate MLMs make the majority of their profits from the purchases of affiliates not customers. Most MLMs pay their affiliates profit share/commissions from the purchases of the downline affiliates below them. It can be daily, weekly or monthly. Most MLMs require you to buy product to qualify for commission. Very few legitimate MLMs make the majority of their money from retail customer purchases.
It seems to me ZR is similar to most mlms, just with different commission packaging.
Let’s replace bids(product) with a super juice/vitamin. You join Monavie, Noni or Xango and buy the $30 juice(bids),not invest in the company. The company says, if you give away a $30 bottle of juice/bids as samples to customers and place one ad a day for our company to get the word out, we will give you 30PV/VIP to earn a commission/profit share on. We will pay you 90 days commission on each PV point you have and we will pay you daily instead of weekly.
Now, if some of those customers buy, we make more money and you get more commission/profit share. And, the more bottles you buy and give out as samples, the more PV/VIP you will get and the more commissions you will earn daily.
Now, the more affiliates you get to join and buy bottles of juice, the more commissions you earn because most of our revenue comes from the affiliates, not customers and we share 50% of the profit in our juice pay plan. We could just pay you commissions once monthly, but we will divide your commissions into daily increments so you can get excited daily.
I really don’t see much difference between ZeekRewards and the MLM juice example above, it just seems to be different packaging. They both pay out about 50% of their profits.
Healthy debate appreciated.
Here is the deal… If your in, get whatever money you are entitled to and get out.
If your not in don’t get in.
I am a fully trained and experienced CFO for over 20 years and let me assure you, the only ones who make out here are the owners and their top, first in people, who are inevitably placed there by the owners. This is where the “success stories” come from.
This is a failure by design and far from legal no matter how it is dressed.
Also, ZeekRewards did not, admit their “business model is illegal” as stated in the title of this thread. They just eliminated their 5cc customer program BEFORE the new law took affect on March 1st because selling customers to the affiliate base would have put them into another business category.
That new category would have put them under more regulations I believe. They are also NOT, “drowning” in excess points.
It would be really, really be cool if the writer of the article could post proof of each of his/her assertions so people reading this could verify the story.
@BD
What kind of arsebackwards business launches, makes a boatload of money and then worries about legalities?
They canned the guaranteed returns in mid 2011 didn’t they? I think that was the first step towards not running such an openly obvious ponzi scheme but all they’ve done since then is mask it. Fundamentally it’s still the same, although the introduction of required PRCs does change it somewhat.
As long as at the end of 90 days you have >100% then the money you put in, then it’s an investment.
What genuine product purchase leaves you with not only the product you purchased, but also a greater return than what the product cost after 90 days?
Only an investment holds this characteristic.
ZR does not own the money, they pay it back to you – infact they pay more than what you pay them, so neither is the money ‘safe with ZR’ or ‘theirs’. It’s always yours (as long as they keep paying more than 100% after 90 days).
Giving away “product” is not the same as selling it.
And it will be a big test to see how they can survive when all the ‘passive investment’ investors jump ship. Some will put some effort into creating fraudulent customer accounts but whether or not Zeek choose to clamp down on this obvious practice remains to be seen.
Requiring nothing more than an email address for customer verification is laughable.
Of course it is. Zeek Rewards get the bulk of their commissions from affiliate subscriptions (and the money they invest during a rolling 90 day period).
This is vastly different to legal MLMs that are genuinely product based and not masked investment schemes.
Nobody is shopping at Zeek’s retail stores and the penny auction side of the business is not viable enough to provide sizeable revenue to even pretend it’s the main source of revenue for the profit share. Traffic stats place Zeek Rewards far above Zeekler itself… that speaks volumes about where the money is coming from.
No, they make it on retail product sales.
With a matching bonus perhaps, but this does not and should not make up the bulk of commissions.
They don’t do this precisely because doing so would make the product irrelevant and turn Monnavie into an investment scheme.
In true product sampling you create an expense by absorbing the cost of the product you purchase to sample out and attract customers.
How can you claim sampling bids is a business expense when you earn a >100% return on the money you invest each time you “buy” bids?
Also the bulk of revenue from juice companies is from the (retail) sale of juice. The delivery costs and storage of $10,000s of dollars of juice would mean trying to mask an investment scheme behind a juice company would be impractical. Online bids are a virtual item and overcome these obstacles – however it’s still just an investment scheme.
And if there are no retail sales of juice then what? You can’t just assume the retail sales will cover the returns on money being invsted that the company has to pay a return on. Yet that’s exactly what ZR expect people to believe: ‘Our penny auctions will continue to grow at an infinite rate to cover the returns we owe to our members’.
That’s nonsensical.
Look harder then. As you can see, the juice comparison falls short because Zeek Rewards is not using the same model they do.
There’s a reason no legit MLM company has ever adopted the investment scheme model Zeek is using, and it’s because it makes the product irrelevant and shifts the focus from actual product sales to investment.
If members can purchase inventory, give inventory away with no incentive to generate retail sales and earn >100% returns on the money they invest – there’s a serious flaw in the business model.
But this is not unique to just Zeek Rewards, all Ponzi schemes have this flaw. It’s why they’re illegal.
They had business model A, and said they had to change it due to the law – ergo their business model is/was illegal.
Ponzi schemes are illegal in any case so it’s a moot point.
And those regulations would have most likely required Burks to reveal the percentage of revenue generated by members investing money and exactly how much the penny auction side of the business makes.
For Zeek that would be disasterous and something to be avoided at all costs.
Then why is there a queue for 5cc customer allocation? Furthermore how does the company pay out a return when they haven’t even assigned your points to customers yet?
Ask Paul Burks to reveal the exact profit share makeup of member’s invested money. Failing that, analyse the traffic levels of Zeekler, the auctions themselves and then take a look at the money people have invested in ZR.
Also ask yourself how penny auctions can experience infinite growth to indefinetly cover the investment returns ZR have to pay out.
That should be all the proof you need.
This past weekend I spoke at the annual ANMP event (Association of Network Marketing Professionals) where both the CFO and VP of Compliance for Zeek Rewards was provided stage time to describe and discuss their situation.
As BD has just described, ZR has expended great effort over the last several weeks in an effort to eliminate their program’s legal vulnerabilities. While they may deserve criticism for not taking these steps before ZR was launched, sans building a time machine they appear to be doing everything they can and need to do to legitimize their program moving forward.
For that they diverse praise, and at least some patience as we see how this all shakes out. Obviously Zeek Rewards is still in the process of morphine into a very different opportunity.
The only issue I still have at this point is why ZR is alleging the 5cc aspect of their plan was eliminated because they are “no longer legally allowed to provide customers or leads for purchase” due to the FTC’s New Business Opportunity Rule (NBOR), which they reiterated at the ANMP meeting.
While this may certainly be an honest misunderstanding, it is also utterly untrue. Not only does the NBOR not make the providing of leads or customers “illegal” (it would, if the rule is applied, only require additional disclosures), but as is clearly stated in the NBOR (and was confirmed by the legal panel that spoke at the ANMP event), the NBOR does not apply to network marketing companies.
I’m sure there are good reasons why their new legal team (which is top notch) advised them to eliminate this aspect, but it definitely wasn’t because the NBOR made the supplying of leads and customers illegal.
Len
@Len
The best I could come up with was that ZR didn’t want to put out “additional disclosures” as this would reveal the ponzi aspect of the business, ‘Yeah so we make 99% of our revenue via member investments and membership fees and the penny auctions are irrelevant’.
Even if it means fundamentally changing how the business works for passive investors, masking the scheme has to take a priority as everything they’ve done since they started fiddling with things in mid 2011 has been solely to work towards this objective.
If they can maintain a classification where they don’t have to reveal they are a Ponzi by eliminating the 5cc than so be it. As you state, the FTC “making them do it” is just a cover story. I mean hey, they’ve got people believing their penny auctions are magically sustaining everything so why not that the ‘big mean government backed FTC are making it harder for the honest businesses out there like Zeek Rewards’?
Zeek Rewards management operate under the pretense that their business model is some great proprietary secret and this is why they can’t reveal what % of their revenue is generated by membership fees and investments. A percentage is not proprietary and we already know the business model.
Penny auctions are no mystery and sharing out revenue is not some secret that nobody understands or can’t duplicate.
The only other explanation thus is that publicly revealing the percentage would give the Ponzi game away.
The disclosures that would have been required by the NBOR have nothing to do with the company’s financials, or anything involving their internal accounting. What ever the actual reason is for ZR removing the 5cc aspect, it is not likely to be the one you have theorized.
Len, you seem to be an unbiased observer. If you find out the facts regarding the 5cc, please let us know. Many of the reasons given above are just pure assertions.
I might listen to the call with Kevin Grimes again, I believe he was the one who gave the reason, although I could be wrong.
I’m satisfied the ZR management is committed to legal compliance and improvements.
thx.
@Len
As a passive investment scheme, Zeek worried they would be required to provide the above – hence the PRC shift if you wanted signups from the company.
Wouldn’t the percentage of the penny auction revenue, given that this where Zeek Rewards claim the profit share comes from, that makes up the profit share be required to be divulged?
They wouldn’t have to put out a dollar amount but surely a percentage? Hardly a proprietary secret as Zeek Rewards management makes out.
@BD
Lol, so you enter the discussion with a bunch of points, get responses you don’t like so choose to ignore them and your simple reply is
Come now, that was already your position, irrespective of any discussion on here.
What, you think you’re the first person to try and compare Zeek Rewards to legit MLM companies? Enjoy your Ponzi.
BD wrote:
Oz wrote:
I have a better idea. Add up all of the daily auctions that you see. Assign some discount to account for the bid dilution (free bids, buy-one-get-one-free, bids given to subscription members e.g. Diamond subscribers get 250 bids per month, 10 bonus bids given per new customer, etc).
Whatever your final discounted rate is (e.g. $0.20 per retail bid, $0.40 per VIP bid), now count the number of bids in those two auctions items that you’ve seen each day. That is your revenue number.
Don’t worry about being exact or estimating the premier auctions correctly and accounting for expired bids. You can be off a factor of 10 and still reach the same conclusion.
Now do the analysis and consider:
1. How is it that the revenue rate from auctions are not increasing at the same parabolic curve as new affiliate growth and investment?
2. How is it possible that the auction revenue can account for the daily profit share even if your estimates above are off by a factor of 10?
I assume there is almost zero revenue in the wholesale club store (or significantly less than 0.1% to not be a factor) and that the monthly subscriptions are all inclusive in the VIP bid estimate above.
Can you see that it’s impossible for the auction to support the investment pay outs? How many (ever increasing) virtual points do you think are in circulation?
You can estimate from the income disclosure statement at least 15 million points as of Dec 31, 2011 in the US alone. If you account for +2 months of growth and if you assume US is 80% of total business, say there is net 30 million VIP points in total distribution across all accounts.
These aren’t free bonus points but actual VIP points that pay profit share daily.
That’s an AVERAGE of $450k, ever increasing daily, that ZR pays out in profit share. The ONLY REASON the ponzi stays afloat is that not everyone is withdrawing that money. If everyone starts to withdraw the daily rate will plummet extremely fast and the virtual points will get crammed down (an equity dilution term) 10-to-1 very quickly.
Let me rephrase the question another way. If no new affiliates join, and the existing paying customers pay the same amount they have been forever (i.e. no one quits the auctions, whatever a customer spent last month they will spend the next month, to infinity), can ZR still pay the same daily profit share? Absolutely not!
This proves in a different way that the revenue coming from the penny auction is insignificant.
Zeek knows that the only way to keep money in the ponzi for the high balances (people like @BD with 50,000 points and up) is to give away free customers. Otherwise the passive investment part of the ponzi goes away and everyone withdraws their money at 0% repurchase.
If Zeek was really concerned about this rule, then why would they allow you to have unlimited free customers (just like the 5cc) after signing up just 2 PRC’s (at $10 each)? In fact, people like @BD will be paying less for PRC”s ($20/month) than he was for 5cc ($1 per free customer to give away 1000 bids).
If Zeek was really concerned about the rule, they would not assign ANY free customers and require PRC’s and free customers only.
@Len Clements
The reason why is quite obvious. Zeek corporate has always been much more worried about the INVESTMENT scheme than the MLM plan. They hide behind MLM language because the majority of the affiliate base are MLM’ers.
When Peter Mingils goes on Zeek leaders weekly calls and says how he’s never seen any MLM company take these same steps and what a leader ZR is, well, there’s an obvious reason for that! Other MLM companies don’t have a ponzi investment scheme pretending to be an MLM.
How many MLM execs have gone to jail ever? Usually MLM companies that run afoul of the law just pay penalties and face civil suits. But illegal investment ponzi’s fall in a completely different category. So ZR is doing everything it can to avoid the scrutiny of an investment scheme.
You can strip away all the MLM aspects of the business. Remove the matrix completely and leave it at 10% and 5% only. You still have an illegal investment scheme where the “equity” is masked in points. All the risks of running in investment scheme are still there.
You take a traditional product MLM and do the same (pay out straight affiliate commissions only and no more matrix), and you don’t have this problem. Therefore, the MLM aspect has nothing to do with the legal strategy, it’s all about the investment scheme.
All of the changes in Aug 2011 had nothing to do with an MLM – but only to do with not wanting to be shutdown by the feds as an illegal investment scheme. Just because you are not allowed to use the world “investment” and “compound” doesn’t mean it doesn’t happen.
If I commit a crime and use different vernacular to explain what I did, does that mean the crime still didn’t take place? Is Bitcoin not a form of currency no matter how they try to change the language (to avoid banking law scrutiny)?
@Jimmy
I never said or ever believed that all the revenue to pay affiliates was generated by the auction.
In my post I stated several ways ZR generates income which included revenue from the auction and reps purchasing the product sample bids.
But, I was making the point that Juice mlms rely on the money spent by affiliates also to generate most of the revenue they pay other affiliates. I would be surprised to find the average juice rep has 2 customers that buy the product monthly. So most of the juice affiliates incomes are coming from the product purchases of other affiliates coming into the business and purchasing. I know…it’s normal for mlm.
By-the-way, accounts don’t increase by .015% a day because of the expiring bids. An excel spreadsheet will show that we need over .011% just to break even and keep the balance of VIP bids from decreasing before withdrawals. So the actual percentage earned is probably more like .003%
When you consider that we will not withdraw more than 20% of daily earnings it drops to .0006% (.003 divided by 5) that the company is paying and at any given time the majority aren’t withdrawing at all…maybe 10%, so the real percentage the company is probably paying daily is more like 10% of .0006 or .00006% daily.
Which is like only .06 cents actual profit share being withdrawn daily for every 1,000 VIP in the company. Zeek would have to generate about $2.00 per month for every 1,000 vip in the company…seems very possible to me if my math is correct, but we’ll see.
So, as with most mlms, a little retail money and affiliates purchases of Juice or Bids can sustain the business.
Sorry what? Legit MLM companies don’t have profit share, so how does this example even make sense? If Affiliates are pumping money into the system and not making retail sales, how are they making money?!
You’re attempting to dress up MLM companies in the same clothes Zeek wears. Legit MLM companies need to have at least 70% of bought product finding its way to customers. If this is done via samples then the members of legit companies make no commissions. Any residiuals they might make on their downlines certainly aren’tenough to stay in business.
Your understanding of legit MLM appears to be quite lacking.
On one hand we have Zeek reps coming in here telling us Zeek is some revolutonary MLM business model accountants around the world are blowing their loads over, then there’s reps like you stating Zeek is just like every other MLM because all the revenue comes from members own money… which is rubbish because retail sales are what makes or breaks a MLM company in the long term.
Seems like the ZR marketing team has done quite a number providing members with bullshit comparisons and statements to run around parroting in their defense.
My point was simply that no matter what the RATIO is between auction and affiliate, it is so far out of whack that it is an obvious investment ponzi and unsustainable.
Using your example, if no new MLM distributors or customers join, say you freeze all new revenue and lock in all existing retail customers and affiliate autoship, and magically require that everyone spend the same amount next month as they did this month to infinity. In this case, the product MLm is sustainable. The guys with large downlines do well, the ones without just consume product, and the MLm company makes money.
Now do the same hypothetical revenue freeze with Zeek. What happens? It all falls apart and investors who joined late lose their investment and the lawsuits start flying. People who got in early like you and have 5 and 6 figure balances have already made your money. What about the thousands who joined before the RPP rate dropped below 1% and are left holding the bag?
Oz…
You made the claim earlier that MLM companies are required to sell at least 70% of their product to retail customers. I explained that this is not true, I provided the evidence, you requested the source, and I provided it.
Yet, you’ve just claimed again that “Legit MLM companies need to have at least 70% of bought product finding its way to retail customers.” Why have you repeated this claim when you now know it is not true?
The 70% claim is practically irrelevant anyways. No one goes to jail for violating the 70% rule. It may be a good indicator of MLM longterm viability but many an MLM has violated this rule with minimal or no liability.
The ponzi investment scheme is where all of Zeek’s liability exists. All the changes since the lawyers came on board have nothing to do with MLM despite the spin. The changes have everything to do with wrapping the ponzi investment scheme in disclaimers and verbal sleight of hand to change the definition of compound interest.
@Len
I wholly took what you added to the discussion on board and was very specific with my wording. As I understood it we’d agreed at least on the intent of 70% of any product being purchased by members as having to be consumed. I might have been a bit blanket in defining customers but the point is you can’t stockpile.
I note I did include retail and I’ve removed that accordingly (mistype).
Furthermore as per subsequent rulings it’s clear that this rule is open to interpretation (as per the attorney articles linked).
That in itself seems proof that they are adding the constraint to those who are inherently not following some sort of interpretation of the 70/30 ruling.
Long story short, whilst we can disagree on the specifics I hope we can agree that by ignoring the previous rulings and decisions completely companies are setting themselves up for trouble.
I also would like to think it serves as a good indicator as to the viability of a business. Forget the legal definitions for a second and think about it. If a company has its members purchasing the bulk of product how is that remotely sustainable in the long-run?
Forget the FTC, on that point alone I think it’s a worthwhile indicator and definitely has a place in the discussion about Zeek and MLM at large.
MLM first and foremost should be about marketing products and services to retail customers. It shouldn’t be about operating borderline scams within an umpteenth fraction of a hairline between legality and illegality.
@Oz
“70/30 rule” or “50 percent rule” is only one of the indicators, and not the most important one.
A company can have lots of retail customers joining as distributors, just to be able to buy products at wholesale price, while they’re not very interested in working with selling the products. The real motive for joining is the wholesale price.
You can also have retail customers working part time as distributors, like a couple of months per year or less, while they’re inactive as distributors most of the time.
The “50 percent rule” in Europe is the same as the part of the definition “compensation that derives primarily from recruiting others into the scheme rather than from sale or consumption of goods or services”.
@oz
I pulled what I really said above in the green box. Zeek makes its revenue from several streams.
MLM is a complicated subject and new companies are trying their darn best to obfuscate the situation with multiple tracks, jump-overs, and whatever jargon they want to use.
FTC tried a new tack with “FTC vs. Jewelway”, in requiring 50+% of retail revenue come from sales to non-participants, which can be considered sort of an extension/clarification of Omnitrition case. Even that criteria was loudly lambasted by DSA and MLM lawyers.
Though I agree with Jimmy: ZeekRewards has a multi-level structure, but it is NOT behaving like a MLM at all, and it is paying money AND charging subscription, which pretty much only leaves “Ponzi Scheme”.
@BD — a MLM is supposed to be marketing SOMETHING, either products or services (or both).
The super-juice/fruit/nutrition/cosmetics/etc. MLMs are simple. But there are also MLMs that sell family counseling, lawyer services, accounting, and so on. The idea of a MLM is still retail (at least the legal ones), albeit the organization is somewhat different.
ZeekRewards by this definition, does NOT qualify as MLM. Because as ZR members, you are NOT selling anything and profiting from it.
ZR members are essentially paid to advertise Zeekler, but instead of getting simply paid for how many links posted or how many bids given away and people signed up/registered, you instead must subscribe to ZR (get silver or higher level) by paying money, and qualify for payment via this complicated VIP point, expiring, profit share, and blah blah blah that NOBODY really knows how to calculate except the the two doing it.
If they pay you simply for the # of paying Zeeklers who signed up they wouldn’t have any problem at all. it wouldn’t even need a pyramid structure. Instead, this pyramid structure, each level of which must have PAYING members, leads to a pretty inevitable conclusion that this is a Ponzi scheme fed through multiple income streams: monthly subscriptions, new members buying bids, AND Zeekler auction profits.
@BD
Since you math explanation was rather unclear, please try to explain it in a different way?
“For every 1000 VIP bid”, “generate about $2.00 per month”, etc.
If one person has 1000 VIP bids, they should increase by 15 the first day. If he withdraw 20 percent it equals $3.00 the first day.
Check your calculation, please?
@BD
But if the rate were to drop below something like 1.3%, you are not going to be able to recruit new investors. Other affiliates will recognize that “the rate is dropping” and they will all start switching to more aggressive cash out option.
Even if theoretically you need to maintain above 1.1% with 90-day bid expiration, the problem is you cannot continue to investment scheme when the rate drops below the marketable rate. That rate is about 1.3%. 1.3% is also the rate at which 80% repurchase sustains the current balance.
When the rate drops below that, those high balances today who are are 80/20 will also start withdrawing more aggressively.
The above is a classic run-on-the-bank scenario. We don’t know what the rate that triggers the landslide is, but a good estimate would be around 1.3%. 1.2% to 1.25% is just not that attractive.
Further, even if your 20% payout example is using accurate revenue and withdrawal estimates, it is still flawed because:
1) Investor growth must be maintained, and at a very high parabolic rate. If no new recruits join, and everyone does nothing, the system collapses. At some point, the number of new investors will not increase at the same rate as the point balance grow X the withdrawal %. Then what?
2) At some point, usually around 5 figures point balance, affiliates move from 100% reinvestment to 80% or less. You have a groundswell of affiliates who will soon start hitting 5-figures balance (think of them like baby boomers in US being eligible for social security). And if you fast forward another 3-4 months, you have an even larger population hitting that range.
So the net total amount being withdrawn will increase significantly soon as you have much fewer people leaving their repurchase at 100%.
It’s a true pyramid model, with the center of the pyramid soon beginning to want to cash out some, even at 20%, the total cash out will be significantly more than what Zeek has paid to date. Can the revenues sustain the payout requests?
@BD
“Other MLMs”, the legit ones anyway, don’t generate the bulk of their revenue from membership fees and investments.
Think about it, how easy would it be for Burk to just completely dispel the ponzi suspicion (which isn’t just based in randomness) and declare what the percentage of profit share is made up by investments and membership fees.
Instead he claims it’s a proprietary state secret – now why is that?
@Oz
Not to mention it is totally ludicrous to think that any penny auction would actually use Zeek Reward’s model. The top 100 affiliates are taking home over $100k per year, with the top ten significantly more than that. How is paying them (plus all the other affiliates) to place free classifieds ads anywhere a good business strategy?
Any one with any business sense would immediately realize that the entire sales story makes no sense in the first place.
Imagine what kind of advertising you could do for just $1-2 million per year? You’d get much more effective “ads” than what the entire Zeekler affiliate community is doing, and you’d be able to dominate any pay per click niche. You could be the top survey in every Facebook game. You would dominate internet marketing for penny auctions, and all for a fraction of what you are paying affiliates in profit share.
Now if you’re running an investment ponzi, you have to keep paying those already in. Ah, now that makes sense.
The interesting twist on this is that based on virtual points, Zeek won’t just pick up shop and disappear, but instead will lower the daily profit share in a form of currency devaluation. So instead of an instant exit, we’ll see sites like this flooded with victims as they try to extract what monies they can over a 90 day period.
When the time comes… in the mean time, those of you with high balances can keep milking the ponzi cow for cash.
ZeekRewards doesn’t generate the bulk of their revenue from membership fees and investment, as you say. There is no investment.
ZR generates it’s revenue from the purchase of the product (bids) by customers and affiliates, Penny Auction, online store, and a once a month membership. All legal in mlm.
You are looking at the purchasing of bids as an investment and that’s just not true. Bids are an electronic product that is bought. When you go to Quibids, Skore-it and any penny auction you see on tv, you buy their product (bids). Quibids makes a profit on every bid sold. Then Quibids takes a percentage of their daily profits from bids and their penny auction and shares its profit (daily profit share) with abc, nbc, cable, etc.
Let’s say Quibids pays back 30% of their bid and auction income to advertisers. They could sign you and I up as affiliates and say if we buy sample bids, give them away and place one ad a day, they will share 30% of the profits with us too. So, for every $1 bid you and I give away or sell to one of our customers, .30 cents goes toward paying us daily profits over a 90 day span and advertisers.
That’s all zeek is doing, it’s just the packaging of the pay plan is different and unfamiliar to you, but it’s the same math. It’s just a question of:
1. whether or not the buying of bids is considered a product purchase or an investment. It’s a product.
2. does the company pay us back more than the cost of each bid purchased by customers or affiliates. No, they don’t..read on.
And it’s already proven by all the penny auctions worldwide that buying bids is a product purchase.
Now, I expect your rebuttal to be, Yea, but the other penny auctions don’t pay interest on each bid that is sold….and neither does ZeekRewards. Again, Zeeks pay plan is just another way to pay 50% of the company profits back to affiliates, no matter if they used a hybrid, unilevel or profit share, model.
We’ve already established, VIP have no monetary value just like PV in other mlm’s. It’s just used as a basis to pay commissions/profit share. So your VIP or PV is not your investment, it’s just a point value given to the products (juice, bids, cell service, online tools, vitamins, etc) you purchased. And it doesn’t matter if the product is physical or digital, it’s still a product of value.
Now, it is a fact, that it takes more than 1.1% a day just to maintain your VIP point balance…the spreadsheets of many affiliates will back that up. So, if Zeek pays us 1.1% profit share a day all our accounts would shrink to Zero, before we took out one penny, thus being no profits earned long term. We can all agree that 1.5% a day is close to the profit share the company gives out for each bid purchased by anyone, rep or customer.
1.5% – 1.1%( below break-even) = .4% (.004 actual). So each VIP point get’s less than .004% profit share a day. Over 90 days that’s .36 (90 x .004) cents actual profit share for each $1 bid purchased. They could’ve paid us .12 cents a month and called it commissions and no one would have had a problem with that, but because they use a daily percentage and call it profit share, it has confused the masses.
Reps can choose to pay themselves the .12 cents monthly per VIP or buy more bids and earn .12 cents/mo on more VIP for 90 days. Paying out 36% of your revenue as commissions after expenses is “acceptable” business practice for mlms.
You figure out of each dollar the company needs .28 cents to cover most fixed cost, then they split (50%) the .72 (.36) cents with us. They keep the additional .36 cents for infrastructure growth and profit for the company.
OZ and Jimmy, I agree with anyone that if a company has you invest without buying a product (physical or electronic) with a value and pays you back more than a buck for each dollar you put in without doing anything…..that’s a ponzi, but Zeek doesn’t do either of those things.
A. We buy a product.
B. Place one ad a day and give bids as samples to customers and sell them to customers. (Same as other mlms)
C. Company shares about .36 cents of each dollar of revenue with the sales force, give or take a few cents.
Also, they said last year, there will be a limit on the amount of VIP we can have. I’m sure they, their legal and consultant teams have figured out how to ensure longevity.
By-the-way, most mlms would go out of business or shrink if they weren’t making revenue from affiliates. Look at Monavie, they shrunk like a drying sponge when reps at the bottom starting quitting because they didn’t make enough off customers to pay their auto-ships or recruit.
So, eventually 99% of legitimate mlms shrink or stall as they build up their customer base over many years, then they level out.
There’s a problem in your description.
The bids were sold by Zeekler, NOT ZeekRewards. Penny auction, online store were also run by Zeekler, not ZR.
You’re talking about ZeekRewards and Zeekler as if they are the same thing, when they are not. Zeekler will continue to exist if ZeekRewards disappeared overnight. ZeekRewards is dependent on Zeekler, but not the other way around.
If they had comingled the funds AND operations, then they run a major risk of the whole thing being declared illegal if one part was declared illegal.
The question whether it’s a Ponzi scheme or not is quite simple: where is the majority of revenue coming from?
If you claim that majority of income is from the auction and stores and bids, NOT the monthly fee, then WHY have the ZR program at all? Why drain profit from Zeekler to feed ZeekRewards? What does ZR add to Zeekler, besides ads and monthly fees?
Logically this makes no sense. We don’t know what is the amount of profit share Zeekler’s paying out to ZR to be paid out, vs. what sort of customer base ZR brought to Zeekler in return, but ZR is a one-way money funnel: money goes in and generates almost nothing except ads.
On the other hand, the monthly membership fees WILL contribute to the overall bottom line of ZR and Zeekler.
So consider this: why have ZeekRewards at all? Why not keep all the auction profit for itself and post ads by farming out the ad posting?
The only logical answer is: for the monthly fees.
WRONG!!! The “product bids” being purchased is the investment for all intensive purposes of discussion.
What is the ratio of revenue for:
1) online discount store
2) penny auction retail customers (not affiliates)
3) affiliates “investing” buy buying bids + membership
I can guarantee you that #3 is at least 90% by looking at all auctions in the last X months and comparing it with the Zeek Income Disclosure Statement. Hence, this is an investment scheme. Pure and simple.
This is NOT a traditional MLM. A traditional MLM can run at a revenue plateau – where you replace distributor attrition with new ones, where you replace retail customer attrition with new ones. Zeek Rewards requires a constant in flux of affiliates at an ever increasing rate. It is a ponzi investment scheme and NOT a traditional MLM – not even close.
Secondly, with a traditional MLM if you do not recruit, you make no money. You can’t just sign up for the autoship and be profitable. With ZR, you can buy your 10,000 VIP bids and not recruit any new distributors or make any retail sales, and still earn massive amounts of profits. How is this not a ponzi investment scheme?
Or to provide a front for a ponzi investment scheme. They need a retail business to make it seem legitimate.
The opportunity calls with DD from Zeekler corporate are laughable. He spends 30 minutes out of 45 talking about how great the penny auctions are and how everyone loves buying at a discount. The auctions are almost impossible to win and no one will stick around long.
This is true in general of most PA’s and with Zeekler being one of the worst PA’s for the retail customer, there is no way the auction by itself will survive. So DD and others talking up the PA to imply that it is some new amazing revenue generating machine and offers a valuable entertainment product to consumers is all crap.
Just the fact that Zeek corporate spins the wonderfulness of their crappy PA so much is a good indicator of how trustworthy they are. The PA is a total red herring.
Technically, Jimmy… one problem with your assertion:
Technically, that’d be if you don’t RETAIL, you’d make no money.
If you recruit, you can pretend that’s retail with autoship and self-consumption.
@ Jimmy
Now, you challenging the validity of the MLM model….wow!
Jimmy, you might not be aware of this, but the mlm business model has worked for 50 years. That’s where the average person has the ability to make over $100k per year, even $1 million, just doing advertising, giving away samples, selling product recruiting and word of mouth.
So, I guess your, right the mlm concept makes no sense to you in the first place. And by-the-way, I believe I read somewhere that a large portion of all penny auction’s revenue goes toward advertising. You can give it to cable tv or you can give it to the home based entrepreneur.
Sounds, like you believe it’s ok for a CEO making 50 mil a year based on company revenue for sitting at a desk, while the people on the bottom make $10 hr, but not ok for the average home business person hustling sitting at our desk, building our business for 16 hrs a day until we get to six figures annually. It’s all fair game to me.
You know, it doesn’t hurt Amway, Herbalife and others paying millions to the people who built their home businesses over years. The little guy deserves what he works for too!
Now your saying all the reps in Monavie, yoli, etc juice product purchases is the investment just because the majority of their income is from affiliates personal use and giving samples….so, now they are ponzis too?…..stop.
You say investment, Gerald Nehra;atty; expert witness;mlm, Kevin Grimes;atty, Dr Keith Laggos and others say product purchase. When the experienced lawyers say product purchase, I have to assume they’re right.
When spout investment, it’s just your opinion.
Let me rephrase then. With traditional MLM’s, if I signup for only the autoship and then bring in ZERO REVENUE to the MLM, I will not make money.
With Zeek, you can bring in ZERO REVENUE and still earn profit share on your original investment. And some have made 5 and 6 figure profits doing just that.
How is Zeek the same as an MLM, and not clearly an investment ponzi?
Nope, you misread what I wrote. I am not talking about the MLM business model. I am talking about the fact that Zeek Rewards payouts to top 100 distributors is such a large proportion of revenue that there is no way it is sustainable without the investment ponzi.
It is not sustainable with the wholesale club (less than a fraction of a % of revenue), not sustainable with membership fees (they pay out more in a single day than they take in the entire month in membership fees), and not sustainable with penny auction revenue (you can reverse engineer the likely auction revenue from expired auctions).
The only way Zeek stays afloat is by bringing in more investors, at an ever increasing rate, to keep up with the compounding interest from previous investors.
That is all I am saying. @BD – you are putting up a straw man argument that I am saying MLM does not work.
Also, I am well versed in MLM history and have an economics degrees and have studied it quite closely, so please read what I write here and don’t label me as some newbie. The MLM industry started in the 1940’s, closer to 70yrs ago not “50”.
Look up a company called California Vitamins. Bonus points if you can tell me what company name California Vitamins is operating under now.
@BD
The day you show me how my MonaVie juice sitting in my garage gains compound interest, I will stop calling Zeek a ponzi.
@BD
Says who, you?
Mathematically it just doesn’t add up. Traffic wise there’s no way known Zeekler is bankrolling Zeek Rewards. Furthermore just visit the site and look at the auctions yourself… it just doesn’t add up.
And one last thing to consider, why wouldn’t Burk release the percentage amount membership fees and investments make up out of the total profit pool? Percentages are prioprietary secrets – so there goes that claim.
All your left with is a company that won’t specify how little or large member’s fees and investments are in its total revenue stream because that gives the game away.
Paul Burks and Dawn Oliveiri (or whatever her name is) have repeatedly stated that they will never divulge the ratio profit share made up by member investments/membership fees. You can hypothesise all you want about percentages but until they do you’re just making stuff up.
You could say the same about myself, but the numbers don’t back it. Zeekler is tiny in comparison to ZR and one look at the site should dispel any notion that it is is a cashcow. Furthermore the profit statement figures released in some way reveal the magnitude of money invested in ZR – by far the largest source of income for the company.
As per the FTC – what is the intent of the member purchase here? (and I’m going to club the silly juice MLM analogy that keeps getting dragged up too).
In product based MLM companies if members purchase stock, with legit MLMs the intent has to be to get customers to purchase stock. If not, then they don’t get paid! As a member of a legit MLM company, you cannot purchase goods and earn more money then the cost of the goods. It is impossible because you’re not selling anything.
Regarding Zeek, with the amount of bids you purchase directly tied into how much of a return Zeek pays you the intent of members when “purchasing” VIP bids is solely to earn a return from Zeek – it is the purchase itself that generates the commission – rather than the sale of anything.
Whether or not the customer does anything with the bids is irrelevant to the ZR member giving the bids away as it is not tied into their commission paid out from the company.
So please stop wasting my time and comparing ZR to juice or other product based MLMs. They are fundamentally different.
And why is it an investment rather than a product purchase? Well for starters there’s the obvious fact that ZR actually started guaranteeing its members a 125% return. The only reason this changed was because a lawyer looked at the business and advised them that they couldn’t claim not to be an investment scheme and at the same time guarantee returns.
Following this advice, all they did was remove the terminology and mix up the percentages a bit – fundamentally the business operates in the same manner.
Product purchases do not generate ROIs – investments do.
When you purchase a product you take a loss in the money you paid for it – that’s how the seller earns a profit. With Zeek they pay out more than the cost of the product – how on Earth is that a product purchase? They give you virtual items, rendering your transaction with them entirely an investment.
I’ll grab the bonus points, since BD doesn’t do it.
“Nutrilite Products, Inc.”, Carl F. Rehnborg, 1945 (1949).
The company California Vitamins started in 1934, and MLM-model was partly introduced in 1939, without decentralized recruitment. The first true MLM was started in 1945 (alt.: 1949).
The alternative years are related to the use of different sources. Some of them consider 1945 to be the first year, while other sources use 1949 as the first year.
Nutrilite is a part of AmWay, since 1972/73 (partially ownership) and 1994 (full ownership).
“You have just won 500 free bids in Zeekler.” 🙂
On the Monday Mar 5 call, Dawn at ZR said that despite Kevin Grimes general explanation that the Income Disclosure Statement allows distributors to have public meetings, Zeek’s policy still absolutely prohibits any public meetings. It is in the first 2 minutes of the call.
Have you ever heard of a network marketing company that wants to prohibit meetings? What are they afraid of? The entire ZeekSquad gestapo and compliance requirements are forcing Zeek distributors to sell Zeek based on a very narrow edge of legality, and many on here argue that the use of virtual points doesn’t mean it’s not an investment no matter how much legal language they wrap about and how often they prohibit the use of “investment” and “compound interest”.
If they have public meeting, they are subject to “disclosure” rules. If it’s private, they can claim confidentiality.
Furthermore, no meeting and limited internet posting means full information control, which is one of the ways a cult controls its members. See Steven Hassan’s BITE model for details.
That Mar 5 call is really go off the deep end. The speaker is talking about suicide and intervention and how to be empathetic to sell a network marketing program. These speakers and even the MLM attorneys that have been on the calls don’t understand the Zeek business at all.
This speaker keeps talking about personal development and motivational stories because 95% or more of network marketing people fail at recruiting all of their friends and family into the business. So network marketing “gurus” and “leadres” and “coaches” to this difficult uphill climb – which is why you see so much on personal development and visualization.
BUT… what none of these guest speakers who come on Zeek’s calls realize is that the Zeek program, as currently advertised, is that everyone profits and everyone makes multiples of their investment for doing next to thing. Zeek isn’t selling an MLM where you have the 95% failure rate, yet that’s all they talk about on their meetings.
One day when the 95% of Zeek distributors who actually LOSE money will be the day this site gets flooded. Will it be 3 months? 6 months? A year from now?
These speakers are purely “motivational”, i.e. a “life coach”. Why would a MLM need a life coach to “motivate” its members? Hmmm? Clearly the products and comp plan are, well, not very motivating.
(Side note: guess what other scam used a life coach? TVI Express, who used Clarissa Calignasan, a “Bob Proctor certified” life coach)
Thanks for bringing back memories of my circle writing days in Amway. And I always liked the Nutrilite products. I realize I have forgotten so much from my youth.
I kinda miss those diamond conventions….they really pumped me up.
Your Zeekler bid comment was funny too!
Zeek Rewards pulled the Zeekler auctions offline 2pm EST and are now claiming they’ll be down till 8am EST.
That’s 18 hours of downtime (spread out over 2 days). Those that are part of ZR would do well to keep an eye on any change in the profit share for today and yesterday.
If the penny auctions are down there’s no revenue…
Meanwhile ZR are now citing ‘intermittancy issues with our upstream bandwidth provider’ as the cause for the downtime.
Zeek Rewards and Zeekler are hosted through PSINet. Zeek Rewards receives far more traffic than Zeekler, yet Zeekler is the only one of the two websites affected?
If there was upstream issues it’d affect both domains…and be more noticable on ZR because of the increased traffic.
I smell bullshit.
@Oz
There have been downtime every day for the last 2 days as well.
MANY bidders were not able to bid. See the complaints I found here: http://www.zeekanswers.com/why-isnt-the-zeekler-penny-auction-working/ (if you click on the Popular link you’ll see this topic has more comments than any other). So is the issue really an internet service provider issue or the auction itself?
Yet the profit share has been slow and steady: http://www.zeekanswers.com/28day-retail-profit-pool-history/
So the question is, if the PA is down for the day, what will the profit share be?
Regardless of what you say. It is not an investment, but as long as it brings money to people they are not going to take off.
All I can tell you is this, I joined the company 2 months ago and only 4 people came with me. Right now my structure consists of 150 people (70% affiliates) whom I don’t even know and there is an influx of at least 5 people a day on average.
Some people might take off after reading some of the negative comments in this and similar forums that are based solely on personal predictions. If I trusted every negative prediction, I would be miserable.
I am not saying that Zeek is going to last forever. Are you going to last forever? Even if it is a ponzi scheme, some schemes can be functional for decades.
Sorry what?
Money goes in and people earn a variable return greater than the money they put in. Of course it’s an investment.
No amount of pointless tasks ZR assign you to do or “nobody mention
the warinvestments” compliance courses are going to change that.Ponzi schemes don’t go bust by chance, they go bust by design. There’s no element of prediction about it.
When people stop investing, there’s nothing to pay out. Simple.
How about education? Would you consider it an investment too?
How many people today go bankrupt because of going to school without having a job after they graduated. Tons, hopefully you’re aware of the “Occupy Movement” that is going around. Then maybe you should think of the government to have a bad design of not having enough jobs out there for its citizens. My point is that anything might be considered a ponzi scheme if you consider ponzi scheme to have a bad design.
With respect to people stopping investing, at least with my account I do not see it happening and I don’t see the profit pool percent getting any lower.
Oh dear.
Really? You’re going to try and compare Zeek Rewards to education?
Well, you show me a school that lets me sign up, post an ad about it on a classified site and earn more than the cost of my education fees in 90 days and we can go further.
Otherwise your comparison is a waste of time.
Yeah, you are the people that firstly allow ponzi schemes to profilerate and secondly are secondly are usually the loudest when they crash.
If you can’t understand that ZR cannot continue to keep paying out investment returns on ever-growing investment accounts with them, then you might want to go back to school and “re-invest” in your education.
Start with basic mathematics.
And your proof it’s NOT an investment is what, exactly? ZR orders from above?
if you trusted every positive prediction you’d be poor as you threw your money after everything.
The key is moderation and logical analysis.
And the point is? Since Madoff is in prison? Are you basically saying you *can* profit from Ponzi schemes by soaking in late joiners, but as long as you get out in time you can profit and **** everybody else?
@liquid
And have you thought about the guy that joined 6 months ago and has 10x your balance? Or the ones who joined 12 months ago and have 20x your balance? How much money will be left in the company as these huge account balances start withdrawing?
What happens in another 6 months when ZR can’t find enough new people at $1k to $10k each to sustain the huge 6 figure balances?
It’s pretty basic math that it will collapse. Maybe YOU made money, but imagine the thousands that come after you that will lose theirs. Why don’t you join Ricochet Riches today? I can show you hundreds of people who have made significant returns on that over the past 12 months.
I didn’t compare Zeek to education. I gave you an example when a bad design does not necesserily mean that it is a ponzi scheme. Unlike what you said
And it seems like it is going nowhere. You have your points and I have my facts. We live now, not 1 year from now. How they are going to pay more is by having more people.
I told you, I have a steady influx of 5 people a day without even knowing them. And the average number of people coming everyday under me is just increasing.
You can give suggestions of what I have to take all day long, just don’t sweat.
@liquid
Oh, please, can’t you come up with anything better than the logical fallacy?
1. Zeek is a ponzi because it’s business model has a bad design.
2. Public education has a bad design
3. Therefore public education is a ponzi?
Really? Surely you can do better than that. We might as well all stop typing if you’re going to be completely illogical.
If I didn’t know any better I would’ve thought that quote came from Bernie Madoff.
“You are running a ponzi”
“NO, I am not!”
“How are you going to pay these investors the promised returns, there is no real revenue?”
“How I am going to pay more is by having more people.”
@liquid
Yeah you did, it’s right there in your opening paragraph.
And as for bad design, education isn’t a business opportunity for the student – so again, your comparison is a waste of time.
And those facts are?
And what happens when the people run out son and everyone realises that nowhere near enough real money has been ivested to pay everybody out?
Ah the fallacies of ponzi schemes…
Then you raised a completely irrelevant subject and thus a derail.
Too bad your facts are either irrelevant or unsupported.
You said ZeekRewards is not investment, but you gave no supporting evidence.
You said education is investment, which is completely irrelevant to what ZeekRewards is.
How you try to figure out how this company pays out so much money and waste your time trying to figure it out you could be wasting your time some where else! I have been with ZR for almost 8 months and have watched it from the inside not the out side like most of you idiots!
I know where the money comes from and I know for a fact that the make more than enough to make it happen. I’m making a mid five figure income monthly and everyone of my checks have cashed and I have thousands of people in my downline also making five figure incomes!
I have been in this Industry for many years and I have never seen a company works as hard as Zeek to make sure they are compliant. I’m here for the duration, whether it is my duration or Zeeks duration! I love this company and will defend it with all my heart!
All you name Sayers I think you are a bunch of losers and have probably failed at every thing you have every tried! Go get a life!
@Richard
So if I lose my $10k and those I bring in lose their $10k because Zeek stops paying out, will you reimburse us?
If you bought gold options on futures 8 months ago you’d earn a pretty peny too. So what if you made money the past 8 months?
My facts are pretty much supported. I told you what growth I have in my account in the last 2 months.
Regarding numbers, there is a lot people on planet earth unless you don’t know and maybe not all of them can afford $10 a month, even if you take a fraction of world’s population it is going take awhile to fill it up.
Just to mention something aside from Zeek. There is a ponzi scheme that was designed by a Russian guy that attracted over 20 million in less than a year and 5 million within the last month. The difference there is that they tell you that it is a ponzi scheme and they tell you that as long as people invest it is going to work.
However, people keep investing because the returns are great despite the fact that everybody knows that it might fail and they would lose it all.
In US because of legal constraints it makes it impossible. My point is that if you decide to join a company like that you take your risks of maybe losing it all.
@Richard
And what has this advantageous position enlightened you with? You know as much as everyone who’s not in the company does.
The only difference is when it comes to analysis, you’ve got your blinkers on due to your financial investment in the company.
That’s what happens in Ponzi schemes. As someone who got in early, your success is used to attract new investors and keep it going.
Also we’ve all seen the profit statement. Let’s not confuse income with VIP bids. If anything you’ve earnt a virtual income you don’t dare cash out.
Big difference between that and what you’ve actually cashed out.
…and those facts prove what exactly? Nobody is doubting that if new people continue to join and invest in Zeek Rewards that the ponzi won’t continue.
How long it takes is irrelevant, the point is that intrinsically, ponzi schemes are unsustainable as a business model. There’s nothing being sold, you’re just using new money to pay off existing members.
You yourself have admitted that when you tied in Zeek Rewards sustainability to the continious addition of new members.
There’s a reason for that. A Ponzi failing is not a possibility, it’s inevitable.
@Oz
Most people who have been in at least 6 months are at 50k VIP points balance or higher. The conventional wisdom is to switch to 80% daily reinvestment and cash out 20% daily profit per day. At 50k points the montly cash out at 20% is about $4500/month while maintaining small growth in the account balance.
Someone in 8 months could easily have over 100k points, especially with a large downline. With enough commissions, you could switch to 30% or 40% cashout and still maintain the account balance.
In other words, actual cash out of 5 figures per month is realistic, but there are probably only 100 to 200 people at that level based on extrpolation from Income Disclosure Statement and knowledge of leaders, where corporate has facilitated some conversations amongst “leaders”, I.e. those with account balance above a certain amount.
ZR has just enough of these 5 figure “cheerleaders” to keep the ponzi going, if not for those pesky lawyers getting in the way.
Fair enough on that point then.
However someone has to be getting paid to attract new members. And that alone doesn’t negate what Zeek Rewards is or that mathematically it’s still unsustainable.
Richard’s assertions that he and his team are making money so the scheme will never fail still fall flat.
I have compared ZR to social security with the mass of ‘baby boomers’ soon to start withrdrawing. While there may be 100 to 200 Richards today making 5 figures a month, what happens in 2-3 months when there are 1000 to 2000 Richard’s with 50k point balances and above?
So to your point, the sustainability problem rears its ugly head prett soon.
Zeek will have other growth problems, such as not being able to process credit cards to buy bids (only the early adopters will use bank wires). , Auctions are becoming impossible to win with massive bid dilution.
When I go to another real penny auction, I know the guy bidding against me doesn’t have thousands of bids he doesn’t care about its true value, since he got them “for free”. Meanwhile, as a retail customer I paid for my bids.
The withdrawal process will soon start to strain staff, even with the new nxpay ewallet. When withdrawals start taking more than 2-3 weeks (the current delay, even with ewallet), people will start to freak out.
Ever since I can remember the withdrawals have always taken 2 weeks, just as they do now.
Plus the time it takes for the money to make it into your bank account, so 2-3 weeks.
However, wouldn’t you say that is the maximum tolerable limit? In other words, if it took 4 weeks or 5 weeks to withdraw money, would people stick around?
So ZR’s wonderful withdrawal policy STARTS at the maximum tolerable limit? Whereas every other illegal HYIP pays within 3 days to be credible, many the same day or within 24-hours.
Now back to my point. If it will take ZR 5x or 0x the number of NEW people to join in order to pay off the “baby boomers” who will start joining the 50k balance club and above… how reliable is that ZR back office automation going to be?
In other words, if the number of withdrawals starts (even if at 20% daily rate) starts increasing 2x, 5x, 10x… do you think ZR corporate staff will keep up with all the withdrawals? They are barely able to maintain the maximum tolerable delay as it is.
Think about this – when the “drag period” start becoming longer than it is now, do you think people won’t start being more aggressive with their withdrawals? Every other HYIP sees a direct correlation between drag time and withdrawal acceleration.
Jimmy,
Your missing the point. Ever since I can remember the withdrawals have always taken 2 weeks, just as they do now.
The point is the withdrawals have always taken 2 weeks, just as they do now. Nothing has changed, from the way it’s always been with the withdrawals.
Maximum tolerable limit? For who? You? When something has always been the way it is and has not changed, I guess all you can do is talk about the what IF’s. Again, Nothing has changed, from the way it’s always been with the withdrawals. They have always been the same way they are now. It’s what is expected.
Your talking about IF’s , and those have not come yet, nor do you know IF or WHEN they will come. Your looking into the future Damn, I wish I could do that.
Why do the withdrawals take 2 weeks?
Safety net to protect against mass withdrawals?
It’s a security measure. If someone hacked into your account and withdrew a bunch of money , you would have time to notice it and contact the company.
This has been brought up and answered on company conference calls. Again, this is always been this way. Nothing has changed.
So when you put in a withdrawal request, Zeek expect you to believe they sit around doing nothing for 2 weeks on the offchance you’ll contact them about fraud before electronically putting through your request in the blink of an eye?
Please.
Withdrawals take AT LEAST 2 weeks, which is why I have said 2-3 weeks. You have to request them by Friday, and they not scheduled to go out until the next 2 Mondays. So if you put in request TODAY Mar 12, your withdrawal request would not get processed until 3/16, and your payment would not be issued until 4/2 (21 days from request to check issuance). If you requested a withdrawal on Saturday, you’d wait 23 days.
Yes, I am talking about IF’s. What IF the incoming flow of new affiliates slows down such that it cannot feed the ponzi investment scheme? What IF Zeek stops paying or lowers the daily profit share below 1%, which would then lead to a max exodus of withdrawals, which would then lead to the profit share dropping even lower than 1%. What IF the hundreds or thousands of people you bring on lose their money, even if YOU didn’t?
And.. what IF payments take longer than 2-3 weeks? Yet another leading indicator of collapse. It’s a standard pattern for HYIP’s. The money starts drying up and you have to slow the output. How do you do that? Pay less, pay slower. Pretty simple stuff here.
Sure, I’m talking about IF’s. What do you expect? This site analyzes business models and leading indicators of collapse. Did this site not nail RicochetRiches and AdSurfDaily? I don’t see any of the people who made a ton of money in these coming on here and defending it.
In fact, the top leader who does not work for corporate made a lot of money in AdSurfDaily as well, but he’s considered an MLM “leader” in ZR rather than just another ponzi recruiter in ASD. Funny how your perspective changes until the thing collapses.
Then answer the question: WHY have ZeekRewards at all, if Zeekler is making so much money that they FEEL they need to make up a new program just to give money away to all you ZR members? What do THEY get out of it besides your monthly dues?
Just because “it’s always been” doesn’t make it right. You just committed a logical fallacy.
There’s a far better explanation than the official one: it’s a cashflow management measure.
If you allow immediate withdrawal, you can’t predict your cashflow. If you make it “net 14” (i.e. 2 week delay) then you can better gauge your cashflow situation, and have 2 weeks to react to it.
If a lot of people are asking for withdrawals, you can lower the profit margin for the next 14 days to cover the withdrawals (up to a certain point, of course).
@ Chang @ Jimmy @ Oz (the predictors)!!!
The company clearly states that the profits are not guaranteed. Whoever decides to enroll, takes the risk of failing. This explains perfectly that it is not an investment with guaranteed returns.
If you guys think that spending $10 a month for a possibility of making profit is not an attractive enterprise, then keep spending that money lottery tickets where you might have a better chance of winning.
Most people spends alot more than $10 a month in Zeek Rewards, if we consider the initial investments to be some sort of “spending”.
You may actually have better chances spending $1000 on lottery tickets than joining a Ponzi scheme in its last days or weeks.
@liquid
I know a lot of people that have invested $5000 to $10,000, plus $99 per month for subscription, plus $15 per month for marketing videos. Plus their reputation when bringing on board new people who also invest up to $10,000 and may lose it.
Saying that ZR has a disclaimer is like saying you knew investing with Bernie Madoff had risk, therefore Madoff has no blame for losing investor money.
How about the fraudulent way that ZR portrays the auction as the primary revenue generator? Listen to any opportunity call, they spend 75% of the time talking about how great penny auctions are and how everyone loves to save 90% off retail.
The penny auction is the worst part of the entire ZR program. It couldn’t compete against a legitimate penny auction ever. This can be proven quite conclusively if you compare:
– bids in circulation (free, retail, and VIP)
– disparity in bid cost for different user types (retail vs. affiliate)
– bid inflation as a result of BOGO and VIP point allocation
– ratio of number of auctions per day vs. auction users, or ratio of number of auctions per day vs. bids in circulation
– average winning price of auction
– ability to scoop an item
– shill bidding
– auction downtime
Remove Zeekler from ZR and it goes out of business even quicker than other legitimate penny auctions have failed.
How many repeat customers do they have? Where someone purchased bids and then went back to purchase more bids? Stacked friends-of-an-affiliate-buying-for-VIP_points do not count, of course.
Last days? Says who? You? Keep dreaming buddy!!! Today 10 people joined under me and I am a newbie (2months).
Stop it! Everybody makes a choice for themselves. You don’t spend $10,000 without taking the risk that it may bring you more or it may fail. So don’t talk about respect here, please!!!
You’re the one who said “I know for a fact they make more than enough”. So now you come back with a disclaimer? Do you no longer know for a fact?
@ Chang
What I said is that my account shows growth at this point, but at the same time I said that it does not necessarily mean that it will last forever, please reread what I typed. And another point is that I enrolled knowing that it is risky. Took my chances.
So you admit that you really meant was “I made money from it”, and from there you INFERRED that “they must be making money to pay me” (which is unsupported opinion, BTW).
None of which gets into whether ZR is legal or not.
If I invest $10k in gold and the price drops, I still have some gold. If I buy $10k worth of juice or vitamins from my favorite MLM, I have $10k with of retail product I can consume or sell.
If I buy $10k worth of VIP bids and give them away as samples, I have what?
A highly disclaimed pseudo-expectation-but-not-a-guarantee of profit from a ponzi investment scheme.
We’re pointing out that the risk may be far higher than presented, and the business model may in fact be illegal. Were YOU aware of these risks when you joined?
@ Jimmy
People make choices for themselves I repeat. Personally, I don’t like juice regardless of what it is made of, because I am allergic to juices and they increase the risk of cavities.
Regarding gold, good suggestion, but you do not necessarily have to keep all your eggs in one basket.
@ Chang
Higher or lower risks is an abstract. Legality is when the company does not follow laws, but the company makes everything it can to follow those laws and by hiring top lawyers just confirms that.
What exactly is that supposed to mean? That all risks are illusory?
They are following laws that may get them into trouble in being classified as a investment by dissuading members from referring to it as an investment. However, all these compliance does NOT address the issues that it may be a Ponzi scheme where the ZR member’s Monthly fees are what’s feeding all those daily “profit shares”.
Hey gang!
Aside from Zeek, I would like your thoughts on a new project that is coming out. It is a social network company something like facebook, but has a lot more functions (groupons, skype, shopping daisy, craigslist all in one).
Unlike, facebook, the company shares its profits with its members. They offer 3 options of joining them either free as a client (low payout upon inviting other people) or partner (around $60/month greater payout).
There are some other options of payment too, I am not going to go into detail. Just want on your thoughts whether you even heard of such projects.
Sure they do, but just because a person “makes a choice” doesn’t mean the other party is completely absolved from being moral and abiding by the law of the country they are in.
When you buy food, you “made a choice”. If the food provider poisons it, they are breaking the law. When you use your credit card at a retail store, you “made a choice to use your credit card”, but that doesn’t meant the store owner can now steal your credit card information and spend all your money.
Similarly, when a business presents information that is fraudulent or deceptive, or if the business itself is illegal, then the person who is being separated form their money is being taken advantage of.
That’s why sites like this are a godsend to the average “investor” of online make money fast scams. How would you like it if you bought into Ricochet Riches some time in the last 3 months without the benefit of this site?
The list of examples go on and on.
To be very specific, in the US, it is illegal to run a ponzi scheme. It is illegal to run an unregistered investment. It is illegal to run an investment ponzi scheme (even if registered). Just because you “made a choice” to invest money in ZR doesn’t change the fact that it is an illegal ponzi investment scheme.
ZR corporate is telling all new investors it is not a ponzi nor an investment scheme, yet they provide no data to back it up, and the data that could prove it (the ratio of revenues of auctions and affiliate investment) is a closely guarded proprietary secret – never mind that other MLM’s all publish their retail vs. distributor ratios regularly.
It means that if the company tells you from start that profits are not guaranteed, you make your decision based on that.
They did not say that they will provide you with a 5% profit a month. Therefore, you must assume that the risk is high before you join.
@liquid
Back when Zeek first started they guaranteed 125% returns on investments.
Lawyers were called in and this then changed to the artificially variable rate it is today. Tell me, seeing as the business model didn’t change how were Zeek initially offering guaranteed returns?
@liquid
I’ve already looked at Zurkler and as it stands there’s no MLM component. It’s a single level investment scheme so I’ve passed on a review.
No need to by cryptic.
@ oz
I joined them (2months, close to 3) when nothing was mentioned about 125% guaranteed profits. Therefore, I don’t know anything about this.
All I know is that whoever joins today, takes one’s risk and it is ok with me. I took my risk when I joined.
As has been mentoned previously, risk has nothing to do with analysis of the business model.
‘lulz, well everyone has to accept risk right?’ didn’t work for Bernie Madoff and it’s not going to work for Zeek either.
One little disclaimer doesn’t absolve the company of all responsibility. All risks must be clearly noted (as best as the company understands them). Anything less would be grounds for fraud and misrepresentation.
Yet you didn’t know about them being POSSIBLY non-compliant with the law and is spending $$$ hiring top lawyers to fix that, did you? Would you STILL have joined if you knew they may not be fully compliant with the law? (Be honest now)
Why are you so sure they do not poison you? The fact that you do not die from it right away, should not take the responsibility away from producers. Check out the rates of colon and stomach cancer in the U.S.
Back on topic please.
It’s not illegal to sell food products that harm you in the long-term, see tabacco products.
Meanwhile running a ponzi scheme is illegal.
@ Chang
Possibly and actually has a huge difference ok. I hope you know that in the U.S you are innocent unless proven guilty not the other way around. So you must have prove, not theories.
When a person kills somebody evidence must be presented, not say s/he is guilty because of our subjective analysis of the model.
Please read my previous comment addressed to Chang
@liquid
Wrong definition of legality, sorry. If you commit fraud or run an illegal business, you are breaking the law. You don’t have to wait for someone to be convicted of a crime or lose a civil lawsuit to claim or know they are breaking the law.
If you drive 100mph on the road, you are breaking the law. I see you driving fast and I advise my kids not to be a passenger in your car. Getting convicted of a crime is ireelevant to the fact that 1) you are breaking the law, and 2) you are undertaking a high risk activity.
ZR is the same. We can observe ZR has an illegal business model. We can reasonable conclude from analysos it is a high risk activity, and certainly much higher risk than the “sure thing” investment as being portrayed by all affiliates and corporate.
A disclaimer doesn’t change the fact that ZR is being pushed as an investment with no/minimal risk that everyone can earn. Everyone does earn, until the money runs out.
@liquid
The evidence is the business model.
Prior to lawyers being called in Zeek Rewards guaranteed a 125% return. How could they do this if the profit was based on penny auctions (a variable revenue source)?
After the lawyers were called in, all that changed was they transformed the fixed guaranteed 125% return into an artificially generated variable rate – the business model itself did not change.
Furthermore, Zeek Rewards refuse to divulge the percentage of profit share that member’s investments make up. There is no competitive advantage or proprietary secret unveiled in revealing this percentage, the only thing it potentially reveals is incriminating evidence.
That evidence enough for you?
The company does not say that it is an investment with no/minimal risk. In fact the company says, no guaranteed profits.
What is your evidence to say that? Theories are just assumptions.
Yeah I have to admit that 125% guaranteed profits was not a good move. However, the fact that they are trying to change the situation suggests that they want to be compliant.
But they didn’t actually change the business model, they just artificially made it a variable return.
ZR insisted that the revenue share was coming from penny auctions when they had a guaranteed return and continue to insist the same penny auctions are bankrolling the profit share after they made it a variable return.
If you don’t have your blinkers on because you’ve invested into the scheme and want to believe, it’s easy to see that this doesn’t add up.
They didn’t actually change the model so how did it go from being a guaranteed 125% to a variable return? What exactly changed other than the ROI rate?
Nothing, it was a ponzi and still is.
That’s not what I was asking. I was asking would you have committed to ZeekRewards had you known they may POSSIBLY (yes, I capitalized that above also) be breaking the law and make wholesale changes to advertising verbiage, which basically means all the reps (even possibly the people who recruit you) are doing it all wrong?
Not to mention that prior to 2 months ago, it was a lot easier to recruit. Look at what you could do more than 2-months ago:
– Share spreadsheets with hypothetical gains
– Use the words “investment,” “compound interest,” “no recruiting,” and “no sponsoring”.
– Create your own website to promote ZR, now you need everything blessed by corporate
– Give away bids automatically by paying $1 for every $1000 you earn to buy a company assigned customer, i.e. “no recruiting”
– Use a credit card to buy VIP bids (now you have to use third party processor, and the only straightforward way to get over $5k in without submitting 10+ separate transactions via SolidTrustPay is a bankwire; a new third party processor was added but not functioning yet – they will allow deposits direct from bank accounts)
– Make hypothetical projections, including cutting & pasting ZR corporate scenario of building up to a 50k balance and then switching from 100% repurchase to 80% repurchase, and cashing out a healthy monthly income with steady growing point balance (you cannot do this now, not even cut & paste corporate’s own scenario posted on your back office when you go to change your repurchase amount)
Now you cannot do any of the above. So just how much growth is Zeek expected to have? When affiliates have to actually recruit customers, the whole passive investment thing is no more.
Also we should mention while on the topic of warning indicators that all of the free customers assigned by ZR have the username: firstname + 2 or 3 digit. How many people actually create user names like “Charles026”? And if you have dozens of Zeek company assigned user names that all look like that, don’t you think these might be FAKE people? (this was mentioned in a comment on another blog entry)
Other warning indicators:
– Cannot invest more than $10k per person. What real business opportunity or investment limits investment amount artificially? In this case, to control cash flow and prevent someone from buying up say $1M and then withdrawing it. Distribute that across hundreds of affiliates and the probability that they all withdraw at once is much less.
– Hold any public meetings about Zeek. It is strictly forbidden. Move along, noting to hide here…
The abolishment of the 5cc revenue must be hurting, Zeek have just announced they’re selling mobile business cards (affiliate deal through mobicardbackoffice.com).
Can’t you set up your own mobile business card for free and just send it out? I remember seeing this sort of stuff on my mobile phones in the 1990s…
Anyway, Zeek’s pricing is $29.95 for 300 cards or $69.95 for 1000 cards. There’s also a $4 a month charge which I’m guessing is an admin fee.
The pricing is actually pretty good as far as mcards go. But do you really need an mcard to promote Zeek?
I mean, why do you want to timmy-two-step where you make contact with someone, give them an mcard, require them to click through to view your website, then have them contact you. Just seems so unnecessary. It’s better just to skip the whole mcard thing altogether.
The site is currently offline for
scheduled repairs.
Please check back in a little while.
ZR and Zeekler have been up and down every day for over a week. Clearly a crack IT staff thatcan handle loads up to 3 million users as advertised.
The company being able to sustain itself to me lies in the monthly memberships $10.00; $50.00 & $100.00 p/mth. Bare minimum lets go with 500,000 members at $10.00 p/mth i.e. 5 million dollars p/mth on the bottom end i.e. 60 million p/year.
How about the $50.00 p/mth membership ‘==> 300 million per year, and $100.00 p/mth ==> 600 million per year. This is on memberships alone, which you will need to subscribe to anyway, in order to get paid.
Zeek has this thing figured out guys & gals! Hang in there! They just need to keep it legal.
Here is income disclosure statement (IDS) for Zeek ==>
http://zeekrewardsnews.com/2012/03/zeeks-income-disclosure-statement-is-here/
If the “profit share” is generated mainly from the memberships then they are in danger of being classified a Ponzi scheme.
That makes most MLM companies illegal, so why are they still in business? Reality check my freind, all big biz is a ponzi scheme. The company you work for is a scheme, unfortunately that’s the world we have to survive in today.
Go to financialdestination.com – this company has made tons of individuals successful for the past decade through money from memberships. Why hasn’t the FTC put them under?
Interesting IDS
15318 active members total in the US, comprised of 34.27% of members. So total ZeekRewards members in the US, if I read the chart correctly, is less than 45000 people.
There’s also the admission that 64% of ZeekRewards members worldwide earned NO INCOME AT ALL (i.e. they paid the monthly fee and got nothing out of it).
Because MLM companies is supposed to only pay on SELLING things (whether directly by you or by your downlines). Thank you for demonstrating your lack of MLM knowledge.
Logical fallacy: strawman argument. “Everything else is a ponzi scheme” is simply not true.
Two fails. Care to go for strike three?
@dl
Where are you pulling that number from?
If we use your hypoethesis, the majority of commissions are still being paid out of member’s own money and paying out commissions mainly from membership fees is illegal. It needs to be from product sales and membership isn’t a product.
This is a common argument from those who join recruitment scams. Most businesses don’t require you to pay membership fees to earn money and pay out the bulk of commissions for you signing up new members.
They revolve around products and services, which is legal.
I had a quick look at FDI, seems to be a recruitment compensation plan tied into some card that provides access to third party healthcare services (only spent 1-2 mins looking at it?)
In that case yes, it’s dodgy. Perhaps it never got big enough to register on the FTCs radar, a lot of companies fly under the radar due to their own organic decline due to the sustainabilities with recruitment based models.
Zeek does have a divsion that sells products of which you have to sign up for, are you aware of that?
You’re right many companies dodge the bullet, so you have to determine which you are comfortable with. Unless you are the whistle blower you never know.
Means nothing if nobody is using it.
When was the last time you saw a Zeek Rewards member advertise their FSC store?
We had a few ZR members mention the stores months ago but like everybody else in Zeek Rewards they eventually admitted they made no money in it and all their commissions were from the profit-share.
You don’t need regulatory action to determine whether or not a program is sustainable or not (or a recruitment scam/ponzi scheme/pyramid scheme etc.), all you need is the business model and some analysis of where the commissions are coming from.
Zeek has far more revenue from member investment than monthly fees. Unlike other MLM’s where you need to recruit to earn, with Zeek you invest and earn profit share.
The monthly fee is a way Zeek pulls in more revenue from members but is a small fraction of revenue. No one would pay $99 monthly fee unless they were earning thousands off that per month. No one would pay $10 monthly fee unless they were earning hundreds per month.
The earnings are “virtual” until you cash out, of course.
Like with every other investment ponzi, you can make money and there is evidence everywhere of people making money. But it is still illegal and it will collapse and the people in last will be left holding the bag.
Will that be in 3 months, or 6, or 12 is the magic question. Look at RicochetRiches they lasted 12 months. Look at JSS Tripler they are still prodding along despite some recent problems.
In addition I don’t have to recruit anyone to earn income. How about the banks – don’t they take everyone’s money pool it, invest it then give you pennies on the dollar, then nickel & dime you to death with fees!
Yes free membership, free checking but legalized ponzi scheme! Come on guys cut the negative stuff out, if Zeek is not for you so be it, what if Zeek lasts another 10, 15, 20 years – what will you have to say then?
Just for fun, compare ZeekReward’s IDS against another IDS
http://www.yourtravelbiz.com/Policies_Procedures/IDS-US-Rep-Marketing-12pt-copy-v5.pdf
Keep in mind that YTB was sued out of two states and were charged as pyramid schemes and pay big $$$ to settle out of court.
@dlllc
Great, that means it’s not a pyramid scheme. That’s because it isn’t, it’s a ponzi scheme.
Banks aren’t MLM companies.
Mathematically with ever-increasing vip point balances this is impossible. No point discussing hypothetical impossibles.
Back to my point they are all structured like ponzi schemes, its just that all are not legal. No MLM program will last forever, Zeek is no different.
Guys, it was a pleasure having some fun with individuals that analyze. While you guys do so I will watch my income increase from Zeek!
Regular business isn’t structured like a ponzi and neither are banks. Banks provide actual services other than a ROI.
Why wouldn’t a product-based MLM company that had strong sales collapse? If the product sales dropped off sure, but it certainly wouldn’t have anything to do with new and existing members not investing new money into the system.
See the difference?
And ultimately this is where we’re at.
‘I know it’s a ponzi scheme but I don’t care. I’m making money LOLZ!‘
These are the same idiots that scream the loudest when their ponzi goes pop. Have fun watching your
incomevirtual point balance.You miss a crucial point in this analysis. Other MLM’s can have a plateau in membership (same number of members quit as new ones who join each month) and still thrive. The company can make money, and the distributors can still make money.
If Zeek’s membership growth plateaus, or even slows down, the whole money scheme falls apart completely because there is not enough new money to pay off all the prior investors.
So Zeek is MUCH DIFFERENT than the product MLM’s you are comparing it to. Zeek is more like the adsurf investment schemes, just replace bids for advertising and disguise the investment behind virtual points.
Except nobody ever advertises stuff from Zeek Store, and there’s NOTHING in ZeekRewards that requires you to sell from the ZeekStore, thus they are NOT compliant with the 70% Amway rule.
Did you not read the latest changes? You MUST have two recruited under you to earn ANYTHING. Else you’re considered inactive.
And stop that “everything else is a Ponzi” derail. It doesn’t help your “cause”.
What makes you think you’ll be among the 36% who earned ANYTHING from ZeekRewards?
To be fair – people are getting paid. The question is if you are NEW whether you will start cashing out your point balance before it collapses. People who have been in 5 or more months very likely have started cashing out already using 80% reinvestment.
You do not have to recruit 2 people because you can still sign up free customers to giveaway points. All you need is an email address, including free emails, and no confirmation required. There is a limit of 3 customers per iP address.
What is funny is at my local wifi hotspot (a pandera bakery) the limit is already reached and so you cannot sign up from there. If Zeekler verified their customer signups they wouldn’t need the IP address blocking.
As for signing up 2 paying people to receive unlimited free customers, most affiliates are signing up fake people to qualify.
So in effect, they are paying 3x the amount into the system than normally would, in hopes of growing their VIP points so they can start making withdrawals (but in effect, that money is feeding into the folks who already have bazillion points).
Most people who give bad reviews of companies are the ones that fail all the time because of there negative attitude. keep your regular job and be happy with yourself
@Mike
are marketers trying to steer you into another company.
A MLM business opportunity review should focus on the business model itself. It’s got nothing to do with failing or negative attitudes. Negative attitudes are a conclusion, not a review point.
Jumping into something without proper due diligence just because someone tell you all this “positive thinking” mumbo-jumbo?
Sure, throw your money at everything that come along that looks good. You may even hit a real one once in a while. We’ll see who’s laughing later.
Read this and make up your own mind (not about MLM, but “attitude”.
http://kschang.hubpages.com/hub/Danger-of-Seeking-Positivity-and-Ignoring-Negativity
Not necessarily 3x. In addition to the monthly fees ($10, $50, or $99) you also need to “invest” a certain amount.
For example, I buy $1000 in bids, and pay $10/month. So after 6-months I have paid $60 in monthly fees, and have had 1000 points compound for that 6-month period.
You can sign up free customers without needing PRC’s (who subscribe at $10/month). The requirement of needing 2 PRC’s is only if you need the company co-cop to assign you unlimited customers.
For example, you have 30,000 points and earn $450 per day. If you want to compound that $450 you need to buy bids with it and give them a way. Well every 2 days you have to give away 900 in bids which means you need a free customer every 2 days (you can give 1000 bids to each customer).
Someone with 30k points doesn’t want to sign up 15 customers a month (and more the next month as the account grows), so it’s much easier to find or give away $10 to 2 people so you have 2 PRC’s. Then the company gives you all the customers you need at no charge.
Someone with say only 3000 points only needs a new customer every 20 days, so it’s easy to find free customers or create a fake one.
if you make up some fake customers, you’d be putting in even MORE money, right?
Let’s say, in 6 months, you’re put in 1060 for account A, assuming 550 for account B, and maybe 540 for account C.
So you’ve spent over 2150 and six months of posting ads for ZeekRewards. What have you got? A bunch of VIP points that’s just a number in their server. How long would it take for you to break even, assuming 1.5% profit share daily, starting at month seven, given that points expire in 90 days?
Think about it.
They differentiate between “customers” and “affiliates”. A customer can be free or monthly subscriber. You can sign up as many free customers as you want with an email address and they never have to do anything – never verify email, never login, never even spend the bids. They just act as a container that you can use to give away 1000 bids per free customer.
Most affiliates only need free customers and never need the subscription ones (called PRC – preferred retail customer). Zeek lawyers have forced them to require affiliates to find their own customers (free or PRC) rather than just paying ZR $1 per customer.
In other words, if you are going to generate a bunch of fake customers, better put the burden on the affiliate to do it and not have the company create them. They are hiding behind the FTC’s Business Opportunity Rule that went into effect March 1, 2012.
More likely they realized they couldn’t create a bunch of fake customers forever and charge you $1 for it, so better shift that burden to the affiliate.
In your above example, you’d put all your investment in Account A. The scenario would be something like. Buy $1000 bids, pay $10/month, find 2-3 free customers (even if you use fake emails), and give away bids to those customers.
At the end of 3 months you spent $1030 and gave away 1800 bids, and your account total is 2800 points. Bottom line is you have spent $1030, and have 2800 points. You can either keep compounding that, or start withdrawing (fast or slow). Fastest you can withdraw is over 90 day period.
Most people switch to something like 80% reinvestment and withdraw 20% of the daily profit share. In this example of starting with $1000, after 3 months you have balance of 2800 points, you set withdrawal at 20% per day, that means you cash out about $8/day. Will take you about 125 days to get your $1000 back. So 125+90 = 215 days to break event, and you have a cash generating machine of about $8/day. The 80% reinvestment daily goes to maintain the account balance around 2800.
Of course, if the daily profit rate starts dropping below the 1.5% average, then everything starts going south.
I think the first major dip in the profit rate is when people start withdrawing faster, but it will still take them 90 days BEST case to withdraw everything, and you won’t get dollar per point, but will take a haircut due to expiring points every 90 days.
I posted a quote from Troy Dooly here yesterday … Any reason it is not showing up?? Here it is again…..
Original Post http://www.businessforhome.org/2012/03/dawn-wright-olivares-zeekrewards-coo-interview/
@Jeff
I nuked your original as spam, it was obviousnly not your own words and there was no source provided.
Regarding Dooly’s quote – all I can wonder is whether or not he’s asked them what percentage of the profit share is contributed by ZR members? Seeing as this isn’t a competitive secret (it’s a percentage, not a formula), I don’t see why they wouldn’t answer if asked.
Infact I might email that off to him now. I’ll email that very question to him now and will publish the reply.
Troy doesn’t understand the Zeek business model. In his videos that he’s released since the first “red flag” one on Zeek, he clearly does not understand the investment component and how the the virtual points.
In a few sentences, he referred to Zeek as if it is a normal product based MLM. When he did the video on tax implications he alluded to the point balance growth as actual revenue you could immediately withdraw, not realizing you had to move to 0% repurchase and “withdraw” your money slowly one day at a time.
Troy likes to cozy up with other MLM leaders and he was in Vegas at the ANMP and took pictures with Dawn and with other Zeek leaders.
Troy is like Jim Rome (if you listen to sports radio) where he is critical from afar, but once the MLM company or individual makes contact, he’s their new best friends and treats reviews with kids gloves, throwing up softballs and not asking the tough questions.
Troy thinks the auction makes a significant ratio of revenue for Zeek.
The very fact that ZR admitted that 60+% of their members earned NOTHING (and paid $$$) for the whole 2011 should give Troy pause.
At least Zeek is not as top-heavy as Zamzuu (before they went belly-up)
I’ve contacted Dooly and raised the point about ZR not disclosing what percentage of their profit share is made up of member investments and fees.
His response was that he believed it was going to be addressed in a yet-to-be-published interview he did with Olivares (ZR’s COO) but nonetheless he’ll personally ask ZR management for clarification.
I also raised the issue that citing competitive secrets isn’t a valid excuse either as it’s just a percentage number. We’re not asking for the entire makeup of the profit share or how it’s calculated.
Hopefully Dooly will get a real answer.
The 65.37% of distributors who received no income at all isn’t that much of a negative because those are just the free affiliates. They are given 100 bonus points they can compound for 60 days, then at that point they can decide to become paying members.
The reason this statistic isn’t that negative is that other Income Disclosure Statements from traditional MLM’s include distributors who purchased membership or autoship and still haven’t made any money.
With ZR, the way the investment scheme works is anyone who becomes a paying member by definition will be receiving profit share (whether they can cash out a profit before it collapses is a different issue).
In other words, those 65% members are paying nothing to be free members whereas in other MLM’s you can only be a member by paying something.
I think there’s room for interpretation, as we seem to be mixing terms here (and this is yet ANOTHER problem with ZeekRewards, let me explain).
Jimmy, you seem to regard “affiliate”, “membership”, and “distributor” as synonymous.
Yet the IDS (and ZeekRewards itself) refers to “distributor” as a DIFFERENT RANK term than that of a mere “affiliate”. Something about “personal volume” (i.e. how many of other levels of affiliate did you sell/recruit/own)
see zeekrewards.com/getpaid_qualifications.asp
Furthermore, ZeekRewards itself is precise… it differentiates between affiliate (on the right column, says “choose your affiliate level”, which seem to mean choose among free, silver, gold, diamond) and QUALIFIED affiliate. However, it also stated that un-qualified affiliate can still earn.
Yet the IDS refers to mere “affiliates”, not qualified affiliates.
I agree that majority of the affiliates that earned nothing may indeed be the free affiliates, but I think a good chunk of “earned nothing” affiliates may be PAID affiliates as well. Indeed, ANY earnings (even pennies, from selling a few bid packs) may have kept those folks out of the “earned nothing” category.
The IDS seem to be missing a LOT of information, as if it was carefully pruned of any useful information while BARELY fitting within requirements of the law. That’s my impression reading it, but then, I will freely admit to not having read too many of these before.
The current ZeekRewardsNews blog post is interesting. Dawn, the COO who is on all the corporate calls, is hiring an assistant and is demanding that person work 90 hours per week and be the perfect superadmin. It says no family, no social life, no time to build Zeek or anything else allowed.
Who is going to want that job? They are making so much money they have to pay underpay for a 90-hour per week admin? Laughable.
What the IDS really needs to show is how many ZeekRewards members suffered a NET LOSS (i.e. they paid MORE into the system than getting OUT of the system). This is further complicated by the entire notion of banking VIP points.
What should we do now ? many of my frinds had purchased VIP bids from U$10 to few of them had purchased U$500,1000,2000…etc.
if this news send out all over, most their money won’t get it back if company close the business.
What’s your best surggestion for us to do now?
I feel the one way we could do is don’t expore this news in publish or public yet, just try to tell the old members to stop purchase more VIP bids, try to set 0% repurchase to get their money out ASAP and stop to put more money into it, don’t let company know that we know this news to stop paying us cash available out to us,…What’s your best surgestion?
Nobody said they are going to close overnight. We’re merely analyzing how feasible is their alleged model of business.
Whether to continue investing or “withdraw” your money is entirely up to you.
@Amy
Going on ZR’s running out cheques to pay people with for the first time in Lighthouse’s history the other day, I’d say many are already doing this.
You’re essentially asking me when Zeek will collapse. That I don’t know. Personally after going over the business model I’d have never invested in it to begin with, irrespective of any short term gains to be had.
I don’t like the idea of my ROIs coming from new member investments who couldn’t possibly duplicate my “success” purely because I invested earlier when the rules were completely different (Zeek keep changing the rules as the Ponzi gets bigger and bigger).
This straight from the Zeek Rewards News blog –
So.. uh what? I can create an unlimited amount of fake customers to dump my VIP bids on??? And all I have to do is punch in dummy email addresses I’ve created?
How is this legal?!
“Hey guys, buy bids, give them away to “customers” you create yourself in your backoffice and enjoy the ROIs.
Oh.. and you need to publish a daily ad.”
Customer account fraud is something that’s been brought up a few times here, but I’ve never seen it so plainly endorsed by ZR themselves.
The “log in to your account first” to create new customer accounts has never worked, though I haven’t tested it in 2 weeks.
And this does nothing for fraud prevention. If someone wanted to create fake free customers, they would just create an affiliate account first.
And this does nothing for the legitimate new customer or affiliate trying to connect from their local hotspot, such as is the case in several cities in the US with free city wide wifi, and as is the case in many countries where not everyone house has cable or DSL.
Now you can buy customers from the same third party that provided the 5cc customers to ZR originally. You know, the customers that all had first name + 3 random digits. Zcustomers.com
this is not so.
to sign up as a PRC the customer has to logon from an IP where that a Zeekrewards distributor has NEVER used.then The Zeekrewards Customers PRC has to sign up and join at minimum Silver PRC level and pay with a credit card .
The Zcustomers deal aint gonna work because when some one signs up they gotta pay their $10 membership right away using a credit card. So no Gnomes,no made email addresses,no fraud.
Every Zeek distributor has got to have at least 2 real PRC “paying” customers to qualify for the daily profit sharing pool
@stewar
Unless ZR have yet again changed the goalposts, as you put it yourself, “this is not so”.
The 2 PRC requirement is required for receiving fake customers from the company to dump bids onto, it’s not a requirement to continue to receive ROIs.
ZR members can login to their backoffice, create fake accounts with fake email addresses (today’s news update spells it out) and dump their VIP bids onto these fake accounts to earn their ROI.
@Stewar
Zcustomers are not PRC customers, they are “free” customers. SO instead of paying the 5cc you now pay Zcustomers direct, it’s a nice little side business don’t you think?
And how do you know that the IP address limitation affects Zcustomers? If they were Zeek’s outsourced 5cc provider they may be given an exception for using the same IP. Or, it’s just as likely they are using CPA email submits and submitting forms directly from the end user’s own computer.
The most likely scenario is they are using incentivized CPA offers and people are willing to give an email address to earn the incentive (think Facebook apps and virtual in-game currency).
Since Zcustomers would not want to confuse users with creating a unique username, that is created for them which is why all the free customers you get from Zeek has always been firstname + random 3 digits.
If Zeek Rewards is making that much profit, and sharing 50% of profit with affiliates, surely if you have hundreds of thousands of affiliates you could hire more than 11 full time staff?
How is it possible that you are paying out hundreds of thousands (or millions) in profit share DAILY (meaning the other 50% is profit to the company), but are operating a skeleton thin crew?
Something doesn’t add-up. Unless the business model is a ponzi, albeit wrapped in a virtual points so as to hopefully avoid legal scrutiny.
@ BD
Right you are!
It’s unfortunate that so many people who have no personal affiliation have so much to say. If you aren’t a part of the program then why are you commenting as though you know (and have been hurt first hand)?
Up to this point this is all speculation. Up to this point no one has lost out except for what they have caused themselves to lose.
My group’s plan from the beginning has been simple. Purchase as much as you can and then remove that initial purchase investment. That has worked OVER and OVER and OVER and OVER and OVER and OVER and OVER and OVER and OVER and OVER with HUGE, again I say HUGE returns on top.
My sponsor has been returned more than 15 times the initial purchase amount and just about everyone in our close-knit group has been able to pull out what they started with and each is still gaining by leaps and bounds (with the exception of newbies in the downline and so forth).
It’s sad that getting 2 PRC’s should scare off anyone with an opportunity like this but it is helpful to those left behind.
I realized how easy it is to get PRC’s when I went to a Zeek affiliate luncheon (locally, not sponsored by the company in any way). The hosts are a group who simply give away their bids at random places like Walmart simply by chatting with strangers while they do their shopping. Sometimes in the middle of the night!
I realized that it’s not ANYWHERE NEAR as hard as we make it and now I just print up giveaway cards. I hand them out with a smile and sometimes a treat like candy. Sometimes I just tuck them on cars in a random parking lot. It costs SO little and does so much.
These Free customers often easily turn into purchasing customers. Many are on YouTube bragging about what they’ve won! Zeekler is unique if you take the time look at it. Compare the quality of what is sold on the auction site to the low quality items on others. I’ve taken the time to look. These are beautiful brand name items/pieces. Clearly they want to be the best.
Please don’t think that ZR is “drowning” in bids. Like the hosts from that luncheon who give away 500 at a time I have learned to do the same. And that group (which I’ve joined) is a community of HUNDREDS or THOUSANDS of people doing the same.
They do trainings, calls and meetings all over the nation. They talked about watching their money grow minute by minute. That’s not from their downline. That’s from their tons of customers buying bids!
We encourage and motivate each other for everyone’s benefit and because strong friendships have been created. We put our heads together and share not just our success stories but our ideas. That is what a real business looks like.
ZR has been such a blessing to so many – why wouldn’t you be willing to spend some of your earnings by doing things like putting ads in magazines, newspapers, flyers, billboards, online. You’re only hurting you be being stingy. Stunting and stifling your own growth.
We’re not afraid of helping this company (ZEEKLER [which was hardly mentioned in the article, if at all]) to be successful. Their success is ours and our success is theirs.
If you stop expecting something for nothing you won’t be bothered by the changes. Maybe my attitude is different because I am an affiliate who takes it seriously – actually listens to the calls (with the attornies among others), reads the newsletter regularly and enjoys creatively expanding the customer base. Not everyone has the time to do what I do – but everyone has time for SOMETHING.
If all you see is a dollar sign and you don’t truly believe in Zeekler which is the heart of the company YOU WILL FAIL. And scare tactics will ruin you. The company is growing and expanding and definitely showing more transparency.
The income disclosure statement has just been released. The Red Carpet Wednesdays where you can actually attend a huge luncheon or dinner and meet the staff and visit the HQ, the mandatory compliance course, written by attornies to help all the affiliates understand exactly where we need to be to ensure longevity through legality.
There is so much expansion why would anyone assume the ship is going under at this moment??
The community I spoke of before RIGHTLY pointed out that people have their eye off the ball. We need to focus on how we can Promote ZEEKLER much more than building a downline. Growth must be balanced. It’s more important to EVERYONE that Zeekler thrive.
Thanks to many of you who ARE affiliates and had worthwhile things to say. To the others: speak about what you know. I have seen multiple brand new cars bought, brand new rooves bought, beachfront condos bought (I live in Florida), debts paid off, trips to Europe and abroad, impending foreclosures halted and more.
Even if you think this won’t last forever (and the nature of this business is to morph but to be ahead of the curve) take it for what it is – YOUR BUSINESS. Nothing lasts forever. Your current job won’t last forever but it hasn’t stopped you from pouring yourself into it today.
This is a shared vision not a one man show. Some people just need to grow up and be willing to take more responsibility for their success. If you aren’t willing then sit down so that you aren’t in the way.
Trust me – not everyone is pulling out as previously stated. Not NEARLY as many as some of you hoped when you started yelling “fire!”
There’s a lot more that can be said because there are SO MANY resources. Please visit the ZR homepage and look at the lower right corner for the times and numbers for the opportunity, training and leadership calls. Skype in! Their educational and just plain excellent!
To the rest of you I wish you all the best. My prayers are with you the Zeek family (affiliates and exceptional staff [many of whom work from home] – all of whom work tirelessly to assist us when we need help) and the prospective affiliates. If you don’t feel peace to accept the opportunity by all means DON’T.
I would never do something in that state of mind either. But I’m thankful that I had a great sponsor and awesome support within the affiliate family. It makes a world of difference. A totally different mindset and excitement about things to come. Like many, this opportunity changed my life in amazing ways! I am forever grateful. Truly ONCE in a lifetime!
~Erin
Some of us, including myself, ARE part of the program. Some of us, myself and Oz, have listened to the audio, watched all the videos including interviews with Dawn, and have read the ZeekRewardNews. We have also credited sources and quoted them here so as to provide objective analysis.
Just because you do not like the conclusion doesn’t make the observations or analysis any less accurate.
There’s a big difference in joining a program (such as a HYIP or AdSurf) knowing that it is illegal and taking a gamble vs. actively recruiting knowing you are promoting a ponzi and the people you bring on board (or they people they bring on board) might lose some or all of their money.
Just think about it, if everyone who joins will earn over a 100% ROI. Where does that money come from? It’s not the penny auction, and we can have a 100% objective analysis of penny auction to show revenue generated from PA does not even cover 1% of the daily profit share paid out by ZR, and even LESS so if you remove the BOGO promotion and the fake accounts used to obtain VIP points + 20% commission by credit card.
And these people, or perhaps the next batch of newbies, will be the ones that get screwed. No one is disputing that YOU (or I) made money. That’s the way ponzi’s work, obviously. The people in early always make money.
Better not let Zeek Rewards know you had a meeting. This is strictly prohibitted by compliance.
HA HA HA… you are joking. What part of free bids being giving away in the millions does not meet your definition of “drowning in bids”?
Have you looked at the closing prices of items? They sometimes go for more than the cash out or retail rate. And the ones that do close under cash out are multiples higher than what you would pay for on any other real retail auction.
And don’t say “well what about VIP bids”, because that has its own bid inflation built into the VIP point subsidy and 20% commission. If you have real customers using Zeekler penny auction then they won’t stick around long because the value they are getting from Zeekler is minuscule compared to what they should get out of a normal penny auction.
And we know the stick rate for a penny auction is very low as it is, let alone for Zeekler where a legitimate retail customer has to compete with inflated bids.
Finally, look at the number of items auctioned per day. Has it changed from 3 months ago? What is the ratio of items to bids in circulation? How does it compare to a normal penny auction?
You truly want objective analysis, then ask those tough questions, you won’t like any answers you get which will show Zeekler PA is a joke and is just used as an artificial way to attach a legitimate retail revenue source to the investment ponzi.
I am not replying to the rest of ErinGC’s reply as the above cover the main points, and we start getting sidetracked into logical fallacies and promotion, and I’d rather keep the discussion objective.
Erin’s comment essentially boils down to the ‘I’m getting paid, so how can it be a scam’ argument.
The rest is mostly just waffle and sounds like someone regurgitating a marketing spiel.
I’m glad you pointed out the meeting compliance issue, as I noticed that as well.
As to why Zeekler wasn’t mentioned, because you don’t get paid commissions from Zeekler, you get paid commissions from Zeek Rewards.
They are two seperate companies.
I have been reading posts on this site for about two weeks now after a friend tried to get me to sign up. Now I check everyday for a new post.
Jimmy, OZ, K. Chang, keep up the good work!
I have been wondering a few things about zeekrewards…
If there are 200,000 affiliates with an average of lets say 25,000 points( which is probably low)
That would add up to 5 billion points….Are we supposed to believe they have $5B in the bank if everyone dropped out?
Would it be that hard for them to show you the daily profit generated from zeekler?
What about the actual number of bids sold to paying customers? I have looked at zeekler and its a joke compared to other penny auction sites. One has to wonder how many of the bids are fake/subsidized
@gen3benz
The points generate a ROI, they aren’t worth anything outside of the ZR opportunity (virtual currency). Basically you buy bids, do some pointless tasks (give them away, spam the internet) and ZR pay you out a share of all the money invested that day by yourself and other members.
How much of that share you get depends on how many points you have. Points expire, so you need to keep re-investing and that’s what keeps it going. Once the new money being invested dips though, it’ll fall apart.
As time goes on this becomes more and more likely as old members who got in first accrue point balances that absolutely dwarf any new members return (even if they max out their $10,000 limit). A <100 point share vs. members with millions of points (shares) isn't going to really attract new members to invest more real money.
Then of course there's the side issue of requiring an ever increasing amount of money to sustain the bid balances. Bids cost money and need to be purchased. With the large bid balances this is paid out of returns.
Once those returns drop low enough that enough bids can't be purchased to deliver a consistent increase over 90 days, again the system crashes.
Easy as pie. If Zeekler money is being fed into the profit share it’d be easy to track. And who purchases what bids is also easily to generate a report from. You’d just need to isolate anyone who wasn’t a paying customer and generate a report from the paying customer purchases.
On the interview with Troy Dooley, Dawn says that of course Zeek Rewards needs new customers to stay in business. Isn’t that like admitting that it’s a ponzi?
You take any Ad Surf or HYIP program and stop the flow of new investors, it falls apart.
You take any product or service based MLM and stop the flow of new distributors, but maintain the existing number (no one leaves, they just pay their monthly subscription or autoship), and the company is still viable. But Zeek would fall apart. There is no way the small amounts of penny auction revenue + monthly subscription fees can cover the daily profit share.
Therefore, it has to be a ponzi. The only difference is instead of just packing up and leaving, what Zeek will do is devalue the points by lowering the profit rate. Every one will lose 70-80% of the value of their points. Some will still make money if they had enough account growth.
Very strong negative vibes in here. People need to go find something productive to do with their lives. Fate will have its way with zeek so leave it be. The ford mustang went for $5,000 how many pennies in $5,000?
$1.00 paid VIP bids only! Zeekler plans on auctioning off homes and more cars in the future how many pennies are in $50,000? ZEEKLER MAKES MONEY!
And how many Ford Mustangs in Zeekler?
So why aren’t they?
They can’t make it a regular thing due to the notorious retention rate penny auctions have. With all the bid inflation of Zeekler, can’t have things looking too suss with high ticket items appearing regularly.
Lot of reading in here. Extraordinary assumptions and utterly ridiculous math. Comments clearly based on opinion and supposition. Clearly none of the commentators in the “analysis” of this business have never bin involved in a start-up or an IPO or have any idea what it takes to keep up with explosive growth.
The words “Ponzi and Illegal” are thrown around as if fact not conversation or debate and little thought seems to be given to the truth of either. There is a clear misunderstanding of the words Product and Value and some outright denial of fact proven. I can go on for a great while here about the total irresponsibility of this conversation but understand that it is a good conversation to start and have.
No one wants to get scammed. If you are going to have these conversations please at least get your facts in order before you voice an opinion. One thing I will tell whoever it was that was bright enough to say that “disclosing the % of profit share” was somehow not propitiatory is clearly ignorant of a competitive business who’s entire income structure is based on its design ratios.
If another MLM or Auctions site could get those figures right then what is to stop them from doing the same … I love the creativity this company has shown in developing and entirely new business.
It is exciting, it has issues in growth and design as ALL start-ups do. If some of the stupid math here were even close to true this “scheme”, “Ponzi”, “Illegal” business would be larger than some of the federal bailouts and bank failures without the subscription fees.
Pretty sure in today’s climate the feds would be all over this one as public as it is. Further, as many years as I have been in business in the world of finance, ever so seldom have I heard of a Ponzi hiring the best lawyers and consultants in its industry to whip it into legal compliance ,,, it defies logic.
Good debate, use facts not supposition, apply logic and math based on a complete understanding of the company revenue structure and you will help a lot more people and not be spreading gossip. I Look forward to learning more
I could have not said it better! I’m one of those people that believes in this company! They have changed the lives of my whole family!
Richard T.
@Justlooking
“Ponzi” is usually used in the meaning of “an investment scheme where they use the money from participants (investors) to pay out interests”. The opposite will be “where the interests are generated from external sources”.
“Investment scheme” is a general description for a system where people invests money in order to make ROI Return of Investment. We will usually analyse WHY people are investing money, and ignore many of the details used to disguise a scheme.
This website will usually analyse business models, rather than the laws in each and every country or state.
Most comments here are made by and intended for “normal people”, without any specialization (like lawyers and so on). Most people will usually KNOW that the question about “legal/illegal” will have to be decided by the correct authority in each and every country or state. They don’t have the need for having it repeated over and over again.
We are usually willing to repeat it when people seems to have “special needs”, the few times we are able to detect such needs. Most often they don’t have those needs themselves, but they believe other people have them (believing that other people can’t identify “correct authority”).
I keep reading about how zeek rewards is a scheme and how the company is going to fail because of the changes in the law but guess what the business world is amazing in the way that it can adapt.
There are now companies that have developed since the new law went into effect where Zeek rewards affiliates can buy leads to give sample bids away to and guess what some of those leads have turned into paying customers.
I have been in zeek rewards for about three months and I am doing great and I am more motivated than ever. Here is the thing that is not addressed here if the company makes less money a particular day the payout is less.
So in other words they have made it sustainable. There is no guarantee on the daily payout. I will say this before you knock zeek rewards try it. They offer free memberships that cost nothing which allows you to kick the tires for a while and then you can decide for yourself instead of listening to the so called experts.
Thank You M_Norway. I understand some get carried away and thus I can appreciate the core of the conversation.
My most general concern with the math is that the math assumptions are based on 100% retention, 100% participation. By their own income statement neither is remotely true.
In fact what I would have thought to have created a much higher than average retention and activity rate due to the simplicity of operations and the high earning potential seems to have barely taken these two critical components out of the MLM average arena.
There are other very silly assumptions such as if everybody quits paying their monthly fees the business will fail … the idiotic word … DUH … comes to mind. What would happen if all of Nu-Skins reps quit tomorrow …
Another math genius talks about 2 penny auctions and the number of bids sold yet I see 12 auctions running near simultaneously earning literally dollars per second of gross income. Bids being used by the thousands per product. and again assuming that every bid is being used at every instant of every day.
I see a claim that Zeekler and ZeekRewards are not the same company and thus this makes one a Ponzi and the other a stand alone. Problem with that theory is that every MLM is then a Ponzi.
It is simply good practice to separate the marketing branch from the other branches of your business for legal protections while contracting branch to branch. It would be lazy business planning and near suicide in business such as MLM to do otherwise.
There are simply to many reps to effectively maintain compliance 100% of the time thus exposing the very business and product you are attempting to sell to liability.
There is, it appears, a legit question about why the 2 PRC instead of the 5cc. I can only tell you that doing the math as I understand it this is a money loser for the company.
Simply put, if through the 5cc program you must pa for each customer you use @ $2.5 per customer and you are giving away the maximum number of bids, at the higher levels the company is giving up the sale of as much as a customer per day or more than $65 per month in trade for $20.
There are concerns about internal fraud and scamming the ZeekRewards system. Every multi-level I have ever looked at has the same issue including setting up bogus addresses and mail boxes. Something Amway got hit with as well as several others.
ZeekRewards is a unique concept in the MLM industry and it has issues for sure, haven’t ever analyzed a start-up that didn’t have a few issues, including legal, to work out. ZeekRewards has made no bones about that issue and has asked for patience while they work those things out.
Unless the top lawyers in the MLM field have all gone on the take as well as the top MLM consultants and tax lawyers, it would appear they have picked the best they could find to remedy legal issues.
Hardly seems like a scheme where fake documents are produced to keep the participants in the dark while the primaries make off with the millions.
Because of the record keeping system it would be near impossible to file fake 1099 with the IRS and thus reporting their own income would have to be as near accurate as can be or they would get slammed (especially in today’s governmental environment).
I continuously hear the word “Investment” used, which is an industry I am intimately familiar with. ZeekRewards is very clear that you are purchasing product. You will not get that money back period … non-refundable.
No hiding that fact and they make no attempt to hid it. First clue this is not an investment. It is made clear that you must make certain efforts to share in a percentage of the profits. (clearly they have had some issues here but are working toward remedy if they have not already fixed it)
Investment is passive. Income is dependent on personal efforts of marketing and finding other people. Investment is passive.
Operating any business requires time, energy and some type of marketing. It appears that this system is set up to say, if you will use your money to pay for our marketing samples and help us market a couple of our primary products we will share in the profits with you.
How is this an unreasonable business model, it is done in many different business models every day. Just because someone does not agree with the amount of work to pay ratio does not make it an investment scheme.
It is a “profit sharing” concept. If the sales force makes no money, the company makes no money. Is Amway any different, or Nu-Skin, or Xocia or, or, or …
The nice part here is if the company makes no money, neither does the sales force. If you question the amount of product being sold retail vs. personal consumption all MLM would collapse. If you think it is excessive with ZeekRewards you would be ignoring the facts and history of the industry.
Every company needs customers and it should be a goal here too. What I know of it if this is not the case, it is and issue with the people who recruit and do not train or tell their new people customers are not required. This may be some of the reasoning behind the PRC to help prevent lazy people from scamming the system … only a thought here.
OK. Rambled on long enough about the very premises of the assumptions made in this conversation. Looking forward to more.
I love it how people come on here and claim the math is flawed but offer no analysis. For every example I’ve shown, I have broken down the math to the penny (no pun intended).
And many commentators here who recognize Zeek is a ponzi are affiliates, such as myself. So my comments are well qualified.
I have listened to every corporate call going back 5 months, including the ones that are not recorded. I have corrected my another affiliates here posting information in support of Zeek, but having their own data incorrect.
So what is this “opinion supposition”? Please elaborate.
@Justlooking
And that has what to do with anything? Zeek Rewards is neither.
Sorry but a percentage is not a design ratio or competitive secret.
With penny auction revenue, any schmuck can calculate a percentage number required to keep the commissions rolling. The methodology is not under question here, it’s the assertion that penny auctions have anything to do with the commissions.
A fact proven by the disclosure of the percentage of revenue injected into the daily ROIs.
Competitive secret my arse.
Give it time. ‘The feds haven’t done anything yet’ doesn’t legitimise or validate the business model.
Yeah, because Bernie Madoff and every other scammer out there always represent themselves in court.
‘They hired lawyers… SEE of course it’s not a Ponzi’.
Sorry, what were you saying about assumptions and the utterly ridiculous again?
That’s not how a ponzi works. It has nothing to do with membership fees. $10 a month or whatver it is (doesn’t really matter now all levels can dump 1000 bids on a customer) pales in comparison to the daily investments being made in said bids.
Only in select instances. Most auctions have bugger all bids spent on them, I noted this pecularity when researching my article on the penny auctions themselves.
Except that it doesn’t. Most MLM companies are self contained and operate independently. Zeek Rewards needs Zeekler to prop up the illusion that it’s not a Ponzi.
You can make up whatever bullshit you want to justify it. At the end of the day the majority of MLM companies out there operate as a single entity. You don’t go running from one company to another to participate.
Lawyers don’t legitimise a company. Like myself they just analyse what’s infront of them. I don’t believe any consultants, lawyers or anyone else have given Zeek Rewards their stamp of approval?
And even if they did, that doesn’t address the gaping holes in the business model (such as keep the percentage of the revenue share that comes from the penny auctions).
Agreed. And that’s hopefully when the hammer will come down (no pun intended). You’ve got all these members who have to file tax returns in April and we’re expecting a large number of audits to be undertaken as a result.
Should be hilarious to watch unfold.
Obviously not familiar enough.
I don’t care what Zeek call it, a product, an airplane, your grandmother’s undies… it doesn’t matter. Functionally you pay them and earn a 90 day variable ROI. Product sales do not generate ROIs, investments do.
Agreed. Sign up, waste 20 seconds a day spamming the internet, purchase customers for peanuts and give bids away to said customers and watch the ROIs roll in. That’s about as passive as you can get without it being a blatantly obvious Ponzi scheme.
Doesn’t change the fact that that’s exactly what it is though.
Yes. None of these companies will pay out a 90 day ROI.
But it’s not and never has been with Zeek. You just pay someone zcustomers or previously Zeek Rewards themselves $2.50 a customer and dump your bids on them. Customers? What customers?
Zeek Rewards is and always has been about the ROI you get when you invest in VIP bids.
Please. It’s about as unique as every other Ponzi scheme out there.
Other MLM’s *do* indeed report their revenue ratios, because it’s called transparency. How is it proprietary to know what ratio of revenue comes from the penny auction?
Clearly you are making overly generalized statements with no proof. I have worked in many startups, including going through an acquisition and an IPO. I can tell you one thing for sure, all of these startup companies had more than 11 employees.
There you go on again accusing people of stupid math. Can you provide one example? Quote it and explain why the math is wrong.
@Justlooking:
If you’re really interested in the obvious truth, do this simple experiment: go over all sales from a single day, and assess the revenues from them. Remember: VIP points can be bought for as cheap as $0.4.
Now, take the daily revenue, cut it in half (I won’t even ask you to deduct the money it would cost Zeek to just buy those items), and ask yourself whether this amount is enough to support an average %1.5 return on a careful estimate of the ever-increasing active member points balance, let’s say, 20 million points globally, or even 10 million.
Or, would you rather maintain the belief that someone would pay you outlandish interest on a 3 minutes a day work and $10,000 investment, with no risk (you do realize that when average returns drop to around %1.1, you start losing money).
Don’t get me wrong, I’m a casual investor, and would be happy to let my money work for me, which is exactly why, when approached with this offer, I studied it inside and out, and it smells to high heavens, to say the least.
Even the Alexa data they wave around like an honorary badge stinks when looked into in depth.
Jimmy it does no good to argue with you. I am sorry if you are offended with my math. Read my last post. I did business analysis for a living for years. Do I think there are some issues with ZeekRewards that need addressing? Yes. Are they addressing them .. it appears so. Can I make the math say whatever I want to based on erroneous assumptions such as 100% participation and activity … you bet.
Your being a member lends some credibility to what you say. Your math on the auction site by your own statement is based on 2 auctions and little else. You seem to have little knowledge however of what it takes to start a business and seem to assume that it would be perfect the day it opens. I simply tell you I have never heard of that business or any model.
This is a good conversation, I simply would like information that is true and accurate so that the discussion can provide a solid base for choices made. Honestly, you sound far more like someone with and axe to grind than genuinely interested in the facts and business model here.
Try redoing your math for Zeekler based on average number of bids per minute 24/7 on the most consistent number of auctions running simultaneously. I think you may be surprised.
Try taking the actual participation and retention rates as well as the true average number of bids and then look at your math.
There are things called actuarial tables that are used to figure this stuff out down to the .01%. Insurance companies depend on it.
I am not saying ZeekRewards went to this degree, simply that one could never create a business model to last based on your math either. Redo your math and let me know … I could be wrong too
Perhaps you didn’t read the right articles. Ponzi schemes are ALREADY illegal. There was no new law, merely new disclosure rules that Zeek considers *may* be a threat to their existence (i.e. they may run afoul of).
So Zeek rewards affiliates can buy bids from “companies that have developed”? Which is NOT Zeek, I presume? Or did you just wrote a bunch of nonsense?
That’s great, but it doesn’t address whether the company’s legal or not.
They *say* they are making less. For all we know they generated that number out of their *** as they REFUSE to explain how they arrived at it.
No they did not. They make it “seem” sustainable. There’s a difference: no mathematical proof.
Usually it boils down to something like that, what you showed in your own comment.
* people have invested in a scheme
* they hope the income will continue forever, so they won’t like any negative comments about it
We write for a much broader audience, and people who have special interests in a project can’t expect us to write something designed especially for them. There’s lots of other websites willing to write very positive reviews.
Usually, people are welcome to post their own viewpoints or add corrections, but usually it boils down to very technical definitions and what people FEEL is “right/wrong”.
Ponzi scheme is a general description for a business model, where a significant part of the activity is aimed towards attracting “investors” rather than “retail customers”, and where the business model depends on contineously investments/reinvestments to be able to pay in the long term. It’s a business description rather than a description of laws.
Bernie Madoff’s business model was a Ponzi scheme for 15 years or so. It didn’t suddenly switch from legal to illegal when it collapsed, it was a Ponzi scheme most of the time. If anyone had called it a Ponzi scheme in 2005 it would have been a correct definition, even if it hadn’t collapsed yet back then.
Except Burks claims to have been in business for 14 years, and Zeekler / ZeekRewards has been around since 2008. It ain’t a startup or a new business.
Guess that throws your entire tirade out the window.
Tell me, do startups hire lawyers 4 years after they opened to check “are we legal?”
Chang, there is no tirade here, simply pointing out that a fair number of the assumptions here are at best a guess.
for example, the number of bids earned and given away being far out of proportion to what the auction can produce. A fair concern. The math is so faulty based on the guys own assumptions that I can come to no conclusion.
For instance, are the number of actual bids per minute calculated in his formula?
How about bid rot (not used, different industry term for unused product)does he know what that is? Any sample program gives away many samples to get one sale.
How about actual active affiliates and what percentage of them are giving away the max samples or the min samples. Not trying to be obnoxious here just that the math is non-sense without know all of it.
This is like me saying there is a bid every second so the company makes $86,400 per day per auction and they have 12 auctions going simultaneously so they make 1,036,800 per day! Great picture … lousy and incomplete math. What are the variables here.
Got any facts to provide these variables? (and these are only some of the variables here) None that I have seen to this point other than the company income statement and this guys math assumptions. So maybe we could begin with accurate math before we decide what is sustainable or not. Just asking
I went over 20 subsequent (following IDs) auctions, and was EXTREMELY generous in calculating the profit for Zeekler.
Given how each auction can easily last 2-3 hours even after reaching the 20 second phase, and that there’s 29 auctions going on at any given time, I figured a generous number would be 240 auctions per day (this actually should be much lower, as most open auctions aren’t active at all in terms of bidding, so it’s probably much longer than 3 hours between an auction appearing on the website and ending).
Averaging 20 auctions (not even considering the possibility that a VIP bid could cost less than a buck, even assuming that each “retail bid” is $0.65), I figured the site couldn’t make much more than $200k a day, that’s $100k to distribute as the daily profit share, in a very, very, generous scenario.
The average daily profit share being %1.5 (let’s say 0.9%, to account for point retirement), that would mean all affiliates who receive the daily profit share cannot hold more than about 11mil points, that’s globally. Any more, and the daily return cannot be what it is now.
How many active affiliates are there? I don’t know. When it was pitched to me, I was told 200k. I know that in my small country there’s almost 4000 now. Let’s play it really safe and go with 50k. That would mean an average affiliate cannot have more than 220 points. And revenues from Zeekler would have to grow 1.5% (or 0.9%, or heck, let’s take even 0.5% a day – that’d make 15% increase in sales a month from now on), before daily profit share drops like a rock.
Now, is my calculation perfect? Heck no. Based on approximation and assumption? You bet. But even if I’m off by a magnitude of 10 against Zeekler, the numbers just don’t add up if you assume this is not a Ponzi.
If you have different calculation, based on numbers from Zeekler auctions that I can go and look up, I’d be more than happy to see it. Who knows, maybe I’m missing out on the opportunity of a lifetime, and I’ll be grateful to anyone showing me that.
P.S.
Two weeks ago, I showed my calculation to the one trying to recruit me, and he said he will ask the one who started ZR in my country, who happens to be a math teacher. No response from them yet.
I agree it would be great to know these numbers. We don’t.
What we do know, according to their income disclosure, is that there are somewhere around 200K in ZR and only 24% are active, or about (I’ll use 250k affiliates as I am not sure.)That leaves some = 60,000 active. Only 17% of those are in the higher end, giving and earning Bids. (not unlike many MLMs.
Your calculations based on a per auction basis could be better calculated by the minute and average bids per minute rather than auctions as some last longer than others but the bids come in continuously regardless. (this too is only a gross number).
You have no calculations for those bids unused or affiliates falling out with bids in place. (May or may not be a concern but needs to be looked at).
What are the incomes from the other sources of income. Stores, online shopper, advertisement sales, monthly purchase of the business centers, we just don’t know that.
So if you assume that the auction only provides a moderate percentage of the income or even a significant percentage, all of a sudden the numbers can work and the company is not making millions a day on unsuspecting affiliates.
These are very real possibilities and why we need more solid information if we are going to have a rational discussion on sustainability.
I made some comments above just to spark some thought and I made some that were assumptive myself. I get batted down for making assumptions based on limited information while other feel self righteous in their analysis of the limited information. I am not saying everything is good or bad. We simply need better information before we start throwing around some pretty vicious accusation.
I do agree that the growth is something to look at as it pertains to the maintenance or gross earnings to the company.
I do agree that it is clear as the growth levels out incomes will decline as has been true in many companies, especially IPOs that boom onto the market and then settle below the initial offering. It is just business cycles and customer retention that matters.
I understand the concerns, not the conversations based on very limited analysis
There are many different factors that have to be known and taken into consideration. Remember affiliates buy bids to give a way as samples to new users so ofcourse those bids are profit for the company.
Then not all of those users will use all of those bids because they find that they arent interested in the penny auction. Well within 14 to 30 days those bids are absorbed by the company because of expiration. Then you have to consider that even though the company pays out everyday not many people are cashing out they are simply buying more sample bids to give away. Then even if you do begin cashing out you only want to cash out 20% and buy bids with the remaining 80% or you will dwindle to 0 points because of the 90 day expiration.
The other key point is to remember that you do not have a bank account that is drawing whatever the percentage is you have points and each day the company looks at what they have to pay out in cash vs bids being bought.
Now take a look at say the # of 50,000 affiliates but it has been said that there are somewhere in the neighborhood of 200,000 and increasing everyday. lets say each affiliate bought $2,000 in bids to give away if we use the #50,000 that is over $100,000,000 in sales and many of the people I know have put in between 5 and 10 thousand.
Now lets say that each one of those affiliates are at Gold level which is middle of the row at $50 a month that 2.5 million a month in sales. Now the big question is how many of these customers that are given samples buy bids at the auction I can only say that my average has been about 15% of my customers have bought bid packs which out of my 226 customers that is around 30. Which was an average of a $65 sale to each customer.
Now if every affiliate had this same luck even in just one year that would be 1950 X 50000= 97,500,000 a year in sales. This doesnt even consider the sale from the free store. Or if the # is 200,000 plus affiliates.
Do not kid yourselves Zeekler is making big Money and growing very fast. Even if you are the most negative person it is tough to deny that this company is very profitable.
Based off 10,000$ buying sample bids . at 0% for 90 day’s you make 3500.00 profit . at 100 % they make .35 on the dollar because you pay 1.00 per bid which would be 3500.00 . also on the 31st and 32nd day off retirement you loose it .
bottom line here is zeek might be taking all the bids , but at the least they make .35 on the dollar . They have money coming from all different angles and they get % from alert pay and solid trust .
Just because a person has 100,00 points does mean they can take out 1500 a day forever , thats why point retirement is in place . If they set it at 0% points generating will come at a hault and start to decrease daily because of the retirement . also they get monies from search engines .
plus monies invested in products are also compounded . especially when .65 on a .01 is involved . I really dont think its a ponzi scheme , more like a math mastermind . Don’t be surprized to see more bidding sites doing the same .
It is quite annoying when people come on here with sweeping generalizations about how others are wrong, but don’t provide any specifics. What analysis is wrong? Can you quote something please (use <blockquote> tags to quote in green blocks).
I would like to discuss any and all topics with you with 100% objectivity. I have lot of data, many supported by screen shots. Some have been posted in here, though I don’t expect you to read every comment on all the Zeek posts here. But at least do us the courtesy of posting a specific issue you do not agree with.
Many a Zeek cheerleader have come here and had their eyes open when they look at the facts in detail, such as the issue of bid inflation; or the comparison of penny auction revenue looking at ratios of bids-in-circulation to -prize-availability; or the fact that the profit share is a dynamic compound rate (not static) due to the increasing ratio between compounded rate as a result of the 90 day bid expiration.
These aren’t newbie topics that any schmuck would just make up, so please spare us the the subjective lecture, but we respectfully welcome any objective analysis.
Are you trying to calculate profit to the investor? It is not $3500 after 90-days. Buying $10k sample bids and having 10,000 points today, and keeping reinvestment at 0% (100% cash out), means that if the rate stays at 1.5% average then in 90-days you will converted 10,000 points to $28,189 cash.
That means Zeek has to:
– Pay you $28,189 (your original $10k, plus your $18,189 profit in total after day 90)
– 10% commission on day 1 to your upline
– 5% commission on day 1 to their uplie
So your net profit is $18,189 minus some small costs for monthly subscription fee and getting free customers to give away bids to qualify for profit share.
So how is Zeek Rewards or Zeekler making any money here? Surely they can’t be saying the daily ad that you are placing for 90-days is drawing enough retail revenue to Zeekler to offset the money they paid out?
The only possible answer is the ponzi investment scheme.
You mean the Adsense block they place on Zeekrewardsnews that doesn’t have any ads running except the default Google Adword or the occasional ad branding (that pays a few pennies a click, no pun intended, but no one clicks on them, they are irrelevant and companies run them knowing you won’t click but they want to use the internet to put the ad impression in your head for branding).
I doubt Zeek is making any ads from that. In fact, I’ve tried to place ads in that ad block using content network placement but it costs $4.50 per click. No one is going to place any ads there. You probably see a Google Adwords there now? That usually pays 3 cents on the content network.
You don’t need advanced math to figure that money has to come from somewhere – in the case of this business model, from retail customers (not affiliates investing money or buying bids for themselves as fake customers).
And if you don’t believe it is an investment ponzi, search Google for any Zeek related content prior to Aug 2011. They use all the same ad language as seen with HYIP’s and AdSurf’s.
They also used to guarantee a fixed 125% ROI and did not band the word “compound interest”. They also used the same 10%/5% referral compensation scheme as all the HYIP’s and AdSurf.
To say that this is some new unique, never-before-seen business model is to a bit naive. All Zeek did was replace ads with a penny auction and disguised the fixed ROI with a variable one masked behind virtual points.
Money is money example a 100.00 gift card selling at 10.00 = 410.00 profit . now do it on 100,000.00 . this is not a retail company or any other company that strives on 20% or more profit.
If zeeler is hurting for $ they can aution cars and etc . So a person to figure out zeeks profits are just barking at the wrong tree .
With all your information, please provide
1. # of active affiliates
Please break them down by percentage of levels in MLM
Income
2. Income to company from all sources of income
Business centers and levels
Sale of tools such as ads and banners etc.
Sales from online stores
Sales from the online shopping search engine
Income from ad companies
Income from penny auction
average number of bids per minute
costs of operations
costs of wholesale goods sold
3. any other sources of income that I may be missing.
It is difficult to assume any of this. If you have this information it would help a great deal. You like getting snotty and accusing me of not having information yet you have provided little if any of this.
I am simply saying the business model needs real numbers … all of them to be seen so that they can be analyzed properly. Figure I am from Missouri … show me
3.
3. Bid rot
4.
Jimmy you’re wrong lol , If a person drops 10,000.00 on a bid buy set at 0% takeout = 100% they dont gain points . you stated $28,189 after 90 days at 100% that is also wrong because that is points not dollars , and you will also have 10,000 compounded around 1.5 daily into your retirement .
So if a person goes in cold for 10,000.00 at 1.5 daily x 90 days = 3500.00 profit . they would only build on the points given from thier signup.
Now, on the flip side if they go in at 100% they start off at 10,000 points compounded around 1.5% daily for 90 days then zeek takes 10,000 points away because it drops from retirement . Thanks for the Laugh 😀 rofl . heheheh … thanks for making my day lol
Not true because you don’t factor in the VIP points given to the affiliate. In your example:
– Retail customer buys 1000 retail bids for $650
– Affiliate makes 20% or $130 commission
– Zeekler makes $520 revenue + $10 on auction = $530
– Zeekler pays out $100 gift card, so net profit of $430
However, the part you have left out, and why I keep talking about bid inflation, is that that $650 spent not only resulted in $130 commission to the affiliate, but also 650 VIP points that now earn compounded interest.
So Zeekler has $430 profit but Zeek Rewards now has to pay 650 VIP points (plus the 10% and 5% commissions on daily profit share that flow to the upline).
If Zeek Rewards were to stop paying matching VIP points on retail bid purchases, they would get close to zero revenue in Zeekler auction.
AH yes, you are correct. I was using the 100% reinvestment calculation but replying to your 100% cash out scenario.
My point remains the same. Zeek has to pay out $3500, plus $1000 (10% commission) to the upline, and $500 (5% commission the the upline’s upline). So Zeek is paying $5000 ($3500 + $1000 + $500) in return is 90 days of spamming classified ads?
JtotheT
This is what I mean with these guys and incomplete information. The company has many sources of income and perhaps there is a balance issue but if they can’t provide the business model and the income streams that run it how will they debate the viability of the income model.
As you say, if you take away the 100% it is $3500 if they keep the 100% it is no longer 10000 bids but that plus the new purchase.
I would like to see the actual numbers, it would help. Just frustrating debating based on partial or intentionally incomplete information.
Jimmy you dont have a clue .
1. Points are not dollars
2. Setting your percent at 0% means 100% of the daily % number goes to cash to build up to take out. “New Balance”
3. Setting your percent at 100% means the daily cash reward buy’s bids and goes into retirement but covert to VIP points so you can gain points.
4. Points in retirement converts to VIP points so you can gain the percentage daily.
5. When you Buy bids they are converted to VIP points
6. After 90 days of you collecting % daily from retirement points they deduct it from VIP points .
Oh please. I cut & paste the wrong cell in my spreadsheet to answer the question, and I quickly corrected it. You can read my other hundreds of comments on Zeek Rewards and Zeekler here and see how accurate my numbers are.
Also note that I actually show the numbers and the math behind it where relevant so others can fact check. You continue to speak in generalities with no specifics.
What is more telling is that you, and many affiliates and prospects, aren’t paying attention to bid inflation. This is either because you are not aware of the matching VIP points for retail bids; or if you were aware, then you are fraudulently representing the revenue generated from the penny auction.
Lets say today I start out as a diamond member . and bought 10,000.00 worth of bids . I would have 10,000 VIP points . and 10,000 in retirement that expires 90 days from now . I would also have 200 in points balance .
If I set it at 100% every day my 1.5 or whatever % it is , it would buy bids and build in retirement and build my VIP points ballace and have the VIP points compound daily for 90 days . So i would have 2 things going, my VIP compounding and my 200 bonus points .
after 60 days 100 bonus points will retire . and in 90 days 10,000 points retire. 100 points will go into retirement and convert to 100 VIP points . and will be taken out in 90 days . then 10,000 points will be taken out off the VIP balance on day 90 and keep what I earned for 90 days
I posted a comment to the board earlier which did not make it public. The key point to this discussion that is not part of this equation is zeek affiliates are not investors. we buy bids and give them away.
Everyday you earn a cash award that you buy bids with or cash out. some people buy more bids and have built substantial point totals which in turn gives you a larger daily cash reward. The fact is its a new concept and its growing fast.
So I would just say to those that are against it now “just keep watching from the outside” it will still be here for you in the future. Oh and ofcourse its a risk but its not a ponzi just dont risk more then you can afford.
Jimmy don’t comment anymore , You don’t know the difference between VIP points and cash and retirement . 30 days retirement would be over 4500 based of 10,000 VIP bids compounding . So if the person set % a 0 he would take 1050.00 for a very short span .
I can boil the different mathematical analysis down to something simpler = how a business works (if we assume Zeek runs a legal business).
Zeekler has the following sources of revenue:
* Bids bought by retail customers, paid with money.
* Bids bought by affiliates, paid with money.
* Bids bought by others, paid with money.
It doesn’t really matter whether the bids are used on auctions or thrown away (if some people prefer that solution). The revenue is generated when people use their money to buy bids, not when they are using the bids.
Using VIP Points to buy bids won’t generate any revenue, it will only generate changes in the VIP Points balance.
Paying people in VIP Points won’t generate any expenses. The expenses comes when people starts to withdraw VIP Points as money.
Theoretically, the only way to generate revenue is to drive retail customers to the auctions, the kind of customers that use money to pay for bids. Free bids won’t generate any revenue, and neither do bids paid for using VIP Points.
Zeek Rewards are mostly focusing on attracting new investors, so we have a very clear idea about where the money comes from – the so called “daily revenue”. Most of this “revenue” seems to come from investors.
And you have an inherent assumption: that Zeekler is generating a ton of profit.
Let’s assume that you’re right for the moment. If so, why have ZeekRewards at all, which is sharing the profits? WHY? Why not keep the profits all for Zeekler? What does Zeekler get out of it?
Zeekler would earn a lot more by shutting down ZeekRewards and save the profit shares for itself, if your numbers are right.
Oops, I forgot the FSC stores.
We can use JustLooking’s (or JtotehT’s) FSC-store as an example, and assume the amount generated by his FSC-stores to be an average amount for these stores?
How much did you sell for last month to external customers in these stores? Or last 3 months?
Oh please, you’re just making yourself look stupid now. I’ll let my comments speak for themselves. I’ve had hundreds of comments on Zeek alone on multiple posts (not just this one) with substantive information you can verify on all of them.
Why would anyone do 30 days retirement? I searched for “30 days” on this entire post the only one talking about 30 in regards to VIP point balances or cash out is you. What are you going on about?
If you are going to look at an immediate cash out scenario you would use 90 days. Or use a hybrid growth strategy with cash out some time in the future. Use the SEARCH function on the top right and you’ll see multiple scenarios I posted with the math function you can put & paste into Excel or your Windows/MAC calculator.
What to you mean why would anyone do 30 days retirement ?it’s not a option..lol !!
They can just change ” purchase bids ” to “trash can ” as long as I gain the daily % on it I don’t care.
Jimmy, I know far more than you presume, be very careful here as I have asked many leading questions. It is clear you know nothing about the definitions of investment and earned income. Better figure that one out before you put your foot in it again.
You clearly do not understand the point retirement system nor have you actually analyzed it.
You have no idea what the income streams of ZR are and have virtually no information about what they may generate. I was specific in the info I needed from you and all I get here is lip.
That you have “hundreds” of posts means you are spreading misinformation and ignorance among the multitudes, so even if you are correct you have virtually no credibility.
So wise man start with #1. Give me a definition that would explain to the average cat the difference between earned income and investment. Define the difference between accumulation and IR. Answer those two legitimately and we will go on to the next part by the way give me the other info I asked for since you are so all knowing.
I am near having to say this conversation is simply a place for you to spout. Maybe you can build some credibility back in here so that if your concerns are correct and legitimate someone could use it to assist them in making an educated choice
I think we can all agree that the missing numbers are a problem. And please, who is to blame for that?
Zeek Rewards won’t release the make up of the profit share because it gives the game away. How the hell are percentage numbers (retail stores contribute x%, zeekler auctions contribute y% etc.) in the profit share competitive secrets?
How they are run and how much money they make might be, sure, but the % of each in the daily ROI is just harmless transparency. Well, harmless if you’re not running a Ponzi.
The answer is they aren’t and anything that isn’t affiliate investments and membership fees is such a small % of the daily ROIs that it’s negligible.
We already know all the retail stuff is useless because… come now, a lot of you are ZR members. Ever even used the retail stores or made any money off them? Didn’t think so. FSC failed and had to be absorbed into ZR… if it was making any money Burks would have just stuck with it, but it wasn’t. Replicated retail stores don’t make money.
Did anyone notice any blips in the daily ROIs paid out when zeekler was up and down like a yoyo over the last few weeks?
@BenjaminFrom memory you were the guy that was going on and on about social security. Keep the discussion on topic.
Come on son. That’s like saying someone who goes to a bank to invest isn’t really investing, they’re just leaving their house in a car and therefore aren’t investing.
The end result of investing money in VIP bids is a 90 day ROI. Whatever happens in the middle is irrelevant filler.
If you don’t invest that money, you don’t get a ROI – period. Meanwhile Zeek can change posting ads to patting your head and giving bids away to customers to rubbing your belly and you’ll still get a ROI.
Can’t change that initial investment of money though, as that’s truly what’s important – thus making all ZR members investors.
Earned income is paid out to you, an investment is something you pay.
(seriously, we’re going to have this conversation now?)
*plays violin*
And what about your presumptions? I’m still waiting for you to point to my glaring inaccuracies. I won’t hold my breath.
I know what you’re trying to do. You’re trying to get me to say that earned income is money you earn for doing something active. The problem with the Zeek model is the act of placing an ad is just a useless task with close to zero value. Why not just make affiliate do jumping jacks for their daily profit share? It’s the same practical effect as spamming free classified sites.
I’m getting tired of your badgering with no substantive information. If you’re such an insider or a long-time affiliate with 6 figure point balance and upset that others know about the ponzi scam, you won’t win any supporters here.
I never said anything about social security it wont be there for me anyway. so i guess you could call me a social security investor. On another note maybe zeek wont be there in the future either who is to say.
I have seen many companies come and go look at gold man sacs and enron and even the housing market. all are gone or changed. even zeekrewards has changed since I started but hey at least they are changing with the times and maybe who knows this may be the next big thing.
At least I think in this day and age its nice to have something to look forward to. Everyone knows that #s can be manipulated so does it really matter all that much. No it really does not. In the real world is your job a gaurantee, are you gauranteed a good income after you have spent thousands on an education.
i think you all know the answer. But hey I am doing really good with zeek rewards at this time. But I do enjoy reading all of your posts. It kind of makes me smile to think of all the people still looking for something.
All the fluff talk is very well if you’re operating a genuine business, if it’s fundamentally flawed from the beginning (the sustainability problems a Ponzi scheme brings with it), then it’s not just a matter of businesses coming and going now is it.
This is just another variation of the ‘risk argument’. There is risk in all business ventures sure, but that risk shouldn’t be punting when to pull out because of an inevitable sustainability collapse.
We’re discussing income sources blahblahblah, fundamentally with ever-increasing bid balances, Zeek Rewards cannot infinitely generate revenue to keep up. Business wise that’s not a risk, it’s a certainty. The risk is playing the game before it collapses.
And that’s a different kind of risk then what is usually equated to running a business.
And there we go. The good ol ‘I’m making money, so it’s legit’ reasoning.
And now what, further rationalisation by reducing critics of the Ponzi scheme business model to people who are still looking for something?
Next I suppose you’ll be telling us that we ‘just don’t get it’.
Oz, if that is your definition of earned income and investment it explains the entire perception you hold. Take a little time, check with your CPA or some wise man like Jimmy and explore what earned income is by definition and law.
It will help you to realize the difference between Jimmy’s ideas and the actual structure of ZR. I am with you though, I would love to have the numbers to look at and analyze.
Jimmy, I expected exactly that response from you. You have no verifiable information about the internal structure of ZR.
The math you do on the VIP bids proves a glaring ignorance of the entire VIP and Point retirement program
Instead of providing me with pertinent information you simply mouth off which is typical when ignorance is challenged.
You maintain a glaring inaccuracy in your description and function of the VIP and Point retirement system. Your math there is absolute trash and your “investment” as you use the term is way out of line.
Not going to cut it. This is your tangent, not mine:: provide another definition, explain how the ones provided to you are wrong or stop wasting my time.
Oz your name fits. But I respect your opinion although its worth about as much as mine. Without being given a complete break down of the #s from zeek I dont have an argument for you and at the same time you also have no argument.
All I can say is that I do not see any proof that zeek is a ponzi but if it is we will probably find out in the near future because with companies who grow this fast I am sure they will be investigated. But hey at least they are based in the US.
The facts as they stand are you invest $x and get a daily return over 90 days. The business model, as far as participation in the MLM side of things goes, is to re-invest your returns enough so that your invested amount provides a return greater then the amount initially invested over 90 days.
Everything else is irrelevant. Call it whatever you want, add any number of steps to the process but the above synopsis remains the core of the Zeek Rewards MLM opportunity.
I don’t need an argument, an answer to the following simple question will suffice:
How can Zeek Rewards pay out viable ROIs on ever growing VIP point balances?
The term viable is in reference to sustaining growth over a 90 day period in the daily ROI paid out.
Answer me that and then tell me it’s not just a ponzi scheme.
I have noticed that my responses are being ignored… Clearly, nobody can answer WHY would ZeekRewards exist if Zeekler is generating tons of profit…
Oz … just give it a little thought and quit playing follow the leader.
I put 10k into a house and hold it for more than a year and when I sell it is worth 10k more than I have in it. Passive investment, not earned income.
I buy 10k worth of bids and do nothing. 90 days, bids retire return on money zero. I purchased a perishable product.
I buy 10k worth of bids, I post my ads and use my bids to promote zeekler I earn 1.5% or 150 dollars per day. I do not repurchase and in 90 days 10k gone and I have earned $3,500 for my efforts and using my money to promote zeekler.
Earned income by legal definition
I can certainly go on but there is clearly no desire to learn anything here, simply express opinion based in a lack of true knowledge.
The house doesn’t guarantee a 90 day ROI. Fail.
And Zeek Rewards guarantee you a 90 day ROI on your 10k, making it an investment.
Why are you trying to compare apples and oranges?
Um, you do know that a ROI is a source of earned income right? Fail again.
Sorry guy, ROI can be an earned income or short term capital gain if you roll it within the first year indicating that you are having to work the investment to gain your growth. IRS says so not me.
The house does not guarantee a 90 day ROI and entails the possibility of failure or no growth. ZeekRewards does not guarantee the amount you will share in the profit pool and also possess the risk of failure. ZR is beyond clear about that.
Do you actually understand how sharing in a profit pool works? There actually has to be profit to share and if there isn’t the VIP Bids are going to retire without any profits for your efforts? Where are you getting guarantee out of that?
You sound like you know some about investing, go study your various types of income. Re-read your ZR stuff and see what happens if you put buy even $10 worth of VIP bids and then sit on your thumbs and do nothing … can’t earn without efforts … earned income.
I will answer your question to the best of my ability.
It explained on the website that they pool all of the profits from subscription sales, bid sales including the bids purchased by affiliates, sales of the FSC store, and purchases made from people wining the auction above cost.
keep in mind affiliates are customers also so our bid purchases are revenue.
also keep in mind that (for example I have 20000 points not dollars)
Now today I earn 400 dollars that I could cash out but instead I use that money to purchase 400 bids.
did the company loose money no did they gain no but did a few customers that i gave those bids to purchase more bids or win a product maybe. which equals more profit.
Now with that said I know some people who cash out about a 100 of the 400 which means that the company lost 100 dollars profit and there are others that collect more.
So it stands to reason that if everyone cashed out 100% of the cash award in one day the company just like any other company would feel pain or crash.
With that said I am sure they look at the total payout for the day before they determin the daily award because that day is the only cash they are accountable to us to pay out
truth is if they have no money to pay out then the daily payout would be zero.
and theres your risk but far from ponzi
Sorry I’m still laughing On Jimmy’s comment ” why would anyone do a 30 day retirement. ? . And looking at VIP point balance as cash 😀
Oz there is no gauranteed ROI I think that is where you are confused. At one time there was 1.25 but not since 2011. although it has been averaging 1.5 over a month. Some days are .87 while others are as high as 2.09
“The law” will usually check the true nature of something. In ZR the
incomeROI is not generated by the work you do, but by the bids you haveboughtinvested in.There is a much closer relation there between money invested and ROI generated, than between work done and income earned.
One person buying 10 times more bids than another will earn 10 times more ROI, while the work done is close to equal.
Usually I don’t read laws, because I know how misleading they can be if you don’t see the whole picture. The judiciary system is based on principles rather than laws as a foundation.
People who are focusing on a law will very often be misled. One example are those who believes organized cash gifting is legal, since tax laws allows cash gifting. They have missed the central fact that tax laws mostly are about how to tax something.
Another example is people reading pyramid laws, and believe “recruitment” is “personal recruitment” – and that spillover will make a matrix legal.
@Justlooking
What’s there to be sorry for, you just agreed with me. I accept your apology.
Agreed, so let’s not waste time discussing it.
Nobody said they did, they guarantee a return. Even if that return is 0, it’s still a 90 day ROI guarantee.
Yep. Do you?
No thanks, we’re discussing ZR so lets keep it on topic. You can discuss other investments or types of income elsewhere.
Like I said,
The above synopsis being you invest $x and Zeek pay you a 90 day ROI.
Despite the lack of evidence prooving any of that, I’ll accept it for the moment.
That said, VIP bid balances grow infinitely, whereas none of the revenue sources you stated do. So where is the money going to come from to continually ensure people are making enough to re-invest and keep their point balances growing (or at the worst breaking even with enough to withdraw)?
The ultimate goal with ZR is to withdraw money and re-invest to keep your bid balance going, let’s not kid around. This is infinite growth over the long-term, as any compounding investment is without any restrictions.
Customer purchases cannot cover this growth indefinitely. Neither can any other revenue source.
No, no they wouldn’t because they actually rely on sales and commissions aren’t tied into how much you have invested into the company (whether it’s real money or virtual currency is irrelevant).
See the difference and why Ponzi schemes are illegal?
And what happens when the payout isn’t enough to ensure growth over a 90-day rolling period at the top end of VIP point balances? What then?
What???
You’re taking money in from members and redistributing it as returns over 90 days… and the more you re-invest the more you earn (whether they pay you out the money or it happens automatically is again, irrelevant).
That’s textbook Ponzi right there.
@Ben
Hell yeah there is, it’s a guaranteed return over 90 days. How much isn’t guaranteed though but it’s a 90 day ROI guarantee nonetheless.
Keep in mind returns do not have to sustain VIP point balances, nor do they have to be positive. Well, they do if you want your ponzi scheme to attract new investors but that’s a seperate issue.
Don’t you find it revealing how there is no stated guarantee on the return over 90 days, yet every discussion you find anywhere on the internet, including the ones that have survived the Zeek Squad, use illustrations looking at compounded growth using a 1.5% daily profit share?
“Nothing is guaranteed, this is not an investment” *wink* *wink*, meanwhile everyone who enters Zeek as an affiliate analyzes their potential return over time using using historical averages.
The day Zeek’s profit share drops to 1.3% or so the dam will collapse. Who cares about break even, Zeek and its affiliate community has setup a defacto expectation of about 1.5% average. Violate that expectation and people start withdrawing more rapidly.
I had a hard time going with you on the last 2 comments. But it sounds like you want it to be a ponzi so thats what it will be for you.
I really dont beleive it is but I just dont have the facts to show you which seems to be the same with other MLMs that I have been involved with.
I do think that you can agree though that if everyone pulled thier money out of any company it would crash or have to sell of to pay everyone or the price per share would drop. I only add this as an example not a comparison.
Or maybe I can quote a famous president by saying its fuzzy math.
Oh come on Jimmy everyone uses historical data. Now your reaching.
Hey thanks for the information. I hope Zeek posts more info in the future so i can add more to your discussion
@Ben
That’s not going to cut it either, it is what it is. There’s no ‘sounds like’ or ‘want it to be’, I have no attahment to ZR or any other MLM company, I’m merely looking at the business model.
And given what I’ve asked you and our discussion, what basis is that belief on? Blind faith?
Sure as hell sounds like it.
The difference between Ponzi schemes and MLM companies are that in MLM companies people don’t have money invested in the company. They have business costs sure, but the amount they earn is not dependent on the amount they invest and continue to re-invest, as is the case with ZR.
Yes you can mention free members here but the fact is they still re-invest their earnings (actual money) back into the scheme to continue to grow their initial investment and attract larger returns.
Yes and what happens then? You cannot answer me how any of the listed revenue streams you provided can continue to indefinitely support the infinitely growing ROIs needed to sustain ever-growing VIP point balances.
Jimmy’s point is ‘why are they using it’. The answer? To convince people that the ROI is sustainable and relatively fixed, despite it officially being variable.
Now why would they want to do that? Y’know… given that ZR isn’t an investment scheme and all that :rolleyes:.
sure i can answer you when you stop throwing the word investment around. Its called buying bids and that is the revenue stream and zeeklrewards has made it very clear we do not invest our money we buy bids to give away as samples.
One thing you keep forgeting is I dont have to give those bids away i could choose to use them myself at the auction. So loose the word invest Because I do not own shares in the company I simply purchase a product called bids.
Acually if you are looking for investments look at the stock market but do not look to zeekrewards because they are not looking for investors.
Do you deny that if I invest $x in VIP bids give the bids away, spam the internet daily, put lemon juice in my car, go for a run around the block and brush my teeth four times a day that ZR do not guarantee a 90 day ROI?
Purchases don’t generate ROIs, investments do.
Doesn’t matter what they say, all that matters is how their business model works. See above.
But you do if you want a ROI. What you can and can’t do in addition to using ZR as an investment scheme is irrelevant, if it’s possible to treat ZR as an investment scheme then it is. Period.
Nobody said you owned shares in the company, your investment is in the virtual currency ZR have created called ‘VIP bid points’.
Thank You, this is good conversation! I understand the law will check the nature and there we have an issue to observe with ZR.
It is certainly not insurmountable and while the courts have been all over the place on this matter they have decided in favor of both sides so neither of us really knows.
It will be interesting to see where this one lands and how ZR’s attorneys deal with it or if they can.
I understand your concerns now and they make some sense. There are two possibilities here so it is an educated risk and people can make an educated decision on this part of the matter for themselves now. Thank you.
By the way, my attorneys always tell me if you are looking for justice in the law you are looking in the wrong place.
Now lets take a true look at the panic over the VIP Bids and the Ponzi issue.
The panic seems to be that there is a massive accumulation of VIP bids that the company owes you at some given point.
It is thought that those points will outstrip the companies ability to pay making them dependent on signing people up or buying bids rather than sales.
Actually we need more information to determine this but the numbers are not as massive as they first appear. VIP points may not be cashed out and payout is based only on company profits. No profits no payout.
There is no liability to the company to do anything but “profit share” based on the number of points you hold and use for advertisement.
One is only permitted to withdraw the growth of those points and in 90 days they disappear, no more liability to the company, no more income for you on those points.
It seems to be the perception that the 10,000 becomes near 30,000 as a lump sum. This is not true.
If you buy 10,000 bids and do not repurchase bids along the way, assuming you do your work, you could earn an average of 1.5% per day. In 90 days you would earn $13,500 and retire $10,000 worth of bids leaving you a net of $3,500 for your efforts.
What the uninformed are calling compounding is in fact the purchase of more product. If you take the $150 you earned and repurchase bids that day, those bids retire 90 days from the date of that purchase and have virtually no effect on the amount of the 10,000 bids set to retire. These 150 will retire the day after. These can then be seen not as compounding but rather a separate purchase earning the mythical 1.5%.
If you quit doing your job at any time, the points will continue to retire in their predetermined 90 day period without the additional profit.
The VIP bids themselves are nothing more than a measure to determine what portion of the profit share you may earn based on the size of your advertising efforts.
If, for the 90 days you repurchase your 150 each day, each day you will earn more based on each set of purchases added together giving it the appearance of compounding and outlandish numbers for the company. However, you may not “cash out” VIP bids. You may only keep the amount of money that it earns on any given day. This limits the liability to the company to that income that is in the pool from all income sources.
If you quit working after your 90 days including repurchase through out you will have just shy of $40k, retire 10k bids and net 30k in bits. WOW!! But wait … if you begin drawing out your money, about $450 per day, you will find an interesting situation.
The first 150 will retire the second day of your retirement causing a compound reduction in your daily payout. As you did not repurchase your 30k bids dropped down by the 150 that retired the day before to 29850.
Day 3 your 1.5 payout will be less, but, your next set of bids retiring bids will be larger than the first due to the slightly larger repurchase 90 days earlier. This will continue until your 30k bids as well as your earnings become 0.
Another argument for the earned income theory. I have not done the spread sheet to see how fast this will disappear but it looks like it will go rapidly.
All of this is based on a “profit pool” from all sources of income so what you will find is it is impossible for the company itself to go upside down due to the payout system.
I would like to know what the income numbers are from all sources so that it can be looked at from a saturation stand point or if it will drop to 1/8 percent a day at some point. (I am fairly certain it will)
When you research the very design of the Bid system set up it is actually quite ingenious and secures the company while providing opportunity for affiliates so long as the actual income is legitimate.
Liability is limited to the profit share so if the company must reduce the amount paid daily to meet its obligations it in no manner effects the term of the point retirement.
Net thought here is that the company is only liable for the cash flow it can afford through the profit pool. The massive numbers are then only subject to some percentage of cash flow from the pool. Right now that seems to average 1.5% How does this then create the liability of a Ponzi.
Have you seen any of the Zeek ads, terms, corporate marketing, or any affiliate advertising or YouTube videos prior to Jan 2012? It was sold as an investment with the words “compound interest” plastered everywhere. So all of a sudden affiliates are asked to stop use that word, but the business model hasn’t changed. Or how about prior to Aug 2011 before they added the expiring bids and just had a fixed 125% ROI? All Zeek has done is made the daily profit share variable dynamic so as to mask the investment behind virtual points.
Why would an affiliate buy bids from their daily profit share to USE THEM in the auction? They can create a customer Zeekler account and take advantage of the BOGO offer (get 2x the bids) and 20% commission, and matching VIP points. Woo Hoo, profits galore!
Would you rather spend $500 in daily profit share on 500 bids that you use in the auction, or use the Zeekler.com customer account and get 1000 bids, $100 commission (20%) instantly withdrawable, and 500 VIP points to boot?
In fact, a little secret that many affiliates don’t know but the top earners with over 300k in points have maximized this technique. If you watch the auctions, there are a few who will spend 4000+ bids to win a $100 gift card. They don’t care about the bids because they used them to re-up virtual points and maximize their VIP points.
there you go again with ROI or return on investment check the site and see if you find ROI anywhere and then we will talk again
I cant speek for prior dec 2011. but they have consulted with the right individuals and found out what they were doing wrong and changed the marketing model.
they have also began implementing compliance training and told everyone that if they are found putting out false information they will be terminated.
they have also hired a team to find these individuals making claims or gaurantees.
Playing word games with banking terms such as “investment” and “compound interest” doesn’t change the fact that it is exactly that.
If I shoot someone and call it “a kinetic attack” it doesn’t change the fact that I shot someone.
But don’t take my word for it, search Google’s index archives. You’ll see plenty of references to “compound” on Zeek’s own domains, including its own terms and conditions.
Thankyou justlooking That was a very good explanation and easily understood. I came on here today to learn something and finally did.
@Justlooking
I’m going to go ahead and apoloise in advance if I came across as blunt in any of my replies, but please understand that we have roughly the same conversation over and over again everytime someone new to BehindMLM who’s swallowed the company PR decides to join the conversation here with the same arguments and points that have been torn down many times before.
You can see the same example unfolding above with Ben. That conversation has pretty much gotten to the point where he refuses to address a simple question put forth to him and instead said he believes it’s not a ponzi (based on nothing more than the fact he’s getting money).
I note that you mention that law alot, and that’s fair enough but there’s a distinction to be made here. My interest is in the business model and how it works. The law is a seperate issue for me as I’m now law enforcement.
As far as I’m concerned if the authorities fail to act altogether on ZR or it takes one year or five years it doesn’t matter to me, that doesn’t change the business model. That model is the basis of analysis and the discussion here. Yes we do talk about legality but that’s only because history has dictated that Ponzi schemes are illegal in the US.
ZR is not some new revolutionary model, it’s just a straight up investment Ponzi and on that basis alone logic would dictate that as it grows, the chance of the authorities increases.
No. You canoot withdraw your bids (or points, which is what I assume you meant), only the ROI they generate.
The problem is this return has to be sufficient enough to ensure growth to the overall point balance over a rolling 90 day period. As the point balance grows, so does this return.
Theoretically, this growth is infinite and there is no revenue source in ZR that can cover this infinite growth.
Sorry what? 1.5% of what? Since when do we talk about earnings in percentages?
You mean a 1.5% daily return on your initial $10,000 investment.
You are talking about loss/gain. Yes, your net gain is $3,500 but your ROI is $13,500.
You go ahead and try telling the IRS you only made $3,500 and let us know when they come knocking for an audit. As for non-US members, regardless of whether the IRS is involved or not, the ROI is still $13,500.
You put in $10,000 and ZR paid you a ROI of $13,500 over 90 days. That’s what happened, dress it up however you like and add whatever tasks ZR make you do to the equation – it’s still an investment and they still pay you a 90 day ROI.
Replace bids with ‘you’re buying advertising’ and it’s no different to the dozens of shady other Ponzi schemes out there. The core equation remains the same: invest $x and receive a ROI over a set period of time.
Again, add whatever you want to the above as it doesn’t change the core equation of the business model.
@Benjamin
done a lot of things, but consistently have not changed the core equation of the business model.
Invest $x and earn a ROI over 90 days (initially this ROI was guaranteed at 125%).
Add whatever you want to the above equation, compliance, more useless tasks and steps whatever, the core of the equation has remained the same.
well i cant comment on law enforcement except thanks for your service and I hope your opinion is wrong.
Except that it’s not opinion, it’s fact.
You invest $x and Zeek Rewards pay you out a 90 day ROI.
No amount of your hope changes that.
Wrong!
You are talking about loss/gain. Yes, your net gain is $3,500 but your ROI is $13,500.
You are crossing gross and net here and even the IRS isn’t going to call it as you say. While you will get 1099 on $13,500 you will also get deductions of $10,000 as business expense. You are not near right on this one.
You seem unable to view this from a pure business stand point. I earn money for my business by purchasing advertising sample to give away for my business. Any marketer will do this and it is done every day.
If I follow your line of thinking then when Nabisco advertises oreoes by hiring an ad agency then the ad agency is investing in Nabisco … no way that works.
The ad agency may buy cookies in bulk to produce business for Nabisco for a share of the profit and there are in fact ad companies that will do that based on how much they can increase the profits of a given company.
This is no different. I know you have many conversations but if you do not study information as it comes to you then the conversation becomes circular.
What do you understand about corporate structures. It would be important here.
The ROI is seperate to the amount you invested. Combining the two gives you a net loss/gain.
As far as the IRS are concerned, your total daily ROI is still a return and still reportable income. Regardless of whether you re-invested it or cashed out.
This isn’t for up for debate, this has been covered previously. You can try and report $3,500 to the IRS as your total reportable income but it’s wrong and you most likely will be audited as ZR have sent in a differing 1099. Your ROI and reportable income is $13,500.
ZR guarantee you a 90-day ROI, unless “your business” does the same comparison is irrelevant.
Neither the ad agency or Nabisco guarantee the other a 90 day ROI based on money invested by either company. Fail.
Share of the profit in what? They’ve bought the cookies, so what further financial obligation does Nabisco have to the advertising agency? (this is where your comparison to ZR and business that don’t offer investment returns falls apart every time).
Is the money being paid out a percentage of the profits, or in any way tied into how much product the advertising company initially purchased from the company? No.
Furthermore the advertising agency cannot re-invest this profit to increase their profit over a rolling 90 day period.
Why? Because no amount of product sales the advertising agency generates can cover infinite growth, which would then effectively be investment into the company. That’s why this arrangement doesn’t exist anywhere in regular business.
Once again, comparison fail.
Irrelevant, we’re not talking about corporate structures, we’re talking about ZR. You’re free to discuss corporate structures in general elsewhere.
It’s you Benjamin and JustLooking who’s going around in circles.
The question is very simple: is Zeekler generating a profit?
The correct answer: we don’t know, but it seems to be, as it is paying out money to ZeekRewards members.
Next question: what does Zeekler get out of ZeekRewards?
The correct answer: monthly fees, and ads posted by ZR members elsewhere.
Agree so far?
Now, consider this: assuming Zeekler is making oodles of money, why have ZeekRewards and pay out oodles of bucks on whatever you call it: profit sharing or investment ROI. You guys are arguing over semantics, let’s just say it out loud: Zeekler is Paying ZeekRewards oodles of money.
WHY?
Clearly Zeekler don’t care about the membership fees if it’s making oodles of money on auctions. As for the ads, that’s worth very little. It could be contracted out to some third-world country for pennies per ad posted.
So why have ZeekRewards at all?
So far, nobody has bothered to answered THAT question.
I don’t actually care if it is up for debate, you are incorrect.
This has been my profession for years. As an income produced by purchasing some form of tool or product the cost of that tool or product is absolutely deductible.
As far as Return on Investment or the ROI you seem to love so much, it is the return on investment and does not include the principle invested. If it was as you seem to think your ROI would be over 100% Misinformed assumption at best.
Your entire ROI argument falls deep into the dumpster for anyone in the financial field … sorry don’t care how well you think you took care of that one.
This is the second time I have told you, ZR does NOT guarantee any return on investment. Either produce where it says that or give it up. Again you are wrong but won’t research it enough to let it go.
If the ad agency uses the cookies it purchased to promote Nabisco and has made a deal with them that through the promotion, rather than get paid up front, they could share in the increased profits how does that make the ad agency an investor in Nabisco?
Corps. are not irrelevant here at all. You simply wish to ignore what you do not understand about the structure of Zeekler, ZeekRewards, Online Store etc. I thought we were having a better discussion than this.
???
ZR themselves have stated the 1099s they sent to the IRS count all returns paid out to members, whether they re-invested the returns or not.
Nobody said it wasn’t deductible, but all these tax returns filed by ZR with abnormally high “business expenses” are going to most likely result in mass audits… which in turn will likely prompt an investigation.
Invest $10,000 and ZR pay you out $13,500 (hypothetical figure which you introduced into the conversation).
That’s a greater than 100% return.
Honestly for someone who claims this is their profession I feel like I’m having to explain absolute basics here. The core of the ZR business model relies on the ROI being greater than 100% over a rolling 90 day period.
If it’s lower than 100% nobody would join and invest now would they. When you consider 80/20 rules and what not, the threshold increases over 100% before things become unsustainable.
And I’ll repeat, they guarantee a 90 day ROI. Each and every day if you carry out their pointless tasks they will pay out a daily ROI over 90 days. Guaranteed.
Whether that return can sustain your bid balance, or is negative or positive is irrelevant, it’s a guaranteed 90 day ROI which is the issue here.
In your example, Nabisco do not base this share on a rolling 90 day period by converting the money paid by the advertising agency into an expirable virtual currency.
Again, comparison fail.
any tangents that aren’t directly related to Zeek Rewards, so don’t waste my time.
Let me tell you about talking to a rank armature here bud. Your return is not more than 100% it is in this instance about thirty five percent.
ZR does 1099 you on your gross income like any and all commission pay businesses. Like all commission pay businesses you don’t count what it cost you to create the commissions and thus pay no tax on the recapture of principle. Ignorance abounds so greatly that even the IRS knows this and yet you still pitch insults.
Any idiot that would tell you to calculate in the principle needs to go back to 101. How do in the world do you call recapture of principle return on investment, it is the investment! and it doesn’t apply here. You got this all squirreled around. Trouble is you make people think you know what the hell you are talking about.
Alright, it is clear you do not even want to find out if you are correct or not, you simply want to spew your view. ZR expressly states in all of its disclosure that there is NO GUARANTEE of income and you are NOT INVESTING in the companies.
It certainly could be that Nabisco set up a 90 day contract and the ad agency would share in that increased profit for that time frame.
I think I will end here as you seem entirely unwilling to find the facts to back your arguments. I am sorry that people listen to this crap because they will not check either.
Thanks for your time. You have done more to convince me of the viability of ZR than to turn me away. Remember dude, a closed mind is like a closed parachute … useless until opened.
Justlooking is just arguing over minor details. Oz calculates ROI based on cash flow where break even is 100%, and JustLooking is using cost basis where break-even is 0%. JustLooking divides $3500 (the gross profit) by the initial investment of $10k to get 35% while Oz calculates the entire $13500 paid out by Zeek over 90-day.
Why don’t we just call it arithmetic return and be done with it? Zeek prior to Aug 2011 was advertising 125% ROI, meaning 25% arithmetic return over 90 days (invest $10k and have available $12,500 in 90 days). So Zeek was using the same cash flow formula for ROI that Oz is now.
The bottom line is it’s useless to argue semantics when the reality is, where is the revenue coming from?
Also note that very few people go straight 100% cash out anyways, so it’s a bit of a moot point. Practically all affiliates compound interest for some period of time and then cash out later.
If you are so skeptical to think that ZR won’t last much beyond 90 days (therefore necessitating a 100% cash out strategy from day 1), you won’t invest in the first place.
Most affiliates have an understanding that this is a ponzi and they are just making an educated gamble. Most will compound for the first 1-2 months at least.
Seriously? Wank wank wank.
You invest $10,000, you get $13,500. ROI = 135%.
End of story.
I am glad to see that you’re finally using terminology such as returns and investment… this discussion is so much easier when we just call things what they are instead of playing silly word games.
Because the entire 135% ROI is your income. Not just 35% of it.
And round and round we go. Third time now I think: ZR guarantee a 90 day ROI, nobody said anything about income. Given you can’t get a ROI without an investment, you are investing with the company, not in it. That’s what the whole VIP point virtual currency thing is.
That very well may be, but Nabisco (or any other company) don’t allow the ad agency to daily use profits paid to them to increase their share of the profit.
Also if you’re going to limit the contract to 90 days, then comparing it to ZR is useless, seeing as they run an infinite rolling 90 day period.
Cheers, here’s a tissue and thanks for participating.
No worries, and here’s something for you to remember:
A Ponzi scheme is always a Ponzi scheme, no matter how you dress it up or what terminology you use.
All this could be avoided if Zeek was more transparent.
Daily profit in US$ from zeekler
Daily total of paying affiliates
Could they add up the total number of outstanding VIP points?
That way you could calculate if they can afford to payout
VIP points sure seem like a stock to me, seeing as the more you have the bigger your return is. Therefore its an investment…..right?
If zeekler is so profitable, why would zeek rewards want so many people to share the money with? Are they that generous?
Too many questions to answer for me to give them a dime. But its fun to watch and see what happens.
@gen3benz,
Also: if Zeekler is so profitable, how come they only had 11 full time employees? The characterization from affiliates is this is a 14 year old company with rock solid history of success and profitability. That may all be true, but the size and scale of the daily profit sure being paid out sure doesn’t fit the picture that is painted of a small company with 11 employees.
The one profile this does fit is that of an investment ponzi that runs on thin margins because it takes money from new investors to pay off old investors. The perception being implied is “lots of profit, lots of growth”. But with the portrayal comes the expectation of lots of employees to manage the growth.
What Zeek wants us to believe (lots of profit, lots of growth, lots of revenue, after all 50% is kept by the company and 50% paid out) doesn’t fit the reality of quantitative indicators such as number of employees.
In other words, number of employees, i.e. payroll size, is a good indicator of potential legitimacy.
Clearly, there’s a deliberate attempt to IGNORE the most important question: why have ZeekRewards at all?
The question is ignored because the answer is obvious:
ZeekRewards is there because the company would rather share their daily revenues (which must be in the millions in order to support the return on all the points) than pay minimum wages to a bunch of untrained people in 3rd world countries to spam the classified ad sites.
Also, it’s there in order to inflate bid points, in order to make penny auctions even less appealing to actually customers. No use spending $1 a bid if you actually stand a chance of winning something.
@Justlooking
I have seen lots of different methods where people tries to bend the rules, to make something illegal become legal. ZR seems to be one of them.
“THE TRUE NATURE OF SOMETHING”
“Bids” and “VIP Points” are more like virtual currencies than products, valid only within a specific “system”, and designed to store a value that can be exchanged with an ordinary currency (USD). They have no real use as “products”, and their real and only use are as virtual currencies.
You can decide for yourself the true nature in WHY people join ZR, whether they do it for the investment opportunity or for “buying bids”.
I made a short analysis of the true nature of revenue in a post here, where I separated the virtual parts of revenue/expenses from the real ones. I did the same thing with the difference between “being paid for work done” and “getting ROI on an investment”.
There are lots of areas where people can decide for themselves the true nature of this program, like whether they drive retail customers to the auctions to generate real revenue or drive investors to the investment opportunity to generate more investments.
People should also be able to discover the true nature of the so called “additional income streams” Zeek claims to have – like the “FSC stores”. Most people tries to avoid this topic, but “Lynette” admitted she never had sold anything in January. The true nature of these stores seems to be pretty insignificant as “income streams”?
This website will usually be focusing on the true nature of business models reviewed rather than laws in individual countries. The use of expressions like “Ponzi scheme”, “pyramid scheme” and other expressions are meant to be interpreted within that specific context – as “common expressions” rather than “juridical terms”.
Oz I have to agree with justlooking it seems that you are stuck on the point you are trying to make and I stress trying and you have atleast a couple of followers.
Its not to say that your points are invaluable I just think that you need to investigate further or begin a new topic. This seems to have gone from a debate to a one sided opinion. Opinion being we and you have no hard facts. I understand your view of the company but without more information I do not think that you can definitively say that a ponzi exists within zeekrewards.
I think that if you look back you will see throughout all of your post your mind was made up the day you began so it stands to reason that you are using your blog to drive your agenda instead of having an honest debate over facts and not just opinions.
In the end it may be found that you are correct although at this time I have not seen or been given any proof of this but I do know that misrepresentaion either pro or con is illegal and all individuals can be held accountable.
You should especially know this with your law enforcement back ground.
Using this logic you wouldn’t be able to perform any analysis of any ponzi (“umm… we have no evidence of anything because the company hides it all”). You don’t have to know how climate science works to predict it will rain (just look up).
Similarly, it is simple enough to look at a company’s business model and ask “where is the revenue coming from?” We’re not talking about a needle in the haystack here – if there is real revenue from non-affiliates it should be obvious as day (or rain falling from the sky, to use my previous analogy).
To sustain the daily profit share, there has to be lots of revenue. That revenue either comes from affiliates investing (a ponzi), or from some external revenue source (not affiliates).
@Ben
That son is a cop out. If you can’t argue that Zeek isn’t a Ponzi that’s not my problem.
You invest $x and ZR pay out a ROI over 90 days. Please refute that.
Also explain how any of the revenue streams you have previously mentioned can cover the infinite growth required to sustain the ROIs needed to keep ever-growing VIP point balances increasing.
Anything else from you is just waffle and will be treated as such. I’m not interested in excuses.
10,000 $ gives you 10,000 VIP points that so you can collect the daily % for 90 days . After 90 days it drops . The retirement is a holding cell for you to collect on the % amount daily . Why do some people not grasp this ?
If you go in fresh and buy 10,000 bids , they take .35 on a dollar right away = 3500 and you can’t draw any funds until after 90 days .
Are you saying that zeekler can’t turn 3500.00 over a 90 day period to make some serious cash ? And that’s at the least what if they were taking the full 10,000 on a 90 day span ?? .. Lol
Lol . Put 3500.00 dollars on a auction every day for 90 days and see how much you end up with . Thats why they have this program in place going on for over 1 yr.
I have a friend that takes out blocks of 8,000 here and there , he came in with 10,000 , 8 months ago . He made his money back and alot more
Here is some information for you to review and understand why it is difficult for an affiliate to argue or debate certain topics. Truth is giving false information can lead to termination or legal action and its just not worth taking the chance.
Where you are allowed to make claims We are not unless we have provided you an income disclosure statement and even then we are limited I would suggest that you contact Dawn, Paul Burks, or zeek admin to have your questions answered.
I have already forwarded your information to them so Maybe they will contact you and put your mind at ease.
I don’t understand why people bash zeekrewards when they are curenty a member . Time will tell . Zeek could possibly be here for awile . Who knows .
Look at home depot when they set empty boxes in the shelves and had people park in the parking lot so people would think they are busy . Now they are the #1 home improvement . People are always trying to bash a good thing .
I was looking at posts from a year ago and people were bashing Zeek then . Give it a rest and move on . Zeek is worldwide . If it turns out a ponzi , it would be the biggest ponzi in the world . So don’t hold your breath .
Heh . This Discussion sure got quiet 😡
Thats just it JtotheT they are not Zeek affiliates because if they were they would not be making false claims of payout and using words like invest or ROI. If they are affiliates they need to be very careful because they could be terminated from the program because zeek is very strict about this.
Just look at the many replicated websites they are now shut down and the ones that are still up are being searched for by the zeek compliance squad.
Some are if you look from the beginning , claiming they are going to pull out . Also there are other bidding sites that are doing the same program similar to Zeek , example bidify.com .
Who knows these bashers could be affiliates . Zeek might have created a new trend . The Internet is just a world in itself .
Not everyone has oodles of free time to spend during the day to answer the same illogical discussion point over and over. Not everyone resides in the US and responds during the time of day you may be expecting.
What would it take to prove to you that many who read this, and many who reply with comments, are indeed Zeek affiliates? Would it even make a difference if I or anyone else check flashed you showing what we made?
Have you even read the hundreds of comments I have posted here to see what deep insight I have (or maybe do not have) into the program? Have you read any of my comments on bid inflation and VIP point stacking that neither of you have even addressed yet.
You’re just make generalizations and accusing others of not considering objective data.
There are many reasons to post an opinion on Zeek as an affiliate. Some joined not knowing it was a ponzi. Some joined when it was sold as an investment, and since the changes in Aug 2011 and Jan 2012, many are questioning the legitimacy of the company.
Some know that it has been a ponzi all along and are simply using this site to perform objective analysis. Since it takes 90 days to convert your virtual points to cash, having a strategic view of when Zeek may encounter problems maintaining the ponzi recruitment is completely relevant.
If you wait until there are signs of trouble (like with RicochetRiches, search on that using the top right search box), you won’t cash out nearly as much as if you take an objective approach and look for leading indicators of potential problems.
What one question is every Zeek affiliate asking… “when should I change my compound reinvestment strategy… and what ratio should I use?” If you had a good insight into Zeek’s revenue and recruitment numbers, then you can make an informed strategy decision on how aggressively to build, maintain, or cash out.
Ok Jimmy so if you are an affiliate and you believe it to be a ponzi why are you still in.
Also jtothet my advice is to stay clear of bidify.com. I have not done all the research on it but I know it is set up offshore and the founder has been in alot of trouble before. Thats all I have to say on that subject.
Well goodbye all and happy hunting.
And some are just plain clueless . Example going to Starbucks to use there ip addy . Wouldn’t it be easier to use proxies or simply clone a MaC address ? Lol .. …
The term ROI’s , anytime people make more then they put in, they use that word . Some people even use the term ROI for investing thier time lol.
@Ben
Yawn, excuses excuses. I told you to answer the questions.
So you admit that the only reason affiliates don’t use investment terminology and acknowledge that ZR is and has always been an investment opportunity, is because of a compliance ‘you can’t say this’ program.
As opposed to the company actually not being an investment scheme.
Bravo. Now we’re getting somewhere.
@JtotheT
…you don’t say.
It seems 6 countries, mostly in the balkans, were “sanctioned” this week without explanation, that is, all or most account there are no longer active.
That and I believe none of the deactivated account holders have received refunds as yet.
Zeek just shut their accounts and left them hanging, no official announcement, no explanation – nothing.
Here’s the list of countries banned from participating in ZR (not officially confirmed):
Serbia
Slovenia
Belarus
Egypt
Croatia
Macedonia
and here’s the latest explanation as to why from Zeek Rewards support:
…the interesting thing is that MLM is legal in all those countries. Maybe they have a more proactive approach to policing Ponzi schemes?
Zeek Rewards are yet to put out any official explanation, despite banning people from those countries a week ago.
Interesting that the narrative being told to “Zeek leaders” who then cascaded that down to their affiliates was all about fraud prevention. I know 2 affiliates in those countries who had their accounts deactivated with zero notification. Not even an email explaining what happened.
As for the laws in each of those countries, maybe the reason for Zeek’s stealth is they don’t want to raise awareness to anti-investment and anti-ponzi laws. (This I am speculating, because when I propose a hypothesis for discussion I am honest about it and not stating it as fact).
Regardless, all the secrecy and confusion is very strange.
Zeekrewards.com and zeekler.com down for past 2 hours. Denial of service attack? Or just bad IT management and no notification?
One day these sites will be under a multi-day long denial of service attack and let’s see what happens to the daily profit share, or whether people can even register their ads.
Maybe one of the groups affected in one of those 6 countries didn’t like being “sanctioned”. Okay, enough with the speculation.
The thread on the MoneyMaker Group forum with over 300 pages on Zeek Rewards just dissappeared in the last hour too.
What’s going on?
(edit: can still access the thread via Google but the thread ‘Zeekrewards – Zeekrewards.com’ isn’t appearing on the MLM forum index)
Well being an IT professional, I can tell you one thing. Zeekler/Zeek Rewards is looking like some sort of amateurish company with these unpredictable outages lasting hours at a time.
What kind of a company is trying to build up traffic to an auction site via advertising, and the site is basically up and down like a yoyo over several weeks? Did they round up some middle school students to program this thing or what?
And we are supposed to believe this company is taking in millions of dollars of revenue and can’t even keep a website up any better than this??? This company is a joke…..
@Oz, it’s still there: http://bit.ly/HfIpu7
Yeah you can still look it up on Google etc, it’s just been removed from the MLM forum directory.
Interestingly enough the thread was started by MoneyMaker Group “staff” member ‘mmgcjm’. Wonder why staff have removed the thread from the index?
Most people have imagined a gradually reduction in payouts, and lots of warning signs before something actually will happen. Most people seems to be willing to believe they will be able to withdraw most of their investments before a crash.
In the real world, an immediate shutdown will be more likely to happen than a controlled one.
Not sending information was probably a bad idea. It’s better to SEND information than to RECEIVE lots of different questions.
Most other companies would have produced lots of explanations claiming the problems to be temporarily, and “Confidence is high that everyone will get paid before Christmas” (famous quote from Gregory James Kennedy in WGI World Games Inc.). Most would have paid a few “trusted upliners” or “regional leaders” to prevent or delay any actions.
I’ll guess we soon will see whether people consider it to be an investment or “buying bids”. The true nature of something will often reveal itself when conditions are changed.
Are you living in an imaginary world or something? Most people would have detected that we’re not looking for opportunities to join, we’re analysing them in order to avoid them.
Joining a Ponzi scheme close to its peak doesn’t exactly remind me of an “intelligent investment”.
I can’t believe you guys … been reading for a few days now and some of the comments, math and lack of understanding is pretty amazing.
Math … Assuming payout is 1.5% of the profit pool, (and this is not guaranteed), that leaves an exposure of $15,000 per million bids for payout.
Bid retirement maintains the growth levels and eliminates the compounding effect that has so many wound up because of their lack of understanding.
If all 200,000 affiliates gave 500 points per day it would be 100,000,000 points leaving a payout liability of 1.5 million per day.
Since we are running on participation levels that will never happen, lets take the auction sites alone … 12 auctions running 86,400 seconds per day or 1,037,592 seconds. just to keep it simple, call that dollars or one bid per second. (this is to see if you can understand the business model not perfect numbers).
Ad to that the sale of advertising tools, banners, video etc. If only 50% use them that is another $50,000 per day income.
Ad in monthly subscriptions if everyone paid only the minimum of $10 dollars and you are looking at another $67 K per day.
Revenue sharing with ad venders, the offer me 75 cents per ad on a multi-level basis so you have to know that ZR is participating at some level … lets say half or 32 cents adding another $64k per day …
Again, you people do not know the revenue streams happening here, you have no idea what the numbers are or how the work, you are incapable of analyzing a business structure in any depth at all, and yet you speak as those that know what they are talking about.
There are many variables here that would be nice to know. It is clear that ZR receives a significant revenue stream from many sources and until you can identify all sources, Analysis is not possible.
However for you know-it-alls out there, the basic numbers of operations are well with the realm of a viable business structure and since it is a profit pool that is shared in the company has great control and stability.
So
100,000,000 results in a $1,5000,000 liability
Auctions provide more than $1,000,000 revenue stream
a few of the extra revenue streams provide another nearly $200,000.
Just a cursory look at the numbers and income streams are well with range of working.
Are you aware that this restriction didn’t exist until maybe two months ago?
Are you aware that such restrictions are due to potential ABUSE by affiliates to misrepresent the company?
If you can’t defend the company without running afoul of these restrictions, then HOW are you going to convince ANY BODY to join?
It’s also amazing to see someone who persistently refuse to address the most important question, even though this someone has repeated sought to prove his point by proving Zeekler is so profitable.
Why have ZeekRewards, which only DRAINS money from Zeekler’s profits?
Furthermore, your “payout liability” scenario is problematic as well. You wrote:
1.5% “profit share” is applied to the VIP points pool of each affiliate, NOT to the total bids used that day.
1 million bids may be used that day, but, let’s assume that 200K affiliates with average point balance of… let’s say, 750 pts. That’s 150 million. 1.5% of that is 2.25 million VIP points.
Exposure for payout is NOT 15000. It’s far worse.
Actual exposure for payout, assume 90% reinvestment (everybody), is 2.25 million * 10% = 225000 dollars PER DAY
Which is doable, if you count all the revenue streams. As soon as more people switch to higher cash out, ZR is doomed.
Furthermore, let’s work the number, with or without ZeekRewards.
Without ZeekRewards, Zeekler keeps 225000 payout, no advertisement share to pay either (another 60K), but loses the membership fees (67K)
Looks like a net GAIN of 225K PER DAY, without ZeekRewards.
Do YOU know how much money is coming in? Do YOU know how many points active members have (the believers here and recruiters everywhere keep talking about the great income they make, which would mean at least several thousand points, yet it seems unfathomable to them that tens of thousands of active members who have been active for several months would by now have a collective point pool somewhere over 100 mil.)?
You don’t, and you won’t, because ZR inexplicably guards this information like a military secret. What indication do you have that “sale of advertising tools, banners, video etc.” brings in 50k a day?
Who would consume those, the 18% of the traffic to Zeekler that is American (at least according to Alexa, the site they enjoy quoting so much). The only indication you have for anything is the auctions at the website. Have you looked at them? Have you tried to estimate the daily revenue?
Also, what do you make of ZR promising 125% ROI in the past but not anymore, and of the traffic to Zeekler being a fraction of that to ZR, again, according to Alexa?
Thanks Dazy, you make my point exactly … you don’t know the numbers, neither do I, but the model is viable in design. I would like to know the numbers too, and whether you agree or not, those numbers and the formulas they use are propitiatory and for good reason, if not why copyright and patent?
The margins and formulas are their own and could be revealed if they laid them out publicly, once protected they may … you do not know, nor do I either way it is not required of them from a legal point. (it is to regulators) If that bothers you too much then don’t participate,
Chang once again, your math is sketchy at best. How do you separate the individual points from the total pool? Would not the individual be part of the total pool? Strange math if you can make that work. And you did not reduce by the bids retiring ever 90 days removing them from payout liablity … get your pencil out again …
One of the biggest issues with auction sites is client retention. With that in mind $225,000 seems pretty cheap advertising as a percentage of gross revenue for any company.(ad budgets can run as high as 40% or more of gross revenue) Thus the need for ZR.
As far as 125% promise “In the Past”, key word here PAST. used to be able to buy as many bids as you wanted too. Things must adjust to provide for growth and what income stream can support. You are not suggesting that because a company had to adjust its marketing and pay plans it is no good are you? That would be ludicrous.
Keep going, you continue to prove my points.
I am not saying there are no issues to work out ,,, clearly tere are … but none I have seen are insurmountable as yet and any company experiencing explosive growth will go through difficulty, Amway has and so have many others
That’s the thing, we both don’t know the numbers (for no good reason, really), but the more things you do know (careful estimates of auction revenue being nowhere near what it would take to pay returns on hundreds of millions of points even after considering point retirement, traffic to Zeekler being significantly lower than that to ZR, auctions going over retail price, auctions losing Zeekler money, auctions losing the winner money, unnecessary business model, etc.), the less viable it seems, and the argument for ZR sustainability and/or legitimacy relies on optimistic estimation of what we don’t know, so there’s a bit of a “god of the gaps” dynamic going on.
I’m talking about a snapshot, one day, a “typical” day, in AGGREGATE. Why would I worry about ONE individual when we’re trying to analyze business model, which obviously involve ALL affiliates? You assumed 1 million bids, 200K affiliates, I threw in 750 points average VIP point balance, 90% reinvestment.
Why is it that when I offer estimates alongside yours, I need to get out my pencil? If number is not reasonable, offer a better number and explain why. Else you’re just whining.
Pay 225K for 200K members to post ads online. That averages to over 1 dollar per person a day. How many ads do you have to post again, per day? One? Why would they pay you guys to 1 dollar per text ad, when text ads are worth maybe 3 or 4 pennies each at most?
Company has to adjust its marketing plan because it is in danger of running afoul laws and regulations involving investments and such. You can call it “adjust for growth” if you like but it doesn’t change the facts.
Yet you continue to avoid the main question: why should ZeekRewards exist at all, if Zeekler is so profitable?
So far, the only reason you came up with is “customer retention”, by paying ridiculous share of profits to induce “affiliates” to keep buying bids and post text ads.
Dazy, with a little calculated estimation, with an understanding that the company only pays out on a cash flow and profit share, understanding the income streams of the penny auctions as well as several other income streams, understanding the retirement of points, internal and external consumption of product, there are very, very small gaps in the numbers if at all.
You are correct in that we do not know for sure, but careful and full analysis puts the basic model well within the realm of sustainability and legality as near as I (or anyone else) can tell with the information available.
Structure is viable on the basics alone. There may be some adjustments needed for changing rules, growth, regulations etc. There are some questions that it would be nice to have an answer to … we don’t have them now but that does not mean we won’t ever have them, internals of most companies are shared with stock holders and we are not stock holders leaving the decision to us if we are willing to calculate the possible risks and then accept them.
What I get bothered with is not if this is for you or not but people out there that make wildly inaccurate assumptions and the spew them out as if fact. This effects many people which seems to be more the point of this blog than getting the real information out so people can in fact analyze the business structure and risks involved with participation with the company.
If you assume there is no risk in a business you would be wrong. If you then join that business, any business, with that belief, you do not belong in business, stock market or even banks and insurance companies after looking at the recent economic crash.
Never said don’t use caution, always use caution! Just get the facts from somewhere other than a sight where opinion is far more important than facts.
Chang, you threw out an average daily on bids but did nothing for the average daily retirement … can’t get close to accurate without that.
I don’t know where you think you can get text ads for 3 or 4 cents each but if you can show me I’d love to see them. Can’t even pay people that little to post them for you. You further assume that that is all the company requires … it is not! Bad assumptions based on lack of knowledge of the system.
You seem to think a company can’t adjust to keep from running afoul of the law without being a bad company. If your assumption were near correct then please explain to me why one of the largest costs for any corporation or small business is compliance with regulations… again bad assumption based on lack of knowledge.
Again, you don’t listen or pay attention well. Marketing … Marketing … Marketing. It is how all multi-levels work. It is apparently more productive that TV ads which spend millions per month on advertising .. i.e. other auction sites … little research will give you an idea what they spend.
Amway has its SEPARATE marketing arms such as quickstar (contracted independent) WWDB (contracted arm) and many others that market specifically for them too. This is not some new concept but in fact part of traditional MLM structure.
There is some Gent on here that does not think corporate structure matters, well here is one place that it is critical. Suppose ZR trained a sales staff to sell door to door for them. They now hold all the liability of an employee, taxes, SSI, liabity, marketing materials and on and on. Why not create a separate independent entity to market your various products and let them assume those and all the other liabilities.
Again, lack of knowledge and misunderstanding breeds opinions that may not be accurate.
A snapshot is ok if it includes a full view, but like that snapshot that only show the finger flying and not the yo-you tied to the end of it, the snapshot could leave you with the wrong impression. I believe that is what is happening on this blog.
There seems to be no attempt or intent to actually look at the business viability and design, only spew opinion based on faulty assumtions.
Sustainability depends on the profit ratio and reinvestment ratio. When one falls, the other will fall, and the whole thing goes into a death spiral. If they can MAINTAIN 1.5% or thereof, and MAINTAIN everybody reinvest 80-90% they can sustain. If not, bye-bye birdie.
Legality is questionable, at least in certain aspects. Are the affiliates actually promoting the Zeekler auctions (i.e. selling bids), or merely recruiting more paying members into ZeekRewards? Former is perfectly legal, latter will run afoul of FTC’s definition of pyramid scheme.
I agree Chang, However the first comment you make here about profit ratios is absolutely true of any business, right down to the penny with some because ratios are so small. If the model is viable then it is viable, doesn’t necessarily mean it is going to succeed or fail, that will be a management issue and how many customers the company can hold on to.
Legality so far looks like any other MLM where personal consumption is a significant part of the business. That does not mean there are not other Retail Customers out there or that affiliates should not be making every effort to find Retail Customers.
This may be the actual reason for the PRC program that replaced the 5cc program. (could you imagine telling your marketers that they are lazy and not doing their job … that would give you great results!) It forces people to find customers. Will that part of the system be gamed? Guaranteed as it happens virtually in every other MLM.
Sample Bids are purchased and given away as promotions to pick up retail customers. Thousands are given to find a few Retail Customers, this is true with any business that hands out free samples. Does this make the purchase of bids illegitimate? No Xocia, Amway, Nu-Skin, Wow Wee, Herbal-Life, Melaluca, you name it, they all have standing orders and encourage you to buy all of your household needs and product through them.
What is a bit different here is that they ask you (not require you) to use what you have purchased for 90 days to promote the Auction sight to Retail Customers. How is that any different than handing out soap, chocolate, vitamins or anything else to promote your MLM
Will the regulators have something to say about it … likely. But so far, nothing that is seen is insurmountable which may be why they have hired all the best to make sure they are as compliant as possible.
Does that guarantee success … NO Does that mean they are nefarious characters scamming the people .. NO. Does it mean it is a new business working to remain compliant in a heavily regulated industry … YES.
Is there risk in working with them … YES, but with the proper information you can determine if that risk is for you. This blog, again, makes little or no effort to provide the best information available, only the most obnoxious opinions based on faulty information and they show no desire to look any deeper than their opinions.
That hurts many and wipes out any credibility they may have had to those of us that do actually no how to look at a business.
Am I correct on everything? I don’t know, are you, you don’t know. So why the anger, angst and upset when a new set of information is introduced?
We’re talking about OVERALL Point balance in ONE day. New points get added and points get retired. retirement is irrelevant if we’re talking just one day, not a whole period.
Even if it’s 30-50 cents per ad it’s still WAY over market rate. I’ve seen ads on Freelancers hiring people for 50 cents per ad on Craigslist. So paying over a buck is ridiculous.
I question why wasn’t this homework done BEFORE the company got started. These are NOT NEW LAWS.
So your GUESS is Zeekler spent 225000 a day on posting ads and recruitment drives. Now who’s being ridiculous?
It’s Quixtar. Quixtar got absorbed back into Amway back in 2008. WWDB is not a separate arm but a independent “support organization” that sells “motivational material” to members.
Clearly, YOU are working off old and incorrect information, yet you are accusing others of doing that. Check your own facts first.
Selling of bids or giving away bids is very legitimate. The problem lies elsewhere, such as REQUIRING people to recruit two paying members to qualify for payment.
The problem is you haven’t really offered much analysis. All you said was “You’re not correct in analyzing it this way.” You didn’t explain what’s wrong with “this way”.
You conceded that there’s not enough data revealed to make a meaningful calculation, but you insist in interpreting available data as “it could work”. Not all people choose to have such a presumption.
You didn’t introduce a new set of information. You simply offered to explain things with a positive bias.
Which brings up a related question: if the Zeekler business is doing so well (tons of bids), why are they spending so much money on “customer retention”, which was your explanation, by offering profit sharing?
Can’t they just lower the price of bids, for example? Or lower the premier bids like instead of premier 5, it’s premier 3?
Or is customer retention a huge problem in this industry that Zeekler have to spend a ton of money to retain the members it already has? Does this suggest a huge amount of churn in Zeek?
Are a lot of people LOSING money in Zeek causing the churn? If so, why would that NOT be considered a Ponzi, as people who quit basically fed their money to the people who recruited them through the VIP point pool system?
Chang, how is point retirement irrelevant to the one day numbers. Are you saying if I take on 1 million bids and retire 1 million bids it has no effect on the model? You are sharper than that!
Paying over a buck is not ridiculous if on top of the posting of the ads you are also buying the promotional samples (bids). Do your FreeLance joints do that for you too for even 10 cents and ad … I think not!
A valid question on the company not being prepared for the laws that are not new. Would like to know the answer to that too. I have worked with companies that have missed some pretty basic stuff though and when the decided to go public it caused them untold grief … not a brownie point in their favor, but not insurmountable.
Those were your numbers Chang. Even if they were that large, if the auction sight alone is producing $750,000 to $1,000,000 gross revenue and that is only one of its streams of income, all I was saying is that as a percentage it is withing the realm of other businesses I know for marketing costs.
Just using examples of the structures that are used. There are many reasons to structure. I apologize for using what you see as outdated to demonstrate structuring … by the way, WWDB sold more than just motivational materials and in fact had to because of regulations imposed. I know I was there when it all happened.
I believe Motivational stuff was their primary but they sold other things too. (’83 -’89) and you are right have not been a memeber since so I ccan’t be sure. What I wanted to demonstrate was structure, not that they are currently in business. If you need to see more structure go to Ford. GM, Wal-Mart, Boeing, and thousands of other companies.
Are you telling me that MLM’s today do not use corporate structuring because my examples did not succeed?
So how does knowing how many points are going to be retired affect the OVERALL NUMBER OF POINTS in the system AT THAT MOMENT? 1.1% of the points? Assume “end of day” calculations.
Are you going to assume NO new members join?
Just assume new members and purchases even out the retiring points. You can assume a growth as well, but it doesn’t matter that moment in time.
Promo samples have their own 20% commission, do they not?
1 million bids would have produced, let’s say, 55 cents (that’s including the discounted and BOGO bids) that’s only 550K in revenue, gross. Add another 67K and 60K and you get about 677K revenue TOTAL per day. Feel free to provide a better estimate, as you are the one who threw in “1 million bids”.
No, but you’re mixing metaphors. WDDM is not a part of Amway, merely works alongside Amway (like a symbiote) but you are discussing ZeekRewards as if it is a part of Zeekler by revenue sharing and all that.
Don’t forget that when a retail customer buys bids, Zeek Rewards not only pays 20% commission, but also matching VIP points per dollar spent.
That’s a lot of points that pay profit share. Where does the money come from? Where is the retail revenue that pays ZERO matching points?
I believe it may be time to stop analysing details, and try to get the facts straight in “basic business economics”?
* Bids = virtual currency
* VIP Points = virtual currency
* money = real currency
Money is the only currency that can generate revenue or expenses in a business.
* Sale of bids will generate revenue, if the bids are paid for with money.
* Sale of bids paid by VIP Points won’t generate any revenue.
* A Penny Auction doesn’t generate any revenue in itself, except for the price people pay for items they have “won”.
* Huge balances in VIP Points or bids isn’t a problem in itself, but it becomes a problem when enough people starts to withdraw them as money, when the money withdrawn exceeds the money paid in.
I have separated all the virtual currencies from the real currency here, to get the facts straight.
It’s pretty meaningless to study the auctions and try to calculate daily revenue. The only thing you have to study is bids sold for money that day. You have been fooled by a psychological trick here, accepting virtual currency (bids) as real money. In reality, all the revenue comes from sale of bids, not from the auctions.
It’s pretty meaningless to mix virtual and real currency when we try to calculate something
A million dollar a day from Zeekler? Not a chance, not even close. Not a third of that. More like a sixth. That much I’m sure of after hours of going over auctions.
And only half the revenues/profits is shared with affiliates (allegedly). Not having accurate numbers is not the same as not being able to ballpark it. Yes, it’s much, much higher if you consider subscription fees and bids paid for by members.
You came up with an average of 750 per day for affiliates. That is extraordinarily high but lets use your numbers… 90 days from the day they purchase those 750 points those will disappear or retire.
This is absolutely relevant in overall liability to the company by day or year. Net growth would be any points above that wash and thus create and additional liability for the company, but it is not 1 million new bids net as you have presumed.
If no new members join, this will have some effect on the company income, certainly, however repurchase and retail business could conceivably and ralistically continue the business model simply by internal use and other income streams …
If profit for the company reduce by gaining no new recruits then payout will also reduce keeping an equilibrium between profits and payout liabilities. (Remember, there are no guarantees on income as has been represented in this blog over and over again, this is made quite clear).
As profits reduce so does the liability per bid, how does this put the company in any financial distress where its payout is concerned?
I am not sure what your commission payout of 20% is getting to. Is it inappropriate to create an income stream for the sales force or ??? Could you explain a little more on that point.
The company has a certain margin it must make to cover costs, is it realistic that the doors opened without knowing what those costs were going to be .. unlikely. The 20% must have been calculated … it may have to change as the real dynamics change. (the “it all looks good on paper theory) This is not uncommon in business
As far as the income calculations go, Chang, those are only a few of the income streams and do not even include any profit margin on the bids themselves. We simply do not know all of the income streams or ratios.
As Dazy said it would be nice to know but it is quite propitiatory in its design. It is not at all unrealistic that we have missed other income streams and deductions that could rapidly bring these numbers into balance.
I am not discussing ZeekRewards as a part of Zeekler, in fact quite the opposite. You seem to assume that Zeekler is the only income stream for ZR and it is not. Neither was Amway the only income source for WWDB, but as you say, the relationship was quite symbiotic.
I don’t see Zeekler offering advertising tools for sale, but, ZR does, as did WWDB. I don’t see Zeekler offering revenue sharing in ads, however the ads do share revenue. ZR has proffered advertisers that share revenue .. does Zeekler? they do not. Does Zeekler pay commissions for the online store, no, how about the online shopping search engine? no … and we do not know all of the other income streams that may be available to ZR. Zeekler makes no pretense to do anything but Auctions.
What is it that makes you think Zeekler and ZeekRewards aren’t in fact working side by side like WWDB and Amway? They disclose quite openly that they are different companies.
This is not mixing metaphors, simply explaining that there are many different structures here and to discount that is to have a serious defect in any conversation about structure and sustainability of any company.
Dont forget out of all the members on Zeek , There is probally close to 100’s of Millions of Dollars trapped in retirement . For 90 days , 4 times a year that alone can produce big $ . 1 person alone with 10,000 points can have over 5000.00 dollars in retirement .
Is this a good company to join?? I’m just reading all the confusions?
Doesn’t seem like people are happy with the company?
@Justlooking
Percenteges are not patentable or copyrightable. Neither are they propriatary.
The only reason you keep percentage numbers of what makes up the profit pool secret is because it gives the game away. Every other profit pool out there clearly states where the money comes from, and usually it’s company wide commissionable volume.
With ZR it’s member investments, which looks bad.
Here’s one I’ve put to you a few times now:
With ZR members growing their VIP point balances indefinitely, the amount of cash payout required to sustain and continue to grow this balance also grows indefinitely.
How can ZR continue to provide this money? No revenue source of ZR’s is going to provide indefinite growth.
It’s the Ponzi scheme fundamental flaw.
First off the percentages are a structure and feature of the business operation as with any product or design. They can be protected as any other intellectual property.
Second, I have to agree that they can not continue to grow indefinitely as there is no market that does not level out at some point. Most MLMs it seems to be around 1.2 million.
It is clear that this can be an operational model we would need the numbers to determine where the level may be. Many years ago Amway (when I was a rep) was at about 500,000. There was a massive and rapid growth right up to 1 million or so people and it reached that level.
Saturation, may be a term that lightly applies here, attrition of reps and recruitment seem to close to make much forward progress in growth.
I believe ZR will reach that level at some point as none of its primary products have an unlimited market and will at some point reach saturation. This does not make it an investment scheme any more than any other MLM. It does mean they will have to deal with the balance of income vs. outgo like any other company in existance
I think Oz, I need some clarification on your comment “allowing the bids to grow indefinitely”. I can see where there may be a misunderstanding here.
Because if people can’t sustain their 90 day VIP point balance expiration, they’ll leave in droves and the Ponzi will collapse.
So? No more so than the address of the company. You can’t copyright or patent percentage numbers, nor can you claim them to be intellectual property.
Well that pretty much blows your entire ‘there’s nothing we can’t overcome’ statement out of the water then. And seeing as that’s been a fundamental flaw since I started writing about Zeek Rewards, I think we’re done here.
Everything else is irrelevant if you agree they can’t survive the longterm (because their business model is that of a Ponzi).
Doesn’t matter what the number is, only that it exists. If it exists, it will happen and the business will implode at some point.
Of course it does. Other MLM’s don’t have to worry about paying out infintely growing ROIs.
Products get sold and commissions are paid out, that’s all legitimate MLMs have to worry about. None of this we have to pay our members 1.25% or whatever bullshit so their investment returns run into the negative and pull out all their money.
Legit MLM company – no sales, no commissions company collapses because their are no sales and people lose interest. Nobody pulls all their money out, nobody loses any money (except maybe a joining fee if they joined while no sales were happening).
Zeek Rewards – no investments, ROIs drop and people can’t sustain their point balances over 90 days and start to withdraw all their money. Company collapses because people stop investing and they can’t pay out enough ROI over 90 days to retain their members.
If there’s any misunderstanding, it’s because I never said that.
I said
90 day retirement can be invested into a 3 month CD , Zeek has been paying out to their members going on 2 years with no problems . Lay this to rest .
Dunno what a CD is, but I’m pretty sure you didn’t address the problem.
A Ponzi scheme paying out now doesn’t certify long-term sustainability.
Oz, you would be correct except for point retirement, attrition and income growth. Numbers you continuously ignore. ZR can continue to allow growth until market saturation on their primary produce and it is likely that will at some point. This still does not make ZR an investment scheme.
You are correct in the assumption that they will reach a point of balance and then the profit pool share will naturally adjust as company profits stabilize to a less aggressive level.
Without knowing what all of the streams of income are, we won’t have that answer. If subscription rates level off however and the retail market reaches its saturation point the company has plenty of room to adjust.
Oz, a CD is an interest bearing bank instrument which has required investment periods, such as 90, 180 day, 1 year or longer too.
I am not sure how you can compare buying product samples like bids to CDs other than time frames though. A CD is passive investment income while ZR is earned income.
I’m not ignoring it. It’s my entire point!
After 90 days points start to expire right? Let’s call the VIP point balance start of any rolling 90 day period x and the end y.
If ZR members to not get a large enough ROI in dollars such that after re-investing y is greater than or equal to x, they will leave.
To ensure y is greater than or equal to x, enough ROI has to be re-invested back into the company by converting VIP bids into points to sustain (and grow) the point balance.
As the point balance grows, over time the ROI (in actual dollars) required to re-invest in enough VIP bids grows indefinitely.
No revenue stream on Earth grows indefinitely, so where’s the money going to come from as more and more people require ever-growing ROIs to sustain and grow their point balances over a 90 day rolling period?
If it adjusts below a point where members cannot sustain their point balances over 90 days, the Ponzi collapses.
The problem is the actual ROIs required to be paid out so members can re-invest to combat point expiry just keeps growing, regardless of how much money the company is making.
Regarding the banned countries, here’s the latest ‘fuck you’ to Zeek Rewards members who reside in them (some of which had been participating in ZR for over a year):
No further comment? Smells like bullshit to me.
Still no official company announcement, despite accounts and people being banned over a week ago now.
In other news, legitimate MLM companies are still legal in Serbia, Slovenia, Belarus, Egypt, Croatia and Macedonia. What’s different from ZR to other MLM companies?
Oh I dunno… maybe the whole investment scheme thing?
The real problem with Zeekler is that the auctions suck for retail customers ( ie real people buying bids for themselves with real cash – not affiliates creating fake customers to dump bids on ) compared to other penny auction sites such as Quibids.
1. There are few auctions running comparatively.
2. The auctions close at very high prices for a penny auction (even sometimes at or above retail)
3. The IT department sucks so they are going to have server problems which is horrible for a penny auction ( example – the Ford Mustang auction ended due to a server glitch which then awarded it to the only bidder using ABE at the time ).
4. Zeekler doesn’t have “Buy-it-Now” (Quibids does), so customers will most often leave winning NOTHING and it is basically an all-or-nothing situation since you can’t get the item via Buy-it-Now to lessen risk.
5. There is a huge supply of bids out there and no win limits, meaning the auctions will be dominated by affiliates who are blasting the auctions with massive amounts of bids costing them nothing.
6. Customers paying for a limited supply of bids at 0.65 have virtually zero chance of winning anything when competing with hordes of affiliates with near infinite bid banks. Goodbye repeat business for any paying customers.
Try to think of the situation where a new customer will experience winning an auction with their free bids and be enticed to actually BUY more bids at $0.65 each. How easy is it to win? Not very. How many affiliates with thousands and thousands of bids out there – tons. How likely is the customer to see good deals closing in the auctions – unlikely.
As a Quibids customer, I can tell you that I would not be buying any bid packs if I saw auctions closing way high and some over retail price and huge bidding wars breaking out on every auction out there, auctions being won due to server glitches, the same few people winning over and over again, etc.
The problem with ZeekRewards is that it is only legitimate if Zeekler is a profitable, sustainable penny auction on the basis of RETAIL ( ie non-affiliate related ) customers paying real cash for bids.
When you analyze the situation in depth, it becomes obvious that Zeekler is dominated by ZR affiliates/fake customers or customers receiving “free bids”, not paying customers buying bid packs.
Thus, the “success” of Zeekler is entirely dependent on getting more and more affiliates to buy bids to give away and an ever-growing VIP point balance not being cashed out by more than a small percentage of affiliates at a time without crashing the system. It’s like a giant game of Liar’s Dice. Eventually, enough people are going to cash out to lower the profit percentage, then more will cash out because they notice the profit percentage is declining, then a rush for the exits will occur and the whole thing dies.
You might be able to “ride the wave” a short time, but the long term of this thing is assuredly failure. Why were the spreadsheets outlawed? Because they demonstrate in painstaking detail the short-term ephemeral nature of the opportunity. Why are the profit percentages a shrouded secret now? ( ZeekAnswer site shut down ) – because it makes it easier to tell when the game is up. Why no public meetings? Less embarrassing questions to answer about the sustainability of the opportunity, and less chance of being exposed as an “investment” scheme.
So if Amway quits being able to sell product they will go out of business? Does that make them a ponzi?
It is beyond clear you do not understand the basic math of this business or profit share, or passive investment v business investment (earned income) or even cd’s which every little old lady owns
Oz, if you really don’t know what a CD is (I think you are yanking my chain here) you have no business whatsoever discussing investment returns. It is clear you have exactly zero knowledge in this arena.
As far as the apology is concerned, did you get the part about refund the money or maybe you missed that. Are you saying that political influences don’t shut down businesses? There are several out there right now like … mmmm … I don’t know republican car dealerships because of government takeover of GM and Chrysler.
The apology is meaningless to your argument and encourages argument in favor of ZR as they offered to refund the money to participant.
The fact that they could not comment further may mean anything from trying to get things fixed to legal action in favor or against ZR. At any point no half wit attorney is going to suggest you make a public statement.
Was it you that said you were in Law Enforcement?
RE. CD, it’s a US term. I’m not based in the US – we call them term deposits. Same thing from the sounds of it and doesn’t address the problem.
You didn’t answer my question:
I don’t care about Amway or CDs within the context of this discussion, answer the question.
Woefully not good enough. Members have been banned and they deserve an explanation.
No, someone else stated that and I just ignored it. It’s just another tangent and irrelevant to the discussion.
It’s rolls over from the 90 day retirement , you can calculate how much you can take out and add both.
Basic example a person with 100,000 points and tries to cash out , set at 0% taking out 1500,00 a day , his retirement will deduct daily from 90 days back to front ending on the last week around 1500 daily , for 90 day’s then he would have 0 VIP bids and one ugly 1099
You’re missing the point. The ultimate goal of ZR members is to withdraw enough to live on, whilst continually re-investing into the scheme to increase this amount.
As the point balance grows, so too does the daily ROI amount required to re-invest. As it stands, this is infintely growable and a mathematical problem.
No revenue source can sustain the infinite growth needed to be paid out in ROIs to replenish VIP point balances to keep them growing.
Hell, even to sustain them is a growth problem because if there’s a ceiling, it caves in the second another ZR member hits it. Then the ceiling continues to fall and we’re back to everyone’s point balances running into the negative – at which point they pull out and again the Ponzi collapses.
It sounds like CD’s and term deposits may be the same. As far as the “unlimited accumulation of bids” I am not sure where you come up with that. As repurchase are made older purchase retire in a 90 day cycle at ever increasing numbers.
The internal mechanisms of the company and the numbers indicate that if they recruited no one else and simply maintained the company could go on. They paycheck would not be as large but it could survive. Profit share supports that.
What they would do to maintain a sales force is unknown but many other MLMs have managed. Market share is going to max out and when they do the point system will continue to retire until equilibrium has been reached.
It is a mathematical certainty that can not be denied. As profit share shrinks so does the repurchase capability and thus accumulation. Pesky math, can’t get away from it.
Oz, I don’t know if you follow politics in this country but multitudes of business get closed down for political reasons and can not comment sometimes for years.
It was 2 years before it was discovered that car dealerships were closed down because they were known donors to this idiot presidents opponent. Explanation may or may not be the result of ZR or the government. This still does not make ZR the bad guy and it is quite presumptuous to say that it does with no information at all except an apology and offer to repay.
Yes, and when those repurchases expire, you need even more of a ROI to purchase more bids to increase your point balance.
Even if we talk sustaining a point balance at 0% growth, as more and more members reach this theoretical limit, inevitably the limit shrinks and shrinks until everyone (due to point expiry) has a 0 point balance (the theoretical limit).
The ROI is recorded as actual money being paid out (even if it’s being re-invested in bids), and is as you put it, ‘ever increasing’
Where is the ‘ever increasing‘ revenue going to come from to cover the ROIs required to continue to grow VIP point balances indefinitely?
You still haven’t answered this simple question. And this question is key, because nobody is staying with ZR if they can’t increase their point balance or at least sustain it.
No you can’t, so please answer the above.
Car dealerships are not investment schemes. Investment schemes aren’t shut down for political reasons, they’re shut down for legal ones.
Points don’t run in the negative . Once all your points retire you’re left with 0 , not in the negative . Lol , If you have no retirement have 0 points . Zeek could possibly be getting funds from the government .
Who knows . Ponzi Shmonzi . The only Ones that really know are the ones behind the mask . Go Zeek!!
A person can’t go more than 90 days at 0%
They do within the context of I have x points now and in 90 days I have y. If the ROIs aren’t high enough to re-invest in VIP bids, y is less than x.
This happens whilst the total point balance is above 0, but it’s still a negative overall.
That’s a cop out. Answer the above question I’ve put forth, where does the infinity money to cover indefinitely growing point balances come from?
(this is the fourth time I’ve asked it in 2 hours with no answer).
No, I said we’re assuming at the end of that particular day, the average Zeek affiliate have 750 VIP points. Then whatever profit share is applied to that balance.
You said it’s not extraordinary for a company to overpay market price to “compensate” its members so the average of over a dollar per posted ad is perfect normal. I pointed out that you didn’t count the 20% commission for the bids given away.
What we were able to calculate is enough to show that Zeekler may be rolling in money, but ZeekReward is a parasite on Zeekler, sucking away at least half of the profits, generating only “customer retention”, which was what you said.
Yet ZeekRewards have no income other than membership dues, and Zeekler must be feeding it OODLES of money to pay profit shares? Mixing revenues and expenses means they are NOT separate companies as they claim.
Or put it this way: when you get your check, does it come from ZeekRewards, or Zeekler? Where does ZeekRewards get their money?
ok I thought I was done here but I opened my email and got hit with a hundred emails from this site. I think I get the point chang, Oz, jimmy, and Dazy think zeeks a ponzi trust me I think we all understand that by now.
Then you have some others such as myself that dont think it is a ponzi.
So now that I think we can all agree to disagree can I please be taken off the notification list. on a good note I just won some great products on zeeks falling auction.
I won a northern popcorn machine for 7.63 plus 9.95 shipping. i won an Ihome speaker system alarm clock for 26.34 plus 9.95 shipping and a Wacom fun tablet for 13.67 plus 9.95 shipping.
Your right oz at these prices how are they going to keep paying out. on the flip side I did buy a bid pack so I guess you could add another 30 to 40 dollars in bids I bought
That’s yet another cop out.
Can somebody who thinks Zeek Rewards is not a Ponzi scheme answer the question already?
Fifth time I’ve asked it and counting.
Oz, I have answered the question over and over again. If you would simply do the math you would find that there is a “theoretical limit and every business will reach that limit or sustain it.
If I put 10K in (lifetime max from outside sources) and allow it to build in what you call the ever increasing numbers my cash flow would increase accordingly based on what is happening in the profit share system. As profit share diminishes so does the ability to repurchase bids. It will create a downward pressure until it reaches an equilibrium with the then current growth, retail profits, attrition rate etc. It actually must do exactly that mathematically.
You can’t do only one side of the (your terms) compounding increase without looking at the compounding decrease and how it is handled in this business model. There has never been any such thing as 100% participation nor true saturation in any MLM and it can’t occur here because the very market forces that are creating the opportunity here will also provide it with its limits.
Either I am not clearly understanding what it is you are suggesting about unlimited growth or you are not clear on both sides of the math and how the profit share maintains the balance.
As far as your car dealership issue goes, law and politics are one in the same here. How was it legal to steal these businesses from people that invested their hard earned money into them so that they could EARN and income. You don’t think the law was used here for political gain? You know better than that. Stock holders were robbed, bonds were stolen, dealerships closed, unions benefited and all under some misuse of the LAW.
Am I saying the how the regulators will see ZR, no, but I see no evil intent here nor do I see any insurmountable odds for them. I see great misunderstanding of what an ROI is and what earned income is from investing in ones own business.
If this is an “investment” providing an “ROI” as you suggest, then put 10K in and do nothing, see what your “ROI” is. It will be exactly zero. Take only the action of posting an ad and see what your “ROI” is. It will be exactly nothing. You must find at least 4 customers, 2 retail and 2 wholesale and you must maintain them. The very definition of earned income, not passive interest income you keep referring to in your “ROI”. No way around it.
And Bernard Madoff had paid for almost 20 years. Your point is what exactly?
chang actually Zeekrewards is just now starting nxpay. I should be getting my debit card soon. If zeek was having such problems why would they come up with ways for the affiliates to get thier money same day instead of every 2 to 3 weeks.
Probally turning and burning funds . Funding banks , ect . Maybe Mr Burkes is worth a couple billion.
There is a math Behind this mistery
Don’t you understand that if Zeek turned out to be a ponzi it would be the biggest ponzi scam in the world ? You haters should just jump in and buy some VIP Bids and ride the wave .
Chang, Madoff did not require active participation, limits or profit share. He held himself out as a passive investment with his firm as the investment manager. Crumby comparison for sure.
@cashing out:
There is a limit of 8 wins per user id, but I’ve spent several thousand VIP bids and have only won 3 items. This includes using AHK automation and still not winning.
WHERE???
Every business does not have to keep paying out increasing ROIs so that members can re-invest in VIP bids to keep their point balances sustained and/or growing!
Jesus Christ.
Where is this money going to come from?!?!?
What revenue source provides an ever increasing cash flow for you to re-invest with?!
No it won’t, it will continue to nose dive as more and more members hit the growth ceiling exponentially as it drops. Couple this with members pulling out their money because their overall point balances are now dropping and the Ponzi collapses!
There’s passive investment, and then there’s active investment. Both are still investments. Anything that offers you a fixed return (whether it’s the amount paid out or a timeframe, as is the case with Zeek, or both) is an investment.
Clearly. Nobody is investing in Zeek if they can’t grow their VIP point balances. Why? Because that’s the whole point of the scheme – to make money and continue to increase the money you’re making.
The second cannot sustain their point balances or grow them, they go into 100% withdraw mode and the Ponzi collapses.
What, you think people stick around when Ponzi returns start dropping and approaching 0? Wake up. The second a return ceiling is reached the ROIs will plummet because instantaneously more and more people will start to hit that ceiling driving it down (if the profit share balances out, all it takes is one more member to hit the new celing before it has to drop again to balance out).
Car dealerships are not governed or regulated by the same laws as investment schemes. This is getting off tangent and is all I’ll say on the matter. Stick to discussing ZR.
@JtotheT
If you’ve got nothing further of relevance to contribute to the discussion other than this shit, I’ll ask you not to drive down the readability of this discussion.
What exactly does that have to do with anything Jimmy. I know several that have won on a few bids. How does this pertain to the conversation?
@ just looking . Right ? They are working on alot of things lately , That Nxpay will definettly help them on paper costs and ink and postage .
Just a quick correction to Jimmy’s post. It is 8 wins per month per user ID.
We’re not analyzing their responsiveness in customer service. We’re analyzing Zeek’s business model.
JtotheT stated that because ZeekRewards paid for 2 years it should be considered legitimate. I pointed out a counter example, proving age is NOT the factor that defines legitimacy.
Wasn’t ZeekRewards started in 2008?
I hope you’re just being sarcastic, as I have no intention to see my underwear auctioned off like Bernard Madoff.
Chang, I misunderstood the point, sorry. Zeek was started as an MLM about 18 months ago as I understand it. There may have been other portions of it in place like the online store. The auction in as MLM income less than 2 years.
Not quite. At 1.5% he cashes out $1500 the first day, but since he will have a rolling 90-day expiration, he cashes out less day 2, and less day 3, less day 4, etc. The entire scheme is designed to discourage cashing out and to maintain account balance or growth.
But at some point, people will cash out, and when the cash out volume hits a tipping point, the whole ponzi collapses.
Oz I am a little confused when you say infinite. I guess i dont understand what you are trying to ask. Lets say you buy 100 bids and give them away as samples you earn 100 points then the next day the company determines a pay out of 1.5 % or $1.50 and you buy bids and this continues for 90 days and lets say that in 90 days you have a total point value of 800 points.
Then on day 90 it drops to 700 because of the first 100 lost then the next day you gain but lets say the daily payout is only around 1.3 this fluctuation in the daily reward and the point expiration is how the company controls it obligations.
In other words the company could decide it was a bad day and after looking at what they have to pay out in daily rewards and determine they can only pay out .3% which cause my overall point total to shrink during the next 90 days until it became stable.
100 points = x
800 points = y
At the end of 90 days you went from 100 to 800 points because the ROI paid out was large enough that you could re-invest in enough VIP bids to grow your point balance.
From day 91 onwards, ZR need to pay out an increasing ROI so that you can continue to invest in enough VIP bids to grow your overall point balance.
This is where the indefinite growth comes in because the ROI required to be paid out by ZR to you grows indefinietly as your point balance does.
In any given 90 day period, if the net growth of a member’s VIP point balance is negative (with 100% re-investment), the Ponzi will collapse. This hasn’t happened yet, but with no source of indefinite revenue to cover indefinetly growing ROIs required to be paid out, it’s inevitable that it’s going to happen.
All Ponzi schemes suffer from this fundamental flaw.
To date, nobody has identified a revenue source of Zeek Rewards that has indefinite growth to cover the ROIs required.
Once the initial 90 days is over and your losing bids each day due to the 90 day limit, are you really going to stick around and keep investing if ZR paid out a 0.3% ROI for 90 days straight?
Let’s say you were slowly growing your point balance and were hovering around being able to purchase 1000 bids a day, and losing just under that due to the 90 day cap. Like I said, slowly growing your point balance and enjoying the ROI.
All of a sudden ZR start only providing you with a 0.3% ROI. Meanwhile you’re still losing close to a 1000 points a day. If we use the average of 1.5% a day (90 day average?) you’d have around 66,666 points to be generating around $1000 a day to re-invest at that particular time.
ZR just paid you out only enough to purchase roughly 199 VIP bids (0.3% daily ROI), and they’re going to continue to do this for the next 90 days. What do you do?
You do what everyone does in this situation, 100% cashout and run for the hills. Meanwhile the Ponzi scheme collapses.
Keep in mind you wouldn’t know this was going to happen in advance, it would just play out before your eyes.
Also it’s not going to drop to 0.3% overnight, it’ll gradually decrease until people start to make an overall loss in points over a rolling 90 day period. Then the mass cashouts begin and it’s all downhill from there.
This isn’t a possibility, it’s an inevitability based on the fundamental flaw that no revenue source of Zeek’s can deliver an infinitely source of growing funds to cover members infinitely growing their VIP point balanceds indefinitely.
Unless someone can identify a revenue source in Zeek Rewards that delivers infinite growth, I think we’re done here.
Let me try.
The VIP points pool is fueled by purchase of bids (either by yourself or given away). You buy 100 bids, you earn 100 points.
Let’s say you don’t ever put in another penny except the monthly $10 fee. You’ve put in $130.
At the the 89th day, you would have, assuming 1.5% daily, $381. I don’t know if they round up, but it’s 381 VIP points.
On the 90th day, you end up with 281 VIP points.
Assuming 100% reinvestment.
So you’ve spend $130, and gotten ZERO back. However, the remaining 281 VIP points, gained through “interest”, does NOT expire.
Let’s say the 281 points goes for ANOTHER 90 days, so you’ve spent total of $160 so far. How far would your point balance grown, again, 100% reinvestment?
The answer is 1073 VIP points. None of which expire.
As you can see, your points simply goes up exponentially. And it’s not just yours, but everybody elses. You can imagine those been in from the very beginning, like Dawn herself, probably have like a million points, so her VIP pool must be going up like a rocket.
Yet is the Zeekler profit share going up just as fast? so it can MAINTAIN 1.5% payout?
Not very likely.
There’s admission from Justlooking before that when the payout falls below a certain point (probably 1.2 or 1%) people will stop reinvesting and go into cashout mode, which means the profit will go even lower and the whole thing goes into a death spiral.
The whole model is doomed to failure when analyzed. Feel free to explain why this is not so.
And just on this:
You’re accounting for only your own required ROI to maintain your point balance.
If it caps out, it doesn’t just drop till your balance is stable, it has to drop till everyone’s balance is stable and continues to do so until this happens.
Simultaenously more and more people reach the ceiling as it falls and push it further down to balance out their own returns, this exponentially causes more and more people to hit the ceiling.
This cascades and the scheme collapses.
Perhaps this is a clearer explanation for you (I don’t like using specific percentages as there’s too many unknowns and am not 100% sure on the math in the above example).
even if your point value did begin to shrink why would you just jump ship.
I remember playing the stock market and I had GE which was 65 dollars a share when I bought it then it started dropping until it hit like 11 dollars a share and now it has stabelized somewhere around 20.
Same thing with many other companies they sometimes start off growing fast until they hit a tipping point and begin to fall until they stabilize to thier actual worth not the inflated worth.
Oz, Investing in a business of your own, I.E. independent rep with ZR and Passive investing are two entirely different things in both performance and legality. It is a clear distinction that effects how you represent the business and how you describe the income.
A Ponzi collapses when payout can not be met from bringing in new members. This is not the issue with ZR, in fact new members are only a portion of the income. There is clearly product consumption both from retail and internal consumptions (as with any MLM) and the mandatory customers you must get and maintain to remain in the profit pool.
I get quite frustrated with your use of the word investment as though it were some passive thing and not a business investment generating income that is entirely dependent on product sales, wholesale, retail and internal consumption as with any other MLM. Earned income.
The auction is not the only income stream. Other income streams make a significant contribution to the company as well. The numbers clearly show the company could maintain a profitable condition if no more people joined.
Because it is a profit share on a reducing liability the company need only hold a reserve large enough to compensate for payout that may be larger than net retail profits …(i.e. 100 dollars retail profit 110 dollars payout. Actual reserves needed 10 dollars .. fairly common business calculation for risk management on inventory.)… This reserve need only last 90 days due to the rapid reduction of liability in the point retirement system, even if everyone began 0 repurchase immediately.
As retail customers fade and internal consumption goes down the pace of the retirement of points accelerates and the actual payout reduces exponentially. Actually an incredible safety net when you analyze the numbers. Everyone gets paid as the company winds down. No Ponzi I have ever heard of had such safety nets in them.
The company offers NO FIXED RATE of payout. I have pointed this out on several occasions and no one seems to listen to that point. It is made very clear that the pay comes from a portion of the profit put in a pool to pay affiliates. No guarantees and no profit means no paycheck.
All you need do is the entire math. Will reps stick with them? Don’t know, depends on where it reaches its equilibrium doesn’t it? If it is not able to maintain profits once it peaks out it will come down like any other unprofitable business.
As far as the car thing Chang … you made a comment about “bullshit” on an apology. Simply using that to demonstrate that the government can easily attack and shut down a company like ZR if they have a political disagreement. You do not know if the government had an ax to grind or not. You do know ZR offered to pay back all the money spent. Harsh words with no information.
Maybe I misunderstood the concept. I know the VIP points from the purchases “expire”. Do the points from the “interest” expire or not?
Zeek Rewards did not begin operating until the end of Jan 2011. There were various forms of penny auctions and different sales models used but Zeek Rewards, the investment with 125% fixed ROI, did not begin until Jan 2011.
JtotheT saying Zeek Rewards paying “going on 2 years” is not correct, unless you call Jan 2011 to present as “going on 2 years”.
Usually, something bigger and better had came along? 🙂 MLMers tend to be serial: they jump from one program to another, thinking each one is the best thing ever… until they see the next one.
The point is… this doesn’t stabilize because the points doesn’t DECREASE, EVER, unless someone tell me that the VIP points earned as profit share “expire” as well. Thus, the points will ALWAYS grow at a faster pace than profit.
How it works is that on day 91 your 100 points (added on day 1) expire. So you have 281 VIP points on day 91.
On day 92, your points that you gained on day 2 expire (1.5 points, i.e. 1.5% of 100 points which was your balance on day 1). On day 93, your points you gained on day 3 expire.
So your points expire gradually over a 90 day period. If you switch to 100% cash out on day 91, you don’t gain 1.5% of 281 for the next 90-days, you gain decreasingly less as points expire every day.
@benjamin
Because each and every day you lose points due to the rolling 90 day expiry. When the ceiling drops because there’s not enough money to go around it’s not going back up, and that’s when the % continues to drop as more and more people hit the ceiling – this scenario is explained above.
Shares don’t expire after 90 days, irrelevant.
Nobody said anything about investing in a business of your own.
a. you invest in something and a business guarantees you a ROI for 90 days.
b. you invest in something, pat your head, spam the internet, give bids away whatever, the business still guarantees you a ROI for 90 days.
Despite conditions attached to the second investment, it’s still just that, an investment. You’re receiving a 90 day return, how ever you want to dress it up.
No, it’s much more simpler than that. A Ponzi collapses when the returns owed does not match the investments being made.
Who is making the investments is irrelevant, you don’t need new members as existing members can make investments, you’re mixing a pyramid scheme with a Ponzi scheme.
Are any of these income streams delivering infinite growth? Because if not, then you’ve got a problem.
Due to the infinitely increasing point balances and ROIs being paid out, so too must this reserve then increase infinitely.
Call it a reserve, call it a ROI, call it having money in the bank I don’t care. The question is the same:
Where does the infinitely increasing required money come from to sustain the grwoth of everyone’s VIP point balances?
And given you can’t recover from this (points that expire and are not replaced are gone), this is safety net only for the company, not members.
Usually a ponzi scheme admin just cut and runs, here the members (who invested most recently) lose out.
I really don’t know why you keep bringing this up… whether they do or don’t is irrelevant. They guarantee a 90 day ROI (positive or negative is irrelevant), that is what’s important here.
Finally.
Thankyou for acknowledging that like all Ponzi schemes ZR is going to inevitable crash when new investments can’t cover the returns that need to be paid out (or “coming down” as you put it).
That wasn’t so hard now, was it?
@Kasey
The profit share doesn’t pay out points, it pays out cash (based on the points you have). This cash is then re-invested in more bids then blahblahblah the end result is they become new points to offset the ones lost each day.
This is the daily re-invest process for the scheme. The daily re-invested points still have a 90 day expiration. This is problematic in that ZR need to keep on re-investing and ideally grow their balance over a 90 day rolling period.
How do they do this? They do it from the ROI ZR pay them each day. Thus the ROI needs to grow too to cover the increasing number of bids required to maintain an ever-increasing point balance.
Problem? Zeek Rewards doesn’t have an ever-increasing revenue source to cover these required ROIs.
I’ve been banging this drum for months now and all I get is ‘Zeek has lots of customers’ or ‘Zeek is compliant!’ or ‘Zeek has lots of revenue sources!’. People don’t seem to realise that mathematically Zeek’s revenue isn’t indefinitely going to grow, it doesn’t bloody matter!
I believe most people will answer “no” to the first question, if your idea was to invest most of your lifesavings? Some of the others may have more detailed advise. I started to say “no” already in January, but ZR is still around and has continued to grow.
For most participants it’s probably “business as usual”, as an answer to the confusion / not happy question.
Chang, the points earned as profit share expire as well, 90 days from the day they use them to purchase more bids. Otherwise that cash sits in your account and you earn no profit on it.
10,000 bids earns 150 dollars on Jan 1. Paid out next day. expire 90 days later on April 1. The 150 new bids purchased on Jan 2, will retire on April 2 and so on.
As these numbers accumulate the repurchase gets larger. As that pool increases your income increases too.
As you pull income your ability to repurchase is reduced by whatever you did not use to repurchase. This creates significantly smaller growth by the time you calculate your point retirement numbers.
The bid retirement system works in the same way only in reverse.
You decide you are done and want to cash out. You begin 0% repurchase. You can only pull out your daily growth and no more. Your purchases from 90 days earlier retire and are comparatively smaller than the repurchases you made later.
Because you did not repurchase your share of pay from the profit pool reduces by the number of bids that retired. The next day your income goes down and you retire the next set of bids you had purchased 90 days earlier. This will be a larger bid purchase than the first and and it will go on with this compound reduction process until gone.
When your paycheck gets very small the larger the number of bids you will retire. This creates an incredible liability reduction mechanism for ZR and you have recovered every bit of money and effort you put into your business.
Even if the market does plateau this mechanism will at worst provide for a soft landing. If all business stops it will shut down like any other in a BK and many will lose. Again this does not make it a ponzi it makes it a more typical business.
One of the major reasons for a crash once the ceiling is reached is that this “pool” is made up of virtual investments. If you’re re-investing, ZR don’t actually have to front the money.
They just give you virtual currency bids which you then convert into points.
When you want to cash out they have to front the money… and if it’s not there – Kaboom!
This might be the case if you decide to cash out, but what we’re talking about is the company reducing the daily ROI so you have no choice.
There is a difference.
B U L L . S H I T
If you are going to lie out your ass, at least make it looking convincing and use examples from actual auctions. Looking at the last 10 days of auctions:
– There are no auctions that ended in $13.67 nor $26.34.
– There were 3 auctions that ended in $7.63, but none of those are the items you mention:
– There was only one Wacom Fun Tablet auctioned and it went for $199.99 and 1 bid and no history (strange):
– There were 2 Northern popcorn machines and none at $7.63:
– There were 6 iHome Speaker System (3 models) auctioned and none of them were for $26.34:
If you’re going to make shit up, at least put in some effort. Not everyone who comments here is as stupid as you think.
Betty, this is a “business” and entails all the common risks of a business. It is a relatively new twist on an old business model and appears they have done a great deal of work to make it fly.
As this is a new twist, no one can say exactly how the regulators will react to it. It is a heavily regulated industry and politics today could certainly play a part in the success of the business.
Do your homework, try to listen to these people’s concern with an attitude “this is just a place to begin your research”, and “it is easy to criticize not so easy to analyze.” but do not take their opinions as fact.
As with Chang he did a great deal of work and math and it is clear he is an honest guy, however, in his last post to Benjamin he made it very clear he missed a design point that was critical in his calculations leaving him to some faulty conclusions.
This is nothing bad about Chang, or anyone else on this sight, just that opinions abound and facts are few.
If you are not in a position to lose the money you put into your business I would say it is not a good idea for you. I would suggest this to anyone going into any business.
If, however, you can honestly say, “It wouldn’t wipe me out if it fails and I lose my $10, $1,000 or $10,000, and I think there is a reasonable opportunity to profit” .. I would then tell you it is worth the shot. I would tell this to anyone going into business.
Most people can afford $10 per month, a very small risk, to try it out until they can get a feel for whether it is for them or not. DO NOT start at $10,000 if you are not absolutely comfortable with the ZeekRewards business.
Chang, I see your points above, isn’t a sudden stop in business the model for all BK’s thought. Seems a pretty severe analysis.
So nobody can identify an indefinitely increasing revenue source within ZR needed to sustain the business in the long-term?
Ponzi scheme, done and dusted. Thankyou.
Quite the explosion Jimmy, didn’t see where he said he had won them in the last 10 days though. Did I miss something or is that all the info you had available on ended bids?
Oz, you look for an infinite answer to a finite issue and do not do the math and because you do not do the completed math you can find no answer. Over and Over again …
Yawn, now it’s the ‘you just don’t get it’ argument. Meanwhile still no identifiable indefinitely increasing revenue source?
Check and mate son.
I suppose in a few days another ‘fresh out of ZR compliance school’ member will find BehindMLM and we’ll have the same discussion, arriving ultimately at the same conclusion:
Unless someone can point out an infintiely increasing revenue source, Zeek Rewards is an unsustainable ponzi scheme. Period.
Cheers.
Oz, until you can identify this mythical infinite increase in points that you love to talk about, the Yawn is yours. Just like your rather odd definitions of passive and business investments. You demonstrate an unwillingness to acurately analyze and then spout as though you have.
Does this make you feel wise? Have you identified the markets, the income streams, the accurate working model of the bid system, the whole thing, not just your pick and choose because you can’t or won’t do the math?
How is is all day we have had civil conversation and then when your buddies show up you pull out the snotty? I can tell you are more intelligent than that but ….
Define for me, without the flying snot how ZR has an infinitely increasing liability with no income streams to back it up.
Show me what those income streams are and how those markets apply to ZR.
Show me the point at which ZR has no control over its payouts and liabilities to the point of losing all income.
There is a big yawn here for sure … especially when you quit talking and start sniping.
Seriously…?
You’re seriously going to ask me to identify whether or not ZR members mathematically aim to increase their points infinitely or not?
When you make an investment, do you settle for a negative return, do you want to break even or do you seek to increse your return?
Anything less than an increase in any given 90 day rolling period and ZR members will en masse switch to 100% withdrawal.
This liability isn’t a financial liability, it’s a sustainability liability. A liability that has to be met, otherwise members withdraw and flee.
So I ask you for the umpteenth time, please identify an indefinitely growing source of revenue that Zeek Rewards has.
Once members start 100% withdrawing, Zeek Rewards is over.
If Zeek doesnt cap their affiliates and auction revenue doesn’t increase at the same rate of new affiliates then wouldn’t they have to use the invested money and monthly fees?
Seems like their revenue is staying the same with the increasing affiliates and it had to be a ponzi. No need for math in my opinion.
What an amazing concept, you lose money and you close the doors on your business! If you looked to the design of the point retirement system it would take a mass exodus, no income stream and no hope to recover.
Even with that, in that exodus you would have to assume the company has no income or reserve or reserve equivalents to compensate for a negative cash flow for 90 days. I believe the word “stupid” would apply to any business that did not take this very minimal precaution.
An added protection is that while they still have cash flow to the company, their liabilities reduce as points retire and payout reduce themselves exponentially. You really Oz, you are taking an incredible leap to assume all wihaven’t analyzed this at all have you?
All this while you are assuming the income streams can’t actually carry the cash flows needed for payout, while every rep resigns. I am sure the average business could survive this too … talk about unreasonable assumptions! Guess no body should go into business, they will all be ponzis!
Oz, you assume that everyone will bail at once, the income from outside sources has no value, that cash reserves don’t exist, yet, you know nothing of market saturation numbers on any of the income streams, don’t even know the income streams and then you speculate as to what happens if everyone bails at once and no product will move … what MLM would survive that scenario? What business would survive it?
Now if you analyze the back side of the retirement program you will identify two things … one there is no infinite income growth or infinite bid accumulation possible unless you never intend to make a living out of this program. And two, this company will grow to as large as the market is willing to allow it through (like any other business) purchase or products and services from the company. Profit Share.
If the returns dropped to 2 or 3% per month it would be crazy to leave, 24% to 36% per year! Are you kidding me? That is better than most business do ever and with far less work and liability! Some will go and some will stay taking away much of the panic scenario you describe.
I have to hit the hay Oz. Thanks for the conversation, it has been very enlightening. Run the numbers and see if I might actually know what I am talking about.
That’s precisely what happens when a Ponzi scheme collapses.
If they did, they wouldn’t have gone negative in the first place. When 90 day rolling bid balances go negative, it’s too late.
Well that’s all very good for Paul Burks and co, meanwhile members get screwed? No worries.
They can’t, because the cash flows needed is ever-increasing because everyone’s point balances are increasing (remember that a negative 90 day rolling growth would trigger a max exodus of withdrawals).
1. Nobody is sticking around whilst they are hemorraging bid points because ZR can’t pay out enough daily so that they can purchase enough bids to at least maintain their balance.
2. Regardless of where the income comes from, it is not indefinite. Thus the ROIs will eventually hit a ceiling and boom crash opera.
Oh dear… let me introduce you to the infamous 80/20 model.
Except that “any other business” doesn’t have to pay out consistently larger ROIs to stop members fleeing and crashing the company with withdrawals because they can’t maintain VIP point balances.
When you take into consideration the 90 day expiry, calculating annual ROIs becomes a lot more complicated. Moreso when you consider that not everyone has the same VIP point balance. ZR has to manage and maintain ROIs to sustain the point balances of all members, not just one.
That is too simplistic an analysis. While you might encourage new affiliates to join for 2-3% per month, you have two problems:
1) You won’t get nearly the same growth rate as the “excitement” on 2-3% per month is a lot less than 80-90% per month.
2) Zeek still has to pay out the high VIP point balances of those that have accumulated bids up to this point. So this 2-3% per month that Zeek is paying out is on the sum of the virtual points that have accumulated over time, and not just on net new investments.
Finally, in all practically a 2-3% per month offering will fail miserably because there is no compelling story. Do you think people will buy into Zeek if you change the “80/20” cash out scenario to the “99/1” scenario? Good luck with that.
So I fix the math and try again.
Invest 100 on day 1
On day 90, you have 381 points. Okay so far?
On day 91, 100 expire, so you have 281.
With the 1.5 expiring at end of day 91, you end up with 281*1.015-1.5=about 287
If you work out the math to 180 days, the answer is 587, plus or minus a few depending on how many decimal places you carry the results from day to day.
If you work it out to full 365 days, the answer is 2201.
If the profit share is 1%, even at 100% full reinvestment, you start to LOSE VIP points about day 140 (i.e. the interest cannot offset the expiring points)
The math indicates that the profit share starts to hit 1.2 or 1.1, it’s time to bail as fast as you can.
The overall point of the analysis:
The daily profit share means the points grow, which may or may not be actual profit growth.
Let’s speak of a theoretical scenario: say there is, well, 150 million VIP points, TOTAL, of all members all together. (back to that 200K members, average of 750 points again)
At 1.5% growth, after 90 days, that 150 million points would have grown at least by 150%, even with expiring points, if you take the above example: 100 becomes 281.
So 150 million points becomes over 400 million points, WITH expiring points, assuming 100% reinvestment.
Even if you assume cash out of say, 80/20, you’re still looking at roughly doubling of the points.
What basically happened is those with small balance of points are encouraged to keep paying into the system (buy bids) so they suffer a net loss. While those with huge balances can afford to take money OUT of the system (their point balance can provide enough cashout and maintain balance or even a slight growth).
The net effect is transfer of money from later joiners to early joiners. That’s why Oz is calling it a Ponzi scheme.
I seem to have skipped a paragraph or two in there.
The point is, unless the big point holders are letting their points expire (and they’re not), as all are maintaining their point balance, if not a growth, the pool of overall VIP points is steadily increasing, even WITH the expiration of points.
Can the profits keep up with the growth?
Logically, no. We have no figures on what is the overall points in the system, but I would not be surprised if it is doubling every 6-12 months. Clearly, profits can’t be doubling every 6-12 months to keep pace.
(furthermore, if it’s this profitable, why have ZeekRewards at all?)
@Spreadsheetguys
Try to separate real money from virtual currency in a spreadsheet, and see how the economics works out?
Most of the 50 previous comments here about calculations, “internal business model”, revenue, etc. are mixing virtual and real currency – a method that is absolutely meaningless in business, and it doesn’t help to be clever in math either.
I can honestly say that the best thing I got from ZR was enjoying the dialogue on this site (note: it’s a site, not a sight). I have a small ‘investment’ in ZR in terms of money and I’ve got that back and am about to receive a modest profit in the next few weeks. Given the investment in time I’ll stick with at a 90/10 ratio until I think it’s all gonna blow and then hit 100pc cash out if I’m not too late.
For what it’s worth, I think the questions come down to this:
Is ZR legal?
Is ZR sustainable?
Is participation ‘moral’?
I don’t think questions are being raised about ZR being scammers with regard to paying affiliates or other such worries, except, of course for the stories about certain countries being excluded. More on that later.
And my responses are;
Doubts have been raised about the legality, but I’m hardly enlightened by this site on that. I remain confident that as a foreign affiliate with no 1099 issued etc that I have no personal worries.
I think Behindmlm.com has convinced me that the business model is not sustainable. At least not in its current form.
Moral? This is such a ridiculous question I really shouldn’t have asked it. But I went into this business on the understanding that I wouldn’t have to, and I haven’t, recruited anyone. Given I believe it’s not sustainable it’s not right for me to sell it anyone else as if it was.
Anyway, I’ve spent more time in the last 8 months reading the entertaining discussion on this site than I probably should have and I’m fascinated by this industry and what sort of people are involved.
And I’m extremely curious as to why OZ et al set this site up in the first place. I’d really love some explanation for that. I’m not suggesting some sinister motive or anything, just a raisin d’etre – a mission statement or something.
Anyway… everyone, please keep up the chat. I love it.
Try the ABOUT-page? It started with some articles about Liberty League International in Australia, summer 2009 or so, on another blog.
I’ll guess this website was set up in order to avoid ruining the other blog with MLM-stuff (because of hyperactive comments drowning all other comments).
The meaning of this was “Add 2 columns in your spreadsheet, ‘Money IN’ and ‘Money OUT’, where you can separate the real money from the virtual”.
“Spreadsheetguys” are the ones using calculations in their arguments, rather than plain logics.
“VIP Points” is only a virtual balance, just some numbers on the server until people starts to exchange them in money. They don’t become unsustainable in themselves, they becomes unsustainable when enough people starts to withdraw them as money – when real investments no longer can support payouts.
When separating real money from the virtual, it’s also possible to detect that reinvestments don’t contribute to revenue and profit – unless bids are sold for real money.
IMPORTANT TO NOTE
ZR affiliates needs to keep an eye on the number of paying customers, and the number of new affiliates recruited. These are the only ones that brings fresh money into the system. I didn’t bother to calculate any additional income sources, since most of them are unknown to me.
Affiliates spending tons of bids on the auctions is not a positive sign. Their bids won’t contribute to the real revenue and profit, or to how able ZR will be to pay. Often they will make the auctions become less attractive to real customers.
A1: ZR *may* be illegal, esp. before all the “hush, it’s not an investment” campaign. Now, it’s still quasi-legal, as the structure essentially is a Ponzi scheme fed with profits from an auction site so it doesn’t collapse and the top members may even enjoy a net gain.
They could avoid the legal scrutiny by killing the MLM aspects completely and still be profitable by simply paying affiliates a straight commission for promoting Zeekler.
However, it’d look MUCH MUCH less attractive as everybody would be paid, instead of just the people who joined early and is reaping most of the benefits, and the people who joined late are only reaping VIP Points (which MAY be worth something… if they can collect)
A2: Sustainable? Depends on how the Zeekler business goes. If Zeekler cannot pump in enough profits to keep the scheme afloat the whole thing collapses overnight.
A3: That is a question that’s depending on each individual’s moral standards.
ZeekReward’s main innovation is starting a legitimate business, then planting a parasite MLM on it, so it basically is sucking money from it and feeding it into the top participants (which includes many of the top execs, such as Dawn) while most of the late joiners are suffering losses and need to recruit new members and/or buy bids in hopes of raising their “level” (VIP points) so it can get some net GAIN instead of net loss.
The overall business model is a quasi-Ponzi scheme that may not collapse if Zeekler remains profitable, as it has more than one source of income instead of purely depending on member fees.
However, the NET EFFECT is still moving money from late joiners to early joiners and late joiners recruiting even later joiners to prop themselves off the bottom.
just commenting on my auction winnings in question Just show I can show that OZ the genius is really a jackass popcorn machine auction # 17758 $7.75
auction # 24828 flip slide camcorder 30.63
auction # 24843 IHome speaker system 24.17
auction item # 24882 Wacom tablet 13.02
How about you get your facts straight before you call (in your words) Bull Shit you jack ass
You said:
But the auction #17758 you gave:
– Sold for $7.75, wrong price
– User name was “bci”, Is this you, or do you have multiple accounts against Zeek rules?
– Auction #17758 is how many months old? You said “I just won” and so I searched the last 10 days of auctions and noted that in the original reply.
– You said it was a “falling price” auction, #17758 was a premier 10 auction.
TRY AGAIN.
The other aucitons are falling price withou the screen shot the user name and final price aren’t available. But based on your very first claim of the Northern Popcorn Machine being a blatant lie, I have to say:
B U L L . S H I T !
Hey Jimmy did you know that the sky is blue. If you couldnt tell I was being a little sarcastic when I was talking about my items I won. But I see with you I need exact price,time, blood type, and shoe size.
But hey on a serious note why are you still part of Zeekrewards. If you believe that zeekrewards is a ponzi and you are still in what does that say about your character. And if you continue to stay in and it is found to be a ponzi should you not be charged to the full extent of the law.
So just to be sure are you admitting guilt that you believe zeekrewards to be a ponzi and if you do are you willing to forfeit all future benefits from zeekrewards and its affiliates.
I just do not understand how someone can be part of something that they completely believe is wrong. I call Bull Shit on you
@Ben
Please, if you’re caught out blatantly lying as you have at least own your lies. The ‘lolz I was just kidding’ routine is yet again another cop out.
So are your attempts to deflect the attention from being caught out lying and deliberately trying to mislead others onto Jimmy by questioning his membership in Zeek Rewards.
You failed to take into account just how much data is collected on Zeek Rewards and Zeekler by readers here for analysis and when you tried to pass off blatant lies, were quickly caught out. I know you’re new here but we’ve been discussing and tracking ZR and Zeekler for a while now.
Making up bullshit in an attempt to reason it’s not a Ponzi scheme won’t get you very far. In fact all it does is completely kill the argument it’s not dodgy. I mean hey, if you have to lie about it and everything obviously Zeekler isn’t as legit as you’d like people to believe.
Do you
feed sarcasmlie to your customers when trying to sign them up too?I’m still part of ZR because it takes 90 days to cash out. As soon as I started participating in the analysis here and reached the conclusion that it is a ponzi, I switched to 100% cash out.
It’s brilliant that 90 day requirement, isn’t it? You can’t just take your money out like you could if you had money in a bank or stock brokerage.
But since it takes 90 days to fully convert virtual points to cash, plus 2-week drag to get my check, I’ll be an affiliate for a little while longer. I’m not the only affiliate cashing out.
Remember, 90 days is a long time. When the ponzi collapses don’t think you’ll have the lecturing of slowly withdrawing at some reduced profit share rate. It will likely end like it did for ZR affiliates in Serbia, Slovenia, Belarus, Egypt, Croatia, Macedonia.
@Ben if you want to spit the dummy do it elsewhere.
I’m just wondering what is the MLM software/script that ZeekRewards uses? Is it off-the-shelf MLM software that I can get somewhere?
Thanks. =)
@Andy — Put out a project on FreeLancers or eLancers and see who bites. I’m sure you can get someone to recreate it for about $1500 (or less).
I was surprised by the ways those huge earners of the MLM companies are fighting to defend MLM and put down zeekrewards.
No matter the way, you call it, zeekrewards seems far a way better for me than all of the mLM companies in which I have lost enough time and money by following the plan of few of those who have succeed while the majority has failed.
Who cares about the name you give to zeekrewards if it continues to change lives of so many accross the world including myself and my friends. All of thes is becuase we are in the usa, that is why, I relly much more on other companies outside the usa law where all of those haters pretending they are defending the law, hiding themselves behing goverment entities and rules to keep the majority in legal slavery, miserery and poverty, modern exploitation by selling high cost products that most of us can’t affor to buy.
With zeek, I have got all the money that I have lost in so called legal MLM such as amway, monavie, xangos, herbalife, versalus etc. They all can shut down if it was for me while I will pray for zeekrewards to stand strong against not only your cyber attacks and your illegal unproven diffarmation.
No matter what you said or done, zeekrewards is moving.I would better lost my money that away other than putting my money in those legal ponzi scheme that often make people waste time and money. You only wish that you would have been the owners. Haters and failures.
You do not want to see the second class who have already lost enough emerge from the poverty to sit down on top with you.Looking at you face to face while we are driving the same car, while we eneter the same neighborhood because we both now can afford that with zeekrewards.
You can’t stop Zeekrewards phenomen.It is too late.It is just like those who are fighting to say that God does not exist.You will die and Zeek will stay.
Here’s the problem with your comparison and Zeek’s business model. If these other MLM’s you listed have a slowdown in new members or retail sales, or even a flat plateau (for every distributor that leaves, a new one joins), these companies will remain in business for a long time and distributors will make money for a long time.
This is because these MLM pay commissions based on real sales; their bonus pools are created from real revenue contribution of retail sales and autoship to current distributors.
Zeek Rewards, on the other hand, is an investment ponzi so when the investment income slows down or plateaus (let’s not even consider declining revenue, let’s just assume the same revenue every month as past months), then Zeek will fail because it cannot pay out ever increasing point balances without ever increasing revenue, i.e. investment from new investors.
That’s the big difference, and that’s the key issue with the business model being illegal that Oz highlights in this article.
There are no real sales and the real money is what members put in. Free members are paying with fake money. Better try to get what you invested and run
And this is exactly what Troy Dooly fails to see. How Troy can not see this very obvious issue is baffling, unless he purposefully chooses to ignore it. Troy calls Oz out on this negative article, but no one single person to date has been able explain what happens with Zeek Rewards if the incoming revenue plateaus or declines.
I like that idea of looking at a revenue plateau where the company receives the same revenue every month and approximately the same number of distributors (some new ones join, some existing ones leave, but the overall revenue and number of distributors is about the same). Every legitimate MLM would past this test.
Zeek Rewards would not past the test Jimmy proposed, because there is not even penny auction revenue to support it, regardless of what the marketing and “opportunity call” lead you to believe by talking only about the penny auction. Yet affiliates recruit only for the investment and ROI – they just use different synonyms for the words “investment” and “compound interest”.
Interesting contrast, and I wish Zeek corporate would just address this issue unless there is no good way to spin the answer.
I want the truth,
JC
Folks can’t we all just get along?
ADVICE! Attention ZR members who is drawing near the 90 day deadline. Take your intial investment out and let the profit ride. Make the most money you can now while it is still HOT, but don’t be greedy.
I posted this on Troy’s blog too. Normally I do not cross-post but comments are very relevant to the NMBJ article.
Troy,
The concept of a “customer” for Zeek Rewards is not the same as that of other product based MLM’s where there is a real transaction (and real revenue) between the MLM and the retail customer. Most “customers” in Zeek Rewards are either:
1) Fake customers created by affiliates. Affiliates create fake customers in order to give sample bids away in order to earn an ROI on the money used to purchase those samples bids.
or:
2) Incentivzed virtual customers that were paid for by the affiliate. The affiliate has never met this customer, doesn’t know the customer, and doesn’t even have an email or phone number to perform sales follow-up (contrast this with any product-based MLM where the distributor actually communicates with a customer or prospect).
The are customers that are provided for a fee, previously by Zeek Rewards directly, and how by one of several third parties that have cropped up because it is so easy to “become a customer” (all you need is an email address, not even verified, with no actual login required).
The legitimate third party providers are using CPA email submits and charging affiliates $3-5 per “customer” and then paying the CPA companies around $1.50 to $1.80 per submit. The less legitimate ones are using odesk, mturk, or using opt-in mailing lists for “customer” fulfillment.
If you were Amway giving away sample products, or Visalus giving away sample shakes, or a drink company giving away sample drinks – in none of these examples would the MLM company consider those receiving samples “customers” but instead “prospects”. Isn’t this customer claim inflated?
Doesn’t it make sense for Zeekler to verify an actual free customer (and affiliate) by email so yo know at least the email is live – regardless of whether the customer ever actually spends money or not, you can at least confirm that the user’s intention was to actually receive the sample bids.
Some ideas for further clarification:
– Ask ZR what the ratio would be if you actually counted “customers who have logged in and placed a single bid in the penny auction at least one time?”
– Ask ZR what the ratio would be if you actually counted “customers who have spent money buying retail bids and are not affiliates”?
I think you will find the ratio of what most would agree as a proper definition of a “customer” to be MUCH lower than 25-to-1.
JC
The 25-to-1 customer to affiliate ratio is meaningless.
I just ran a report on my backoffice. I have 28 customers that I paid for using the 5cc (to dump bids to), and none of these 28 customres ever purchased anything. Many affiliates in my upline and cross-line have reported similar experiences. Those in my upline with 200k or more points have hundreds of customers.
I never believed these were “real” customers, and didn’t really care. I only wanted to invest money and earn an ROI passively. The whole charade of buying a customer from Zeek Rewards using the 5cc was just part of the game.
Visalus has a 10-to-1 ratio because they have a real product (great tasting weight loss / meal replacement shakes) and a great marketing plan around the “90 day challenge” (they didn’t invent it, but they perfected it).
A lot of people sign up for the 90 day challenge, often pressured by their friends who want them to join the MLM, but relent and attend the introductory meeting anyways because who doesn’t want to lose weight? It’s a great marketing strategy with lots of proof from people posting pictures of fat-to-good-looking in 90 days.
Not everyone sticks with the weight loss program (like with any weight loss program not everyone succeeds), and not everyone decides to become a distributor. But many do continue to buy the retail product.
The push to become a distributor is that if you sign up 2 people, your monthly meal replacement shakes are free (great marketing approach because the product is in demand and valued by the customer/affiliate).
So with Visalus you have real customers where you can see the value in the recruiting/sales process, there is real value in samples that are given away, and retail customers will buy the product alone without joining the MLM.
With Zeek Rewards, you have none of this. Customers are not real customers. There is no contact between affiliate and Zeek-provided free/fake customers. The affiliate does not bring customers to the MLM, the MLM provides them for a fee*.
The value of the “work performed” by each affiliate is negligible if not outright worthless. The only thing valuable to the MLM is the investment dollars affiliates bring in, i.e. classic investment-recruitment-ponzi dressed in virtual points and compliance rules “we are not an investment, do not say the name ‘Voldemort’ else you believe he exists”.
If you are going trumpet the wow factor of 25-to-1 customer:affiliate ratio, you should also look at the customers-who-have-spent-money:customer ratio. From my experiences and conversastions with other affiliates to date, that ratio is at BEST 1:100 (meaning best case is 1 in 100 retail customers actually spend money with Zeekler).
* The process to get the free customers a little different now than with the 5cc, but you can still get unlimited free customers, plus there are many providers of free customers now building a cottage Zeek Rewards fulfillment niche.
Most zeek reward affiliates must realize that very limited amount of dollars are being bought as bids into the zeekler auction over the past year regardless of the size of their downline.
What it basically comes down to as in most instances is CONFIDENCE. Before any individual,watchgroup advisors or government agency or myself proves they are right about their views on ZR, the members will decide its fate by setting their daily vip points to 0 percent.
so is it a scam or not?
What about the “Rex Venture Group, LLC” they want you to send your money order to?
@sheeba
Rex Venture Group LLC is the parent company of Zeekler and ZeekRewards, as far as I know. In a normal and legal business, the parent company doesn’t have to get involved in financial trouble in a daughter company.
In this case, they probably will be involved as a responsible party, even if they have made agreements to protect themselves.
I asked the same question a couple months ago. I doubt there ever be a financial prospectus. What I can say in out most confidence the company does not produce enough revenue or have enough customers purchasing retail bids to sustain all of the daily returns it gives it esimated 300 000k affiliates.
What it does have in its favour is new memberships and monthly memberships. But after the first 90 day the current members can usually cover their membership fee from transferring points to cash to pay the fee so this isnt even generating revenue for the company.
I will go out on limb and say the management at Zeekler had maybe good intentions, but put way to much hope into the penny auction and after a year now realize that the business model of people buying bids and not winning anything is not good repeat business and the aspect of giving free bids is now more of a recruiting scheme for new members money.
It often starts with good intentions, in combination with onesided thinking and a lack of contact with reality.
If you read some of the old stories from FSC-store affiliates, you will see that the business idea didn’t work for the affiliates (as business owners).
Having an online shop doesn’t have to mean you’ll make any money, and having a mass-duplicated shop makes it even worse. I’m not talking about any Network model here, only about the shops.
Sheeba, it depends on WHY you’re asking. From a morality viewpoint it was probably good intentions and bad business decisions. Bernie Madoff did probably START with good intentions, too.
ZeekRewards are already within their last few days/weeks/months in business, and have escalating problems. It’s not a well planned business anymore, and it hasn’t been well planned in the most vital parts from the beginning either.
What about the 1099’s people received without even being able to pull out a dime (they were under the 90 days). What is the tax liability on a person who invests $1,000.00 and then do all the math I read about above.
I understand constructive receipt but if it is passive income also won’t alternate minimun tax come into effect and people will be paying thousands of dollars on virtual money as someone coined the term.
Is there anyway during the year to have a good idea of where you stand? I heard that some people who got 1099’s said that they amount was very different than what they thought it was going to be.
How do you fight that type of thing. Zeek does not seem to reply to emails very well.
I’ve love to see some 1099’s from ZeekRewards members vs. how many VIP points they have (approximately) and all that. Leave out the important stuff like SSN and such.
I wonder if ZeekRewards are “cooking” the books by making every last bit of VIP ProfitPoints “income” (which makes it deductible on THEIR end) which would make all the “bids are deductible” argument moot as you trade bids for VIP profitpoints.
@ofonemother
Basically you are liable for any money coming out Zeek Rewards. Whether you re-invest it back into VIP bids or not is inconsequential. If they pay you out a return it’s taxable.
The whole issue of 100% business expenses is a mess that’s going to be sorted out when the IRS start processing ZR affiliate’s recently filed tax returns. I expect this will be clarified over the next 6 months as people start to receive audit notices or get their returns processed with no issues.
This blog is amazing & full of internet marketers that are haters because they make peanuts in other mlm’s & can’t stop the growth of Zeek Rewards. The numbers and bs spilt here is sickining and really you should just join as you will succeed with zeeks rather than fail selling lotions & potions to your friends.
Start understanding how Zeek Rewards works before talking. Also remember they are incomplete control & already announced that eventually they will cap everyone but don’t know what the cap should be as of this moment.
So if we tried using your numbers about people earning and growing at 80% forever eventually zeeks goes down…Sorry …YOUR WRONG. Zeek Rewards puts a cap on the points and guess what we are back in business.
If you think this company is easy in any manners wait 100 days and see that people make money but never take out a 100%. They start losing bids left and right & if they havn’t built a team or worked they make a profit but not nearly what people are thinking.
Zeek Rewards is amazing and changing lives including my own (Just purchased a new house) around the world. Won’t be visiting or reading any of this garbage anymore. Good luck in Amway ya clowns
@haters
Stop and think about this for a second.
Why would they need to put a cap in place? Because the payouts are too high.
Ok so fair enough they cap people.
(a) what happens to the people who are way over this cap balance already?
(b) what happens when enough affiliates hit this cap that the overall payouts equate to the payout level that triggered the cap in the first place?
Are they just going to continually reduce the cap until it’s theoritical limit (0)?
Don’t get too attached… I’d hate to see it repossessed.
Never paid attention to mlm before I was told to sign up to Zeek.
Zeek needs to continue to grow just to sustain itself, without more investments it will collapse.
I seriously doubt that.
This site is the only differing opinion on Zeek that I can find.
All the rest are bought out cheerleaders.
Quibids auction kicks the $hit outta Zeekler in every way imaginable. They would be more successful if they emulated them. Way too many bids in circulation.
They also need to have customers with verified email addresses to try and counter the fraud.
It is interesting to note that instead of defending Zeek, your first action is to attack Zeek critics with an ad hominem attack.
The rest of your statements are solely your personal observations that in no way proves your own position, that people who disagree with you are stupid.
The conclusion is you debate poorly, about the wrong topic.
I agree, the Zeekler Penny Auction is a joke! They show pictures of iPad’s and MacBooks, but the items up for Auction are toaster ovens, lego sets, a bottle of perfume etc…
If you want that crap, just go to Ross Dress for Less or Marshals instead looking at your computer screen for 4 hours!
Just go to amazon, every product they auction comes from there.
But if you buy from amazon you get free shipping and get the item 3 weeks earlier.
Thanks for being one of the few non-cheerleader sites out there. Looking for some objective information, or even a saucy debate, about zeek rewards seems damned near impossible with all the shill websites out there…
My eyes are about to fall out of my head after reading all the posts, but my take-away is that only one pro-zeek poster mentioned anything positive about the penny auction aspect of the business… most others were simply selling the vast riches of membership.
This sounds like the core product (bids) is linked to a single mediocre (being generous here) auction site. So, the one part of the business model that should be solid turns out to be sub-par (the auction), and the rest is driving new membership rather than bringing something of value to repeat-customers.
Calling it a redressed ponzi scheme may or may not be going too far; however, zeek rewards is (at the very least) gift-wrapping a turd.
Those using the word “hater” for anyone that questions or critiques their beloved MLM: “You keep using that word. I do not think it means what you think it means.”
hater… I think today’s Dilbert is VERY ontopic.
http://www.dilbert.com/strips/comic/2012-04-30/
Oops, that should have said “on the subject of hater”
What is the hold up on zeekler compliance course. Do not want hear the same of it being too long and needs to be revised and shorter length for the members. Or is it nobody wants to be associated with it and you cant reword our way out of an illegal business model that easy.
The cynical view in the absence of any information from Zeek is that they realize requiring compliance would kill new member growth.
They already announced changes to the compliance course after “beta testing with some leaders” (but I don’t know any leaders who were involved), where the supposed feedback was that the course would chase away the passive affiliates (i.e. the ones using Zeek for an investment only and not recruiting anyone).
So Dawn on a Feb weekly leadership call announced they would have two courses – one for “normal” affiliates and one for “power” affiliates, where the power affiliate is one who does a lot of recruiting.
Meanwhile, no other details have been disclosed that I am aware…
Q: How do you make a Ponzi scheme compliant?
A: Tell everyone to stop using the word ‘investment’, announce a pending compliance course, never release it and pay a bunch of lawyers to do nothing.
I’m weighing the pros and cons about zeek rewards after being approached by a trusted friend of mine.. so far all the articles point towards zeek being a fradulent scam. i laud the website for presenting points to argue upon.
It would have definately made it easier for all of us, and probably this discussion wouldn’t have taken place if Paul and his team did publish the pool of VIP bis as well as their profits.
But What I wanted to point out that the Nay sayers, the people who have so publicly denounce Zeek Rewards in this website, under different zeek articles revolves around 3 people, K Chang, Jimmy and Oz. Is there an agenda/alliance around these three?
I do see one or two defending or denouncing ZR once in awhile but you guys are practically here. I do not see the point. If it is for the greater good to expose the scams and ponzi schemes of MLM companies I think the points argued upon would have been sufficient and let the believers and foolhardy people repurchase all they want and argue all they want and make themselves look stupid. The article itself should have been sufficient.
But what it seems like here is that is taking all 3 of you a lot of effort to defend your findings. it’s like 3 against the world. It really does have a reversed effect.
So many people joining ZR and having faith in it but a few nay sayers. There are bound to have people who are not comfortable with something like ZR, not everyone will agree with it. But like i said, the more you are trying to defend something, the more it looks like you guys are the extremist on the wrong end.
It makes me think, normal people would have given up otherwise. Why is this the only website that is publishing damaging articles about MLM, specifially ZR?
If remember correctly reading a post from one of you about April 17th where we will see if Zeek Rewards, Paul Burkes and his team will land in hot soup because of the IRS. Well it’s way past the fore mentioned date now.
Was there any issue known? I have been keeping track closely but i have not seemed to see any repercussion on them. When will either of you lodge a report about the company?
I wonder, in the wake of a big meltdown since the sub-prime, berni madoff , raj rajaratnam and all the financial scandals, you’d think people would have been a little more careful with their money. now these 3 cases has nothing to do with each other or ZR.
It seemed however that ZR is getting more affiliates instead, and spreading like wildfire if i care to add. IF this was a money scam, playing on words like “repurchasing” instead of “reinvesting”, wouldn’t this be a a ponzi scheme and automatically a self destruct button to raise the alarm for FBI, in the wake of those scandals?
In the case of trade embargo where affiliate’s accounts were shut down: working in an American MNC, I know how strict the US government is with American based company and isn’t afraid to persecute anyone caught violating the embargo, even if it the violation is outside the territory of the United States.
Was it just hogwash for Paul Burke or was it complying with the laws set for American companies? see this:
http://news.google.com/newspapers?nid=1817&dat=19980801&id=szsdAAAAIBAJ&sjid=O6YEAAAAIBAJ&pg=6774,22161
Above all the negative images painted about zeek and having no ZR affiliates coming up with something constructive enough of a rebuttal, why hasn’t the authorities swooped down on Paul Burkes?
Out of curiosity, did any of you 3, Jimmy, K Chang, Oz manage to lodge a complain, or send an enuiry with the US Dept of Commerce and FBI? the fact that the Zeekler and ZR has really nothing to do with each other as you three have stressed, and disregard the fact that Paul has a 15 year reputation to protect, what are the authorities doing about ZR and it’s ponzi scheme?
@KaChing
No.
Often when it comes to money, common sense goes out the window and people want to believe.
Looking at the business model proves anything but and the resulting discussions ensue. They often in themselves further clarify additional points for people and offer a broader picture of the topic the initial article covered. In that sense they are welcomed and encouraged.
Interesting choice of wording. The business model and analysis stands on its own, pretending like it needs defending is just an attempt to obtain a specific toned answer.
One you’re not going to get because it’s a loaded question to begin with.
Irrelevant.
Agree with what? The business model makes no sense and strongly lends itself to being a Ponzi scheme. Naysayers and disagreement?
Please.
Nope. April 17th was when tax returns are due. Once the IRS have processed them we should get a better idea of what they think.
You’d have to ask them, I am not ‘the authorities’. Information, critique and analysis is presented on BehindMLM – what you do with it is up to you.
Attempting to discredit the information by passing it off as written by “naysayers who disagree” won’t get you too far though. Unlike most bullshit MLM marketing sites I’m not selling or marketing you anything – just providing information and opinion.
@Oz
your whole arguement to my reply is exactly what im saying, im not saying ZR is not a ponzi. and im not attempting to discredit either of you or your information or opinion. the the critique and analysis in the article is sufficient, let your argument be and let the people who want to believe all they want till heaven comes about how good ZR is.
you don’t have to go replying to everytime someone says ZR is good if you have nailed home the point. I don’t see your point in arguing over it over and over and over and over again when you’ve have no plausible replies to suggest otherwise. and it does raise a question of an agenda from the three of you even though there isn’t any really.
you are not the authorities. but surely if you are doing something good like this, sharing these info with the wider public, why not go a step further and report any fraud to the US Dept of Commerce, and FBI?
the three of you look like a fool arguing about non-sustainable business model, ponzi schemes and scams, and people pro-ZR are just gonna come back and say “ha, you’re the conspiracy theorist” they move on.. while you continue arguing with any new guy who comes by, who wants to challenge your facts with no worthwhile rebuttal.
Everyone of them leave this place with no real answers to your questions. so you win in the argument, is it like an ego booster? do you bask in your glory? or think of real ways to report fraudulent companies besides arguing and debating with any guy who comes and challenge facts?
So let’s leave it at that then, everything else is irrelevant.
This is how majority of individuals on these forums and in the every day world admit how they are introduced and give zeek their consideration. Has anyone ever said they came across the ads affiliates post, use the free bids, won an auction, enjoyed it so much purchased some bids, liked it so much they bought more bid became a member and gave away some more bids?
You just have to keep zeek rewards this simple, it is a recruiting group to bring in more money on a daily basis. It has now became an ATM of sorts for affiliates that have bought several bid or accumulated more bids since last spring all being supported by enough new monthly subscibtion or new large bid purchases.
Zeekler is an auction side of the business, which many people find very time consuming and dont even use all of the free bids.
Invest that 10k, just remember the people that are recieving a 1k plus a day keep smiling when they get their set portion through trustpay or paul burkes cheque,while you keep praying the whole thing doesnt collaspse from the authourities or not enough of you trying to reach that easy money.
@observer
Why don’t anyone do something real about it, like KaChing$$ suggested, report to the relevant authorities those of you in the US. the only irrelevant part of the whole thread is arguing with Pro-ZR.
Instead of sitting here on the moral high ground saying how Paul Burkes and his team are frauds and discrediting them with no actions, those who are in the USA should do something worthwhile.
Then add me as #4 against the world. I checked ZR, I joined as a diamond. I spent days studying their products, my conclusion “Ponzi” Got out!
Not an intelligent comment of you. The IRS will take longer, but they will take a look at ZR members.
Ponzi Scams are excellent in convincing people that they have the very best of intentions, and ZR is very good at that! As long as there are willing victims they will exist!
@Kaching$$ — there’s a huge difference between “ZR is good because it paid me”, vs. “ZR is good because of (solid evidence)”
The former is an opinion, because it’s a “it paid me (therefore it’s not a scam)” argument and that’s just bogus, because there’s a LOT of scams that paid SOME people.
The latter we welcome all the time, if they can PROVE their point, and so far, very few if any do. Most of them end up sounding like you, accusing us of having ulterior motives without offering new and verifiable information that would refute what information we have or the logic we have used to reach our conclusions.
I hope you don’t commit the same mistakes.
Irrelevant to whether ZR is a scam or not.
Hands of justice move slowly everywhere, often several years, ZR is just now surfacing on FTC’s radar. As many defenders are fond of saying, “just you wait”.
Well I would count myself as #5 against the world :). I for one am thankful for an objective analysis of the business plan of this Zeekler/Zeek Rewards situation. I had some people urging me to put thousands of dollars in ZeekRewards to “save for my children’s college fund”.
Thankfully, I resisted and only joined as a silver to watch it and judge for myself before committing any large sums of money. Amidst the mass of self-delusional affiliates promoting false hope and greed I stumbled upon this site and got the first dose of real analysis I have seen on the Internet, thankfully in time to avoid any damage.
As a side comment, most of the “MLM Review” sites (including MLM Help Desk) pose as independent analysts, but are really just feeding off the gullible by selling them MLM, or else steering them towards programs they are insiders in, or their friends sponsored, and then putting out some slanted rose-colored analysis under the guise of an objective review.
Thankfully, I am now cashed out completely from this scheme, and everything feels better already.
As for these brave souls hosting and contributing to BehindMLM, I consider it a service to others to help them avoid the heart-wrenching tragedy of watching $10K disappear into a ponzi scheme, or developing huge IRS problems while in search of the pot of gold.
Anyone considering this Zeekler/ZeekRewards thing – read everything on this site about the company and consider yourself warned. If after studying all of this stuff you still participate, then you have only yourself to blame when it dies and leaves you holding the bag.
I reside to the north of the United States. But feel if we are having this discussion something is being done on what ever scale.
I came to a quick decision that zeek was not rewarding me for simply driving traffick to their site and did something about by opting out and sharing my experience with anyone willing to listen.
Im sure the FTC, SEC, IRS, LMNOP, and the QRX are looking at Zeek. But they are USA government so they take a while to move, they get paid hourly…..
Count me in as #6
Kaching you forgot m. norway he posts alot of info too. Stop changing your name, your posts give away your identity.
Cashung out Don’t you think all of the people in Zeek have checked it out before joining? Of cause we have. While you people whinge and whine we Zeeklers are happy making money and paying our bills.
@Dc – many who joined Zeek followed the recommendation of their friends or other “MLM leaders” and fell into “bandwagon fallacy”. Just because many (including myself) have made money, doesn’t mean it is not an investment ponzi.
Perhaps since you’re such a Zeek supporter, you can explain Paul Burk’s nonsensical explanation on the “sanctions” for banning all Zeek affiliates in 6 countries, and only offering to refund initial purchase (some are reporting still no luck getting refunds), and not the accrued, compound daily profit share balance.
@Dc – In my case, I was recruited last fall by someone who of course emphasized the penny auction and the “profit sharing”. There was also a big emphasis on “no recruiting or selling”.
It was kind of strange, though, since I was familiar with Quibids that once I started asking questions about how many auctions Zeekler had, what were the profit numbers on the auction, what kind of prices the auctions closed at, etc that my sponsor immediately shifted to talking about placing ads and the infamous spreadsheets which are now non-compliant. In other words, no one actually wanted to discuss the Zeekler auctions in depth.
After observing the Zeekler auctions for myself, it was obvious why – the auctions are a complete joke compared to Quibids. Massive overbidding, crappy products, “cash auctions”, auctions closing due to server glitches, auctions closing way over retail, etc.
Then there are all the Zeekers all orgasmic about the daily profits they are “making”, but no real concern for the ethics of it all, who they might be scamming in the process, people in foreign countries being scammed out of 1 year worth of VIP point accumulation, the fact that this business plan is basically a cut-and-paste off previous HYIP plans which were closed as scams by the FTC…
And the ridiculous tax treatment on 1099 by ZeekRewards, where you are credited for real income on something that is only virtual “points”, and no real way to write it off legitimately. For me, I can’t really get enthused about something that has so many red flags. It is rather disgusting how many people are OK with… as oz says, “hey fuck’em I’m making money”.
And your conclusion is what, exactly?
Oh great, another “it paid me” arguer. Bogus!
WOW! This is a type of Amway bashing allover again!
My conclusion about ZR: Daily Payout = Daily Receipts. All else here is opinion.
Perhaps it is, but a lot of Amway bashing was deserved (and some of it was not). Don’t dismiss all of them in one broad stroke.
Daily profit share, or just the portion you cashed out?
Daily Pay Out = virtual vip points that expire every three months.
Daily receipts = that joke of a back office that shows how many daily points retire vs the daily vip reward and the percent of reinvesting these precious vip points.
ATleast in Amway people front loaded and were stuck with piles of products that they might eventually quite hoarding and use. Goodluck finding any value in zeek points and kiss your credability goodbye.
Just ask Mr. Burkes to show you how many bids you guys sell and ask for cash instead of points if those auctions are so lucrative.
I was approached today by an individual that zeekler will takeover or surpass Quibids and there in store club would rival and take on Ebay. I literally had tears in my eyes.
He also claimed how he has taken a break because of his money to be spent from zeek and he has not even started to what he could possibly help people by recruiting them into this chance of a lifetime. Will this ponzi ever reach its end.
Just because someone claim so doesn’t make it so, but I think we all know that. 😉
But it’s standard propaganda technique: make broad bold and confident statements. It’s ideology, not facts and logic.
I’m reading a “sales book”. The TOC says you need to AVOID logic and appeal to emotion. Hmmm… 🙂
There are just too much that makes you shake your head with zeek. Post that mandatory ad in hopes of bypassing regulation but claim for it to qualify for daily rewards. In vip points not currency.
This eloborate money game has been somewhat entertaning but has to be solved with sooner than later. These simular plans like Bidify should not even so blantly copy this scheme if dealt with promptly.
And to date not a single, rasonable explanations of the OFAC sanctions from Paul Burks or Troy Dooly. They can try and put window dressing on the ponzi to fool regulators, but when they make statements about sanctions and OFAC, then you are talking facts that can’t be denied.
Zeek did X. Zeek claimed Y reason. OFAC said Z. We said bullshit.
The method is correct for some products and for some customers, “appeal to the heart-factor rather than the brain-factor”. The advise could be far more specific in identifying closer where and when the method can be used.
“Residual income for life” sells better than technical details about the compensation plan. “Better health and more energy” sells better than technical details about the ingredients. “Appeal to the heart” means focus on the overall feeling for why something will be good, instead of focusing on all the technical details.
The method fails when you try it on customers who really ARE interested in all the technical details, or are interested in some other logical information. They will gradually become more and more desperate if you’re focusing on the overall feeling rather than the logical information they are looking for.
Most sales-people will fail if they switch from one market to another with different needs. And most of them will instinctively KNOW which markets they are skilled in, and avoid markets where they don’t have the right skills.
How does this company make money? Membership subscriptions? How else? Auction bids from its members? I don’t get this!
Former Zeekler here. Do yourselves a favor and stay away from this company as fast as you can. It’s nothing but a ponzi.
@DD
Primarily from membership fees and member investments in VIP bids.
Ex Zeekler I am currently in ZR, why do should I leave?
@NN214 – The main reason is simply risk/reward. Many are still riding out the daily profit share at 100% reinvestment. When the ponzi collapses, either all payouts will cease, or ZR will lower the daily profit share to the point that everyone starts withdrawing. At that point, VIP points will be devalued significantly.
So the key is to withdraw at least some of your balance before the major devaluation begins. The hard part, of course, is that no one knows when that will occur. This is the classic case with any HYIP or AdSurf as well. You can use an aggressive strategy to build up your balance (risking getting little back if you wait too long), or a conservative strategy to recover your initial investment as quickly as possible then let the rest of you balance ride.
For me personally, I rode the profit share for 90-days, then switched to 100% cashout, made 100% (pulled out my initial investment + equal amount in profit) and now am deciding what to do with my remaining balance.
Your decision on when to get out or not, regardless of any legal/moral issues on investing in a ponzi (or recruiting others into the ponzi) is simply based on risk/reward. How do you maximize your investment? What are the early warning signs, if any, that ZR is in trouble… and when those signs occur, how much money could you withdraw?
Thanks for responding Jimmy, I really appreciate it. I don’t have too much experience with online multi-marketing companies. ZR is the first online MLM company I’ve ever joined.
What do you think would be an early warning sign to know when to start taking out money. Also, right now I am at approximately 1300 points, do you think I should change my percentage, and if so what to?
Also, are you fully 100% convinced that it truly is a ponzi scheme? What about that compliance course they just put in along with all the conference calls, those Troy Dooly compliance videos saying its great, and the increasing Alexa rating on Zeekler and ZR.
I’m not saying it is or isn’t legitimate, before I use to think it was legit, the last couple days or so I’ve done extensive reading and research and I am so confused I don’t know what to believe.
All I want to do now is recover my investment and let it ride as you stated.
Officially, majority of their income is through bid purchases and those penny auctions. There are some monthly memberships but those seem to be a tiny bit of the income pie.
However, their system allows members to buy the bids (which are supposedly given away as promotional items) which increases their share of the profits. Thus, the members are essentially paying themselves.
@NN214 — I wish to point you at an Opinion piece published by Forbes magazine by Francine Mckenna
http://www.forbes.com/sites/francinemckenna/2011/01/14/looking-for-a-great-investment-try-a-ponzi-scheme/
Basically, she questioned are the victims of Ponzi schemes as innocent as they appear to be, or did they WILL themselves to particpate despite the warning signs, thinking as long as they come out ahead who gives a ****?
@NN214 — I will also point you at my short note on a cognitive bias called “true believer syndrome”, where people persist on believing in something even though it’s thoroughly debunked.
http://amlmskeptic.blogspot.com/2012/05/i-still-believe-or-true-believer.html
I don’t think you have it, as you are having doubts, but it’s something to keep in mind.
Thanks Chang, this is very interesting and useful information. And yes, I do not have the “true believer syndrome” but I certainly can understand those that do have it.
But Troy Dooly doesn’t analyse business models in detail. He will only analyse the parts he “understands”, and skip other parts.
If we analyse it in details, spending BIDS in the penny auction won’t generate much profit. The profit is made when the bids are SOLD, not when they are used in an auction. This “technical difference” is important when it comes to profit in Zeek Rewards.
Troy’s article was focusing on the legitimacy of penny auctions, and he still believes Zeekler’s auctions makes lots of money. But the transaction of money happens when the bids are SOLD, and only when people pay for bids with real money (not Profit Points).
Troy is positive because he fails to analyse the real problem. His brain tricks him into believing that the auctions generates massive profit, so he won’t bother analysing any details. The auctions would have generated lots of profit if the bids were sold directly to real customers from the auction-site itself, not via affiliates.
Affiliates using profit points to buy bids won’t generate any real revenue or profit. They will only generate virtual profit, and most of the profit points is calculated from virtual profit. Zeek Rewards will experience problems paying out money when recruitment slows down.
Early warning signs have been visible for nearly 6 months, so you probably mean the late signs?
* a very late sign is when you no longer can log into your backoffice, and the frontpage contains a warning from U.S. authorities. 🙂
A risk reducing plan will also reduce possible rewards, but experienced people will usually do something to reduce the risk – withdrawing their initial investment or part of it relatively early in the game.
If you want to reduce the risk as fast as possible, a 100% withdrawal plan for some weeks is the best method. It will allow you to withdraw between $10 and $20 per day for a few weeks, but your VIP point balance will also be reduced when bids retires.
An 80/20 plan will only allow you to withdraw $4 per day, and that is too slow. This is the plan people will use when they want to keep the VIP Point balance stable or slowly growing.
Jimmy is experienced. He followed a plan with 100% reinvestment for 90 days, then he followed a 100% withdrawal plan until his initial investment was withdrawn, then he continued to follow the same plan until he had 100% profit, and now he’s following another plan.
You can follow the same IDEA that he used, withdrawing parts of your initial investment using 100% withdrawal for some time. You don’t have to follow exactly the same plan, but the IDEA is to reduce the risk as much as you want to reduce it. This will also reduce the possible rewards.
I would at least have STARTED withdrawing some of my initial investment, $400-$500 or so:
Week 1: Withdraw 100% = $120
Week 2: Either continue to withdraw 100% or reinvest 100%
Week 3: Withdraw 100%
Week 4: Same as week 2.
Week 5: Withdraw 100%
If you want to continue in the game, you can’t withdraw too much or for too long time without reinvesting something. If you want to quit the game, then you should withdraw as fast as you can.
I would at least have withdrawn $300 within reasonable time, no more than 5 weeks. It isn’t about the money involved, it’s about “strategy”. I don’t like the strategy where people have blind faith in something. 🙂
Yes Richard you are right about zeek they are headed in the right direction and for the people who got out Oh! well too bad you missed out, that’s why it’s always good not to believe everything you hear or read, and by the way Zeek is sustainable people and they will continue to grow…
much success to all the nay sayers I hope you find success cause I sure have…
“* a very late sign is when you no longer can log into your backoffice, ”
looks like that ‘Sign’ is here… haven’t been able to log in for the last few days. Looks like the web page doesn’t exist…
I’ve read of other people having login issues over the last few days too. Sounds selective, I wonder if more geographical bans have been implemented?
Does anyone know why my cash awards showed 100% reinvested, however I don’t see that amount been added into my total VIP points?
Did I missed something? Please advise. Thanks!!!
I believe it is because they are all partying at the red carpet event. LOL!
Faith Sloan
Who cares what you say… your a moron
Started with $1000 ( all the money I had in the world)extracted 161K so far in my pocket I have seen countless peoples lives changed financially get in …
there are 6 billion people on the planet, more coming of age every day…never run out of participants.
Glad I didn’t listen to the naysayers.
Didn’t your mama teach you not to use dirty words?
Ah, the infamous “it paid me” argument. Is that supposed to prove that it’s legitimate? Or is that demonstrating that you don’t give a **** about whether it’s legal or not?
Ah, the infamous “there’s a sucker born every minute” argument. Bravo.
Guess you didn’t listen to mama either.
@Hec No thanks. Actually decided to opt out. I wont despute your claim of dollars depending when you became a member and set your daily amount at.
I will tell you to be prepared to see alot of people lives change in a negative way, maybe even their last 1k. But you dont care. You are a coming of age man, giving every human and newborn on earth the opportunity to become a participant in posting your single daily ad and lining their pockets just like yours.
Glad i didnt listen to the one that cast the first stone.
@Chang Do not forget he tried to recruit you too. I honestly thought he meant he was going to save the world one bid at a time.
I like the word extracted. Good choice when you consider you pull money out of something running an ongoing debt.
My father has been in zeek for over 8 months. He is making great returns on his investment. He has ex CIA friends also involved and they have told him that this company is legit.
There will always be nay Sayers. There were people who said Facebook and Microsoft would fail. This is not a ponzi scheme and there are some serious profits in the penny auction business. I know they can make thousands in profit for a simple $200 product, so how is this so hard to believe that there is no other revenue sources?
When I posted my ads before I got adsmartz, I had 12 signups from my own postings and 2 of this turned into paying customers, one of whom is spending quite a bit of money on purchasing bids.
I can’t wait to come back to thus forum in a year when hundreds of thousands of people have made life changing money and see who has the last laugh. I feel sorry for some of these guys!
Oh and the guy who posted above me says ongoing debt? This statement alone should make anyone reading this site think twice.
If you think zeek has debt your an idiot. They have 12 ups trucks a day dropping off bags of checks from the explosive growth of this company. This is a great opportune ity.
Don’t let any of these people hold you back from making a decision to join zeek, start small, get a feel for it. If you like it, buy more bids, if not don’t! Nobody is holding a gun to your head here.
@Joeboo — let’s analyze what you wrote so far
Anecdotal fallacy: believing that ONE example (how how tens of thousands of affiliates) somehow proves the whole thing works.
Hearsay is not evidence.
Irrelevant opinion, “appeal to exceptions”.
Both are opinions. The latter is close to fact, but you didn’t bother to provide any proof. Nor did you explain why that proves your premise: ZeekRewards is not a Ponzi scheme.
While you worded it as an opinion, I won’t challenge you on it, as I agree that is valid.
The question is, WHO are buying those bids? If it’s just you affiliates buying the bids, you are just paying each other. THAT would make it a Ponzi scheme.
You basically proves that out of 12 signups, only ONE turned out to be a long-term customer (the other one’s unknown). So the other 10 are only buying bids for VIP profit points, thus, generating profits paying you and all other affiliates.
Irrelevant.
And who told you this? Dawn? Burks? whoever? Premise with unverified evidence.
Opinion.
Out of 10 major statements you made, you got fallacies, opinions, and unverifiable statements. You got one, maybe two facts in the whole thing, but you ended up PROVING that the Zeekler’s profits is mostly from affiliates buying bids, instead of CUSTOMERS buying bids.
That PROVES it’s a Ponzi, not disprove it.
@Joeboo If you compared the number of vip points, which all of you affiliates maintain is worth a US dollar, to what zeek could cover today you might be shocked.
12 ups trucks, is that what they are telling you at meetings now. To bad it takes you several weeks to finally have that portion of your money and other members delivered to you.
Dont even go with the penny auction revenue because everyone knows it just doesnt cut it, but please devulge in these other revenue sources you dont talk about. Do not feel sorry for me, I make a very comfortable living and dont have to rely on recruits buying more bids all of the time.
For everyone even considering starting small here is a brief summary to expect and accept. Become a silver member 10 dollars. DO whatever with your few bids and now post your daily cut and paste ads with your nine choices of spam in your backoffice.
Set your daily pay to 100 percent repurchase to watch your company vip points grow. Remember points not cash. If you cant find 2 members to recruit just pay another 10 dollars a month like the majority of members to a third party that solves this for you.
Next month dont forget your monthly silver member fee. First month you have 30 dollars invested in this so called opportunity, now hold your breath for several month and if it keeps chugging along you might break even.
That third party doesnt give you an actual person to join in your matrix, they just take care of your now mandatory spots for bid retirements, just another joke of this once in a lifetime business.
Everyone i discuss or debate on here and in public seem to end the conversation with trying to tell me or anyone else in the vicinity to join. Finally figure how this zeek operates or just beggining act of desperation……
@observer — they may or may not know it consciously, but they know enough to recruit people into Zeek to maximize their own profit share.
The question is… are they recruit CUSTOMERS (which is what Zeekrewards says they are supposed to do), or are they recruiting AFFILIATES (which makes it into a Ponzi scheme)?
Or do they simply don’t care?
If not, then ZR is supposed to care, unless they plan to use the Herbalife defense: “we don’t have an exact percentage [that actually sold to consumers that are not distributors] because we don’t have visibility to that level of detail.”
Though in ZR’s case, it’d be “we don’t know who the bids are sold to, consumers who are not affiliates, or affiliates.”
The end may already be upon us. I requested a check on 4/28. They cut the check on 5/14. It takes two days for mail to get from here to there. I don’t have a check yet. No response from the first class multi-million dollar company….
…and we all know if and when it shows up it will be drawn on the old bank. I’ll keep you posted.
@Bwatson – there is a normal 2-week lag for checks from ZR. Many have commented on how silly that is compared to other business opportunities. The cutoff for requesting a check is Fri midnight, with checks mailed the following Monday.
So if you request a check on Saturday, you actually have to wait 23 days + mail transit time to receive your check.
If you request your check on Friday, you have to wait 16 days + mail transit time to receive your check.
Jimmy, I took that into consideration. The check was cut on the 14th. Its been two weeks for mail time. It takes two days for mail to get from me to them. They obviously haven’t mailed it yet.
I cannot express how grateful I am for oz, k.chang, jimmy, observer(and probably a few more that I missed)!
Just this evening, I had followed a link from a friend to sign up for ZR. I even clicked on the “sign up” tab and my plan was to join as a diamond member and start out with $1,000.
After over a week of researching I was ready to take the plunge and start making amazing returns! Just then, I thought I’d try one more google search for some final reading material. That’s when I found this site. I’ve been reading posts for three hours and have decided that this program isn’t for me.
I think it’s funny how many people come here and try to argue that this isn’t a ponzi scheme. The “few against the world”, as they have been referred to, have proven post after post that this is a PONZI SCHEME! Maybe we can post a “help for denial” hotline number for these poor confused people…
The ironic thing is that I could probably sign up tonight and maybe even make some good returns for who knows how long…but at someone else’s expense down the road?? Not a chance! I couldn’t stomach knowing that I had grown wealthier at some old lady’s or single mother’s expense.
**Warning!Here comes my opinion** There is a ceiling and this will eventually explode. Some lucky people will be rich and many will be ruined. I hope it’s worth it…
Thanks again you guys for opening my eyes! I really think you saved me about thousand bucks.
Jake
And then his daughter got kidnapped in France to be sold as a sex slave and he had to go there to rescue her by beating up and killing a bunch of bad guys.
I LOL’ed at the idea that because they used to be CIA agents, they know for a fact that Zeek Rewards is legit. Because as we all know, the CIA knows every single fact there is to know in the universe.
i’m confused, what should i believe? is ZR is really a ponzi
My brother invested in this as convinced by our stepfather, however, I’m a firm believer that there is no such easy money over the Internet. He now has $1,000 worth of bids or money or whatever in the account. He only invested $100. He has not withdrawn any money.
My question is: what kind of tax trouble might he be in? Also, should he just close te account and take the $100 loss to save himself from having to pay taxes on the $1,000 he will never see or is it possible for him to withdraw the money as soon as possible and pay taxes on the $1,000 he receives? If he can even pull all that out?
Any help would be greatly appreciated.
@Lea — my ZeekReward analysis has a section on potential tax liability. It’s not that bad, but it has a few pitfalls.
http://kschang.hubpages.com/hub/Analyzing-ZeekRewards-is-it-a-legal-and-viable-business-and-can-it-provide-long-term-income-for-you
I have been reading this since couple of hours can’t wait to see what happens next. As long as ZR and it’s affiliates are concerned good luck.
I am wondering why are there no comments about ZR since they have launched their compliance training. I joined Zeek 60 days ago bought 1000 bids and I am sitting at 6000 right now let see what happens next
@Lea:
If I were him I’d withdraw everything as soon as soon as I’d be able to and consider myself lucky that I was able to get my initial investment back before the whole thing collapses.
If he’s able to make a profit on it, then so much the better. You can make money on ponzis but it’s a risk because you never know when they’ll collapse.
We bought into Zeek. The presentations we attended assured us that recuiting new affliates was not a necassary component of making money.
What we were not told was that when you get to the 90 days and you have not recuited new affiliates your investment, zeek claims it is not an investment, begins to degrade. Which means that you cannot possibly recover your initial monies.
We are opting out before this whole thing cascades.
All you have to do is read this thread and listen to the ZR supporters and realize this thing is doomed. “All you have to do is create phony accounts to give away your points to”.
Sorry to break the news to you people but dollar bills don’t magically multiply. The returns ZR is promising is not possible. They have to somehow make enough money on the auctions to run the company and pay all these tremendous returns.
You are creating phony accounts and giving away bids to fake people who will never spend a dime to qualify for your commissions. Where do you think the profits are going to come from to pay you?
Even if everyone gets their 2 each month do you really think the company can generate enough profit on those 2 people each month to pay you the return they have promised you? Wake Up!
You also keep seeing the word “investment” which in itself makes it illegal.
Are people joining ZEEK because a) they want to be in a legit business opportunity that requires work or b) because they want easy passive income from an investment? The answer is B and that is really all you need to know.
This is a PONZI and it will blow up with a lot of people left holding the bag. If you are already in it and have been profiting I suggest you put all your proceeds aside and wait for the Government Lawyers to come trying to claw it all back because they probably will.
I wouldn’t blow it on a vacation or anything else for that matter because you may not get to keep it.
This all happened just a few short years ago with 12dailypro. All their members drank the Koolaide all the way to the end.
Yep, I’m wondering about a guy around here who basically introduced ZR to everyone locally. Supposedly he’s making $4000 a week now. When this ponzi collapses and the government gets involved, will he have to pay back everything he got out of it?
Doesn’t matter if you know it’s a ponzi scheme or not, or if you still have the money.
But, I’m willing to bet that for the most part the small fish won’t be bothered, but they will definitely go after the big fish near the top of the pyramid.
Oh and yes, it’s the phony customers which totally makes me believe that this whole thing is a ponzi. If Zeekler is such a big penny auction site with millions of customers, and these daily spam ads are bringing in thousands more daily, then why does anyone need to create fake customers?
And again, everyone I know who’s involved in ZR has made fake customers, but none of them have actual Zeekler customers who aren’t involved in ZR. And the focus of these people is on recruitment and not signing up customers. So it’s quite obvious that no new money is being created by customers, but all the money in the system is from other members.
Lot of reading in here. Extraordinary assumptions and utterly ridiculous math. Comments clearly based on opinion and supposition. Clearly none of the commentators in the “analysis” of this business have never bin involved in a start-up or an IPO or have any idea what it takes to keep up with explosive growth.
The words “Ponzi and Illegal” are thrown around as if fact not conversation or debate and little thought seems to be given to the truth of either. There is a clear misunderstanding of the words Product and Value and some outright denial of fact proven. I can go on for a great while here about the total irresponsibility of this conversation but understand that it is a good conversation to start and have.
No one wants to get scammed. If you are going to have these conversations please at least get your facts in order before you voice an opinion.
One thing I will tell whoever it was that was bright enough to say that “disclosing the % of profit share” was somehow not propitiatory is clearly ignorant of a competitive business who’s entire income structure is based on its design ratios.
If another MLM or Auctions site could get those figures right then what is to stop them from doing the same … I love the creativity this company has shown in developing and entirely new business.
It is exciting, it has issues in growth and design as ALL start-ups do. If some of the stupid math here were even close to true this “scheme”, “Ponzi”, “Illegal” business would be larger than some of the federal bailouts and bank failures without the subscription fees.
Pretty sure in today’s climate the feds would be all over this one as public as it is. Further, as many years as I have been in business in the world of finance, ever so seldom have I heard of a Ponzi hiring the best lawyers and consultants in its industry to whip it into legal compliance ,,, it defies logic.
Good debate, use facts not supposition, apply logic and math based on a complete understanding of the company revenue structure and you will help a lot more people and not be spreading gossip. I Look forward to learning more
cough! What he said!
Please, Zeek Rewards is neither an IPO or upstart.
Explosive growth is the company touted line and has completely outworn its welcome. Anyone would think Zeek Rewards were the only company on the planet to attract members.
…and those facts are? I’m seeing a lot of your typical ‘waah you’re wrong’ waffle and no substance.
The design ratios are not competitive secrets, they are mere percentages. All they reveal is whether or not the bulk of revenue going into the profit share is coming from affiliates. Something Zeek Rewards appear hellbent on refusing to divulge or even openly discusss.
Any idiot with a calculator and virtual simulation can model what percentages are required to keep a MLM company afloat so don’t even bother crapping on about how “proprietary” percentage numbers are.
18 months and we’re way beyond calling Zeek Rewards a start up. Next you’ll be blaming DDOS attacks, the Russiand and hackers.
Not with everyone re-investing in the VIP bid virtual currency Zeek Rewards has set up.
Reactionary and rather slow to act are two words that spring to mind. And besides, this is just a rehash of the ‘the authorities haven’t shut it down therefore it’s legit’ argument. Irrelevant when analysing the business model.
It appears to be a trend these days. Launch Ponzi, hire lawyers… problem solved.
Meanwhile as long as the business model remains the same and resembles a Ponzi scheme, no amount of lawyers hired matters.
The revenue structure appears to be majority fed by affiliates, as a “team leader” are you going to dispute this?
And what facts did you bring to the table? Absolutely none.
And what refutation do you pose? Absolutely none.
So what credibility do you expect for your rant? None of course.
@ A Zeek Rewards Team Leader:
Several months ago, I mailed the one trying to recruit me several questions:
1) How could Zeekler support the return on what’s easily tens of millions of points, when simple calculations show it makes several hundred thousand dollars a day at best?
2) How come Alexa shows 80% of the traffic to Zeekler is from outside the US?
3) How come Alexa shows more traffic to ZR than to Zeekler?
4) How come people keep bidding after the price is over retail?
He said he’d ask his upline and let me know. He even asked me if it were okay for his upline to call me and discuss this (at some point you could hear the blooming doubt in his voice). He admitted that joining ZR would take a leap of faith. I haven’t heard from him since.
By the way, his upline is possibly salesperson 0 in my country, with about 6,000 affiliates under her. And she’s a former math teacher. She attended the last red carpet event. And yet, not a squeak from her.
So, if appealing to authority (as you did with the lawyers) is any good, I think you should heed this post of mine.
Todd Disner, Zeek’s #1 affiliate?
Gerald Nehra, Zeek’s in-house attorney and expert witness for ASD testifying that it was NOT a ponzi.
Both AlertPay and SolidTrustPay are referenced in court filings in the AdSurfDaily case.
Connect the dots yet?
And in today’s news:
Above from: http://www.patrickpretty.com/2012/06/06/bulletin-feds-move-to-stay-discovery-in-lawsuit-filed-by-asd-figures-dwight-owen-schweitzer-and-todd-disner-prosecutors-say-neither-schweitzer-nor-disner-responded-to-may-23-email/
*It is news to me that we have “to recruit 2 persons per month” as stated in the beginning of this article/post/blog.
As of First of May 2012 I am into Zeek Rewards for a total of $3100 (I am flying only as high as I am willing to fall) I sincerely believe (feel) in my gut, this whole thing of Zeek Rewards is in fact a deal-scam where eventually all of us who have invested in it will be ripped-off.
The developers of this thing will have likely benefited greatly with large amounts of financial gain in their pockets. Their only reality is that they may find a prison cell uncomfortable verses to what they have in life today. That’s their risk and they are willing to take that risk. As we all have seen these types of persons who do get caught and found guilty end up basically doing life with not much chance of parole.
So, to reiterate, based on my own feelings, I most sincerely do believe this thing will crash hard and in big flames, thus making the Bernie Maddoff scam look like child’s play.
My reason for writing, is that my feelings on matters as this is simply in 59 years, when my gut feelings gets like this, I never-ever-ever have been wrong! So yes, I am ridding it for one year to see what happens. At the end of the fiscal I will start a draw down. Caveat emptor.
This was only supposed to apply to members who were previously buying customers directly from Zeek Rewards.
It was also supposed to be implemented back in March (with promised additional qualifying criteria to be set in April), but Zeek Rewards have continued to delay this requirement for what has been three months now.
They haven’t really given a concrete explanation as to what’s behind these delays (they know 5cc customers don’t want to/can’t convince anyone to pay to be a Zeekler customer?) and I imagine the deadline will simply extend into the foreseeable future.
There are 6 Zeek customer services that I am aware of. Pay $, get customers. You can also pay $, they will place your ad.
You essentially can do nothing and watch the money grow forever. Zeek is amazing. Zeek is changing people’s lives. Zeek will bring us out of recession. Zeek is the real stimulus package.
Sarcasm off. Once corporate stopped supplying 5cc, a new cottage industry sprung. Todd Disner started one, too. When you are rolling in the mud, might as well build a mud hut.
@BobG
If you’re a U.S. citizen, you should probably read something about ZeekRewards and taxes? I will consider the tax problem to be one of the biggest problems in ZeekRewards.
“Howard Kaplans conference call” can be found here at ZeekRewardsNews – a few minutes “general tax advise” in the beginning, and the specific part about deductions at 16:00 – 18:30 into the call (very vague). NOTE: I’m not sure if the conference call still works.
The link was picked up from this section in another thread:
“ZeekRewards and taxes” was discussed here in mid February and late April, but with no actual conclusions.
With an investment of $3,100 you will have had an estimated $27,000 as taxable income from ZeekRewards after 6 months, if you don’t withdraw anything. It can be wise to do some tax planning.
“The general tax advise” from Howard Kaplan was to spend a couple of minutes each day on “being organized” (keep a track of all expenses and income, use a calendar and make notes for all the work you’re doing, etc.).
“The specific tax advise” from Howard Kaplan is something I will consider to be relatively useless. He was hired by Zeek to take care of their problems, not the problems of the individual affiliate.
SPREADSHEETS
A general advise from me is to use a spreadsheet, one spreadsheet for planning (simulating scenarios) and one spreadsheet to keep track of the actual VIP Points, daily profit points, reinvestments and withdrawals, and other expenses.
How long did Bernie Madoff’s ponzi scheme go before it was shut down? According to the Wikipedia article, he started it in the early 1990s and it ran until December 2008.
Just because Zeek Rewards hasn’t been shut down yet doesn’t mean it never will be.
From what I’ve seen, all they did after hiring the lawyers was to tell all members to not refer to ZR as an investment or even use words which would refer to ZR as any kind of investment.
This, after admitting their business model is illegal, however they didn’t make any changes at all to the business model. So instead of trying to “whip it into legal compliance,” it sounds like they’re just trying to cover their @$$es.
@Joe
That and stop charging for fake customers, which was what they deemed illegal after March 1st.
Now they just give the customers away for free and appear to have suspended the PRC requirement indefinitely (they know forcing affiliates to find paying customers is going to just piss people off who are in it for the passive investment).
Oh, they also seem to have moved their finances offshore too and cleaned up the paper trail. Despite claiming to be inbetween banks though obviously they are funding their e-wallet accounts from a bank, the details of which are kept top secret (yet another paper trail covered).
Easier to cover your tracks paying offshore e-wallets from bank accounts nobody knows about than to pay affiliates directly from publicly known bank accounts.
That pretty much sums up what paying lawyers for compliance gets you these days. Affiliates schmilliates, as Dawn Olivarez stated recently these are Zeek Rewards; lawyers, not the affiliates. Their only job is to protect and mask the assets of the company at all costs.
“Water Bottles will never sell” “Cell phones are useless” “Computers will never catch on” “Zeek Rewards is a ponzi scheme” All statements nay sayers like your selves have said and are saying. Rattling on in great detail what if, what if what if!
Here is the way I see it, let’s say the Zeek Rewards program crumbles to the ground in a big ball of fire, my loss, not substantial, my time invested, minimal. I will survive.
BUT, let’s say you are all wrong, and in 2 years, just 2 years, Zeek Rewards is still going strong, paying out to their affiliates. By then I will have pulled out my initial amount of bid purchases 20 times over, what do you have to ramble on about that scenario?
One could go on and on and on about how opening a restaurant is just a bad idea because 70% of them fail in the 1st year or 2. Yet, people still open restaurants.
No matter what business venture one tries, there is always risk. For me, and allot of others, are willing to take the risk, because the rewards are much greater. This is the nature of business, and there are no guarantees in anything.
As A side note, this was posted on February 28th 2012, since that time I have put over $10,000 into my bank account off of a much smaller initial amount. Man, am I glad I did not read this, listen to you guys, and get scared away. That would of lost me over $7,000!
@Zeek Believer
I’m not interested in your personal finances, I’m interested in the bigger picture.
Using duplication, if you can’t see the problem with the above… well, people like you are the reason Ponzi schemes are still alive today.
We’re not talking about restaurants. Irrelevant.
But that risk should never be whether or not the business is a ponzi scheme.
…it’s your conscience.
Add to that list “this guy Bernard can get you 20% ROI a year,” and “If you farmers can raise these pigeons for me, we can sell them to the Saudi royal family.”
“The Titanic is Indestructable”
“Amelia Earhar circumnavigateing the globe”
“Cement ships in WW1”
“Elvis Lives”
“Star Wars satelitte lasers can shoot down rockets”
“Einstein’s Universal Field Theory”
“Crop circles”
“Cubs will win the Pennant”
“Cold Fusion”
“Solyndra”
“Zeek is not a ponzi”
And your point exactly… ?
So you named bunch of exceptions, and try to claim ZeekRewards is an exception… WITHOUT EXPLAINING WHY NOT, just like your previous rant.
Standard “we are the exception, trust us” derailment.
Irrelevant. You’re supposed to be providing “proof” to defend your view that “Zeek is not a Ponzi”.
Again, your future projection on Zeek is irrelevant. Bernard Madoff got his Ponzi going for 20 years. Age is NOT a factor in determining whether it’s a Ponzi scheme or not.
Still irrelevant.
STILL irrelevant.
The “it paid me” derailment. Is that a concession that you are abandoning your position that it’s NOT a Ponzi?
Is it me that you just can’t name a SINGLE relevant factor to prove that Zeek is not a Ponzi?
I believe that requirement was removed during the March 2012 “we are not an investment” update.
You only need 2 PRC customers if you want free unlimited customers assigned to you from the company rotator. It replaced the 5cc – instead of paying per customer, you get 2 customers to buy subscriptions and get unlimited customers for the month. But it is not required.
Zeek is just trying to change the front door criteria in order to receive unlimited (perhaps fake) customers. Instead of “pay us money” it is “get 2 customers”. It is an attempt to become more compliant (but doesn’t solve the fake customer problem). The practical reality is affiliates sign up 2 fake PRC customers at a cost of $20 instead of buying customers directly from Zeek via the 5cc. But Zeek still hasn’t released details about membership requirements (what happens if your 2 PRC’s cancel after 1 month and you sign up 2 new ones – your cost still $20/month but you satisfy the 2 unique new customers per month).
Since Zeek has extended the deadline for 2 months now, those who qualified early are getting free customers without requiring affiliates to requalify each month. Those who don’t need more than a few customers per month can save money by signing up fake customers to dump bids or using one of the many pay-for-customer services that have popped up.-
Problem is simple from the Feds standpoint. When Paul Burks has accumulated over 100 million dollars the feds will want to know where all that cash came from. This is what gets these guys in trouble.
12daily pro got in trouble because of the massive amount of cash they were sitting on. The things go viral, people get excited and the founders get rich. The feds don’t like that.
They’ll lock it up in receivership and two years later distribute peoples money back to them at a percentage of original investment.
As far I see it Zeek is dong everthing right to make it a good thing for many that are involved with it. The company is covering all its needs and of the ones working at it.
I do believe believe many of the ones that just say negative things about just about anything out there. You could take a hundred dollar bill and clue it on there forehead and they would say there is nothing hanging from my head.
So all I see is that the company has done the right things up until this point and hope it continues because there are not whole alot of companies out there like Zeek. Best to all
@Joe
…except that they’re still using a Ponzi scheme business model, which at the end of the day is all that matters.
Just watched a webinar on Zeek Rewards… Most of you guys are echoing exactly what I thought when I saw the structure. The payout rate is not sustainable. They are nowhere near a big enough auction site to support the commissions structure they have in place, not to mention the ponzi setup of their Matrix payout…
This thing set off all my “scam” warning bells. The opportunity is the product and that equals ponzi. No thanks.
Matrix commissions are just a pyramid, not ponzi. They pay on actual revenue from membership fees, though it is all internal revenue.
The one slightly ponzi nature of matrix commissions is that some pay for their monthly membership fees from daily profit share, though most use credit cards and some use eWallets.
why do you consider it a ponzi though they sell products? dont they? what’s with the bids?
if anyone here think it’s a ponzi or whatsoever kindly give out your best reason WHY people must not get involved into zeek..people here just making other confused..
Selling products had nothing to do with whether it’s a Ponzi or not. Burnlounge, Ad Surf Daily, even Pigeon King all claimed to sell products.
The problem had to do with who is paying who.
In a non-MLM business, customers (attracted by salespeople or store front) buys products, generating profit for company, who then pays the sales people.
In a MLM, it doesn’t change much. Product sales are done by sales people, to OUTSIDE CUSTOMERS, thus generating profit for the company. Company then pays commission to the sales people (and their upline)
In a Ponzi scheme, there is no real sales. The sales people are the ones buying the products, generating the profits, and sharing in the profits. They are paying themselves.
In ZeekRewards, you are buying bids for giveaway, thus you are generating profits to Zeek, and you are sharing in those profits. You are paying yourselves. Thus, Ponzi scheme.
Is that simple enough for you? Or should I start quoting Zeek’s favorite lawyer: Gerald Nehra, instead?
If they did the right things up to this point, they would not have hired a ton of lawyers back in march.
They would not have realized they operated a whole year without an auction license (they only got it in March).
And so on and so forth.
Nor would they be failing to pay people for won auctions, ignoring affiliate trouble tickets, ignoring emails & phone calls of people needing help from the company, and screwing up any number of issues, like not crediting people for the bids they purchased or deleting affiliate accounts entirely, etc.
Oh and I really wouldn’t consider zeekler bids “products.” Plus the problem is that when an affiliate buys $1000 of bids, their point balances get credited with 1000 points, which such points have been paid $1 per point.
So if $1000 of profit comes into the company, how is the company going to pay off that affiliate’s and others’ increasing point balances with just the money the affiliates are putting into the system?
And of course the fact that few if any affiliates have any real, repeat business, non-ZR affiliate customers purchasing bids on a regular basis to bring outside money into the system means it’s a ponzi.
@Joe Mama — ah, but that’s the beauty of Zeek’s bid disguise.
I’ve explained before: bids means different things to different people.
Outsiders sees bids as “something I buy to be used in auctions”.
Affiliates sees bids as “I buy that to get more VIP Points”, even though if anybody asks, they can only quote the “outsider” definition.
They are technically both correct, but they have completely different purposes.
When defenders of Zeek tries to argue the part about the bid, they fail to trace the money itself. They think that bids in themselves, actually hold value, because you paid money for them. What they should have done is tracked the money ITSELF.
Affiliate buy bids (affiliates give money to Zeek)
bids get converted into VIP Points
VIP Points turn into RPP daily profit (Zeek gives money to affiliates)
It’s a cycle: you pay me, I pay you. It’s circle-jerk, to use a cruder term. But individual affiliates are not aware of this cycle because they don’t deal with other affiliates: they deal with Zeek. They pay Zeek, Zeek pays them back. That’s the very definition of a Ponzi scheme.
Whether bids have value as auction tokens is irrelevant, as it’s NOT BEING USED AS SUCH.
Which is why I don’t understand why some people ask, “they’re selling products, so how could it be a ponzi scheme?” There’s just no reason to be that obtuse.
Cognitive dissonance, backfire effect, selective reasoning, confirmation bias…
Cognitive dissonance — brain can’t deal with conflicting sets of “reality” and have to find a way reconcile the two sets of facts by employing one of the following biases
backfire effect — the more you “prove” to victims it’s a scam, they more they believe in the scam, a relative of the true believer syndrome
http://amlmskeptic.blogspot.com/2012/05/i-still-believe-or-true-believer.html
selective reasoning — they discard the portions of evidence they don’t want to see or minimize its importance.
confirmation bias — they pick the portions of evidence they *do* want to see and maximize its importance
http://amlmskeptic.blogspot.com/2012/04/cognitive-bias-confirmation-bias.html
I tried to analyse it in May, while we were discussing taxes. Bids are more similar to chips in a casino than to products, a virtual currency designed to be used in a specific place/places.
Chips in a casino will be products when the casino buys them from a manufacturer, but they will be virtual currency when customers buy them from a casino to use them in the casino.
Investment:
We call it an investment when the main motive for paying money IN to a company is to earn ROI. So when customer pay for bids it’s not an investment, their main motive will be to use the bids in auctions and try to win something. When affiliates pay for bids then it’s closer to an investment.
Ponzi scheme:
Is an investment scheme where the ROI derives from the investors themselves, not from external sources. Also called “robbing Peter to pay Paul”, where both Peter and Paul are investors.
Ponzi schemes will usually have some kind of “external income source”, either fake or real. The main purpose is to make the scheme look “legitime” and “real”. So we are analysing whether or not the penny auctions and the other income sources are able to support payouts.
“System”:
Another method to analyse this is to look at the whole “system”, where you can analyse the different parts and see how they are working together as a “system”.
When affiliates are buying sample bids, the main motive is to earn VIP Points. They are buying them as part of a “system”, where another part of the system is customers to dump bids onto, and other parts are the profit pool, daily RPP, VIP point balance and cashouts, and so on and so forth.
I’m just trying to find someone who has actually filed a tax return showing the income reported on a 1099MISC and what deductions they were able to take.
There has to be a CPA out there that had to research this. I’m currently in the process of looking at that now and I do plan to call the IRS.
Other than that, I don’t think I ‘ve ever read so much hoop-la. You put money in or you don’t, who really cares? I’ve lost over $50,000 of my retirement money in the past 8 years.
Corps mismanage money, we lose. Mortgage industry mismanaged money, we lose. The govt mismanages money, again, we lose. People are desperate to find something, anything, to try and recoup just some of the thousands that have been taken from us. Unemployment is at a record high which is obvious from the above posts, they must have little to do.
BTW, NewBridge Bank was their bank earlier this year, just happens to be the one I bank with. Great bank, but told Zeek activity was way too much for them to handle. I know these bankers. They switched to BB&T and is where they are currently.
WOW! i’ve read this entire thread and found it to be extremely entertaining it reminds me of the debate about God and no God, just wanted to make 2 comments.
1. Those who beleive and have faith cannot be dissuaded even in the face of absolute proof.
2. Those who do not have faith, will never beleive no matter what proof you present.
it’s your money to do with as you wish, no risk no reward keyword (RISK)
as for me , i chose the red pill
some people still believe in moral obligations. Whoever has the more influence prevails…
I’m not that familiar with “The Matrix”, so I had to google it. Source = Wikipedia.
* The red pill is the often painful truth (the real world)
* The blue pill is the blissful ignorance of delusion (in the matrix)
Then please tell us when you have felt the effect of the red pill? When you’re back in the real world?
I’m glad you can afford to be so flippant about losing $50,000. I personally couldn’t do that.
Unfortunately, though, anyone who “recoups” their money through a ponzi scheme takes it from other people who are just trying to recoup their own losses rather than taking it from corporations or the government.
You’re way behind the times. They don’t appear to be banking with BB&T any more, and may have moved their banking offshore to one of various countries including Hong Kong, Panama, Costa Rica, or South Korea.
Unfortunately for Zeek they feel it very necessary to keep the identity of their bank a total secret, and members are discouraged from asking about it.
I see so many posts like this all the time. The Zeek bubble will burst soon and the wrath from affiliates who didn’t at least break even will be tremendous.
How do you shake these people and hit them with a clue stick?
ROFL. Yeah, everyone should just get paid all the time, we need to get rid of these unfair business practices where only people who actually generate money to the company get paid commissions.
I am floored at the amount of ignorance posted in this forum. Rash decisions have been made without proper due diligence or understanding of how this business model works. The expectation that all things are guaranteed. Assumptions have been made and criticism and sarcasm abound.
You seem to ignore that fact the ZR has been a THRIVING Penny auction for 14-15 years with plenty of real customers playing in the auctions. That Peeny auctions are daily new to the US and that most of the customers are in other countries, not the US.
Most of you seem to think you know more than than the top MLM attorneys and consultants that have been pouring over this company for many months now making their recommendations of changes that need to be implemented and that are in effect and have been in effect for more than 9 months now.
(Sorry, things take time and no one put you on the Need To Know List)
if and when you chose to joint his company – it is done at your own risk. What I do know the company has paid out consistently each and every week. Not one complaint of folks not being paid. The company went months without collecting memberships but conned to pay the affiliates.
They have consistently upgraded and continue to upgrade their entire operation from hardware, to software, to call center, headquarters… these are all signs of a company expecting to be here for the long haul.. Not getting ready to bail…
Maybe it will be here a for a little while, maybe years. If you look at the income opportunity and decide its not for you. So be it – are you so bored with you rife that you have nothing better to do than sit around and bash the company? Who made you guardian of all to warn people off of your opinionated assumptions of this company?
There have only ben a few educated posts from a few people (Len Clements) for one) that truly know what they are talking about.
The people in ZR are getting paid to be the Marketing Arm of this company. We are not being paid to sell a service or product but to advertise the company. If for some reason they say we cannot out source the daily ad posting. Oh well. Its take 5 minutes to post a classified ad.
It has never been illegal to purchase prospect or potential customers in any MLM. Why would this be any different?
Believe me, the company knows the ratio of how many FREE Commercial bids samples are being giving away to how many actually becoming Paying customers. I am sure there There is an industry standard , Lots of companies build their customer base that way.
The difference with ASD and this is that ADS tried to build a company around a compensation plan, whereas ZR had a solid thriving business and added and income opportunity to it that is a win/win for all involved.
@Floored
Oh dear.
Yet any changes to the investment scheme have been superficial to date.
-changing 125% guaranteed ROI to a 90 day ROI (that’s still unofficially guaranteed at >100% of the cost price of the bids due to how the whole scheme works with the re-invest in VIP bids)
-don’t call our investment scheme an investment scheme in public
But that risk should never be whether or not the company is a masked Ponzi scheme or not.
I suppose you’d be one of those people too. Y’know, coming in here with your obvious Doctorate in Penny auctions claiming Zeekler has been around 14 years and all…
What you want to call yourselves is irrelevant. How you make your money is relevant and if you’re not selling anything, pumping money into the company and taking home a >100% ROI after 90 days mostly funded by other members, then we’ve got a problem.
Apparently according to the FTC it is when you purchase said leads from the MLM company you’re going to use those leads in.
No. You’ll have to do better than that.
So why not release that statistic? Why fluff around with other useless stats nobody cares about (because they don’t really reveal anything).
Oh, and I suppose you’d all get paid if ZR didn’t have a compensation plan then?
Along with your ‘zeekler has been running a penny auction for 14 years’ comment… epic fail.
@Floored
You can get the same comment from me: “Oh dear”.
This comment will cover most situations, whether you were serious or were trying to make a parody.
If you tried to make a parody using Poe’s Law, then try to use it in a religious or political discussion rather than a business discussion?
@Floored:
Do you think it makes sense for a company to pay millions of dollars to several thousands of people to advertise for them when there are far cheaper ways to advertise?
Do you really think that placing a spam ad on a classified ads website that’s already full of the same spam ads placed by other affiliates is really going to bring in thousands of paying customers?
What do you say when ZR affiliates have complained that even though they’ve been placing their daily ad for months, they have never had one paying customer, and others mention that it’s only other ZR affiliates who are bidding in the auctions?
On the bright side zeek has boosted alexa rankings for a whole bunch of crappy classified sites I bet they love zeek LMAO
If it’s a ponzi and you know it clap your hands (clap clap)
If it’s a ponzi and you know it and you really wanna show it clap your hands (clap clap)
Yeah I know i won’t be getting a comedic gig any time soon 🙂
I bet they don’t. Check out classifiedsgiant.com. It’s totally worthless as a classified ad site because 99.9% of everything on there is Zeek spam. You can’t find anything else, and if you post an ad it’s going to get buried in the spam.
The only thing that entire site is good for is for ZR affiliates to post their daily ad.
I’ve been with this zeek rewards for two months. I pay a company to post bids for me everyday for 10$ a month. I started with the max amount 10k two weeks ago and now I have 3 thousand dollars more in my account. Have received a wire transfer for my money I earn.
Is it a scam? …
How many legitimate retail customers do you have purchasing bids at Zeekler with their own money on a regular basis?
No you don’t. You invested $10,000 and now have 13,000 virtual points to show for it.
I wasn’t aware ZR were even offering wire transfers. And you can’t request a lump sum payout, so I’m going to call bullshit on this (?).
You tell me.
Show some proof, please.
Sorry, you failed the test.
Zeekler was started in June 2010. They existed in test form as “FSC Auctions” as of March 2010.
Apparently, *you* are the ignorant one.
@Floored
Thanks for the comic relief!!
Oz
I have 13,362 dollars I’ve earned. everyday I’ve earned atleast 140$ in interest. Every other day I have been asking for the daily amount I have earned to be payed to me.
And yes they wired it to me or you can choose check form.
Just wait until I have more people sign up and I get 10% of the 10k…thousand. And I’ll be getting bigger checks because my compound of all my $ will be more.
A good friend of mine who is a lot more successful then “OZ” who lives in 12,000 sq ft house. is making around 45k a week.
I dunno Oz I like what I’ve been seeing and able the new toys in my house/garage.
I dont get why you dont understand it’s not a scam
To give him the benefit of the doubt, it is possible he was just summarizing his experience, having invested 10k, cashed out some, requested payment to eWallet and transfered from eWallet to ban k account.
Cashing out 30% of initial investment is common in the first few months for those who are a bit risk adverse and not going for the full compounding strtaegy.
I’m gunna make this simple: do you have $13,362 in your posession right now from Zeek Rewards?
If not, then you haven’t earnt anything and as I said, just have 13362 virtual points.
Right… despite the fact that they’ve never offered bank wires (?) and abolished sending out checks weeks ago.
Yeah, that’ll show me! You go son. Nevermind the inconvenient question of where is the money going to come from?
I repeat:
@Jimmy
Well now he’s claiming ZR still send out checks and his mates are withdrawing $45,000 a week so how much benefit of the doubt do we give him before calling bullshit?
Oz you can come out to the bay area and see my paychecks and my business partner will by you a drink and go deposit his money with you
@michael
Continued dodging of the questions posed will be marked as spam.
As for your upline, an alleged 2.34 million a year narrows it down to a small list of potential suspects, perhaps Jimmy can shed some light on that.
In anycase, it’s maintained that payment does not absolve a business model. This is a tired argument from Ponzi scheme promoters – “I got paid, how can it be a scam? My upline makes eleventy billion dollars an hour and I’m on track to do the same!”
At the end of the day the business model and where your payments come from is all that counts.
– Jimmy
Yes 30% is correct.
And yes you can get a direct deposit OZ
I have 13,362 in my account have collected the day pay check of around 140 – 250$ 10 times. So I have collected around 5k this far. Only putting in 10k and collecting half already in less then a month isnt too bad.
I’m only making my compound price larger so my I will collect more $.
It’s a worldwide company and I believe it used a good amount. Out of all these type of companies, it’s the most popular one, 37% of people use this website.
Before jumping into this “Scam”**, I used my companies high powered lawyers to research this company and give me there thoughts…obviously positive.
Corrected.
10x 140 = $1,400
10x 250 = $2,500
Where are you pulling 5,000 from?
Furthermore with weekly withdrawals 10 of them puts you at roughly 2 months membership (despite you claiming to have made back half your money in one month), you’re claiming you’ve withdrawn up to $2,500 and increased your virtual points by 3,000+.
So how many suckers did you manage to convince to invest under you? And again:
At best you’ve recovered 1/4 of your original investment. And for some reason you’re continuing to insist that ZR are issuing bank wires and sending out checks.
Oz sorry i misspelled Ive drawn exactly 19 times I meant to say 20.
I represent ZR because besides working for Chevron and making 250k a year, I also can work online and make around 250 a day. To pay for my mortgage payments and so on.
I have 6 people to invest under me. All for it. ZR is where you make dollars…..simple
Your more then welcome to come to a steakhouse for lunch and get a drink, if your ever in in the bay area.
Last time I’m going to ask:
Otherwise all I heard was “I invested 10,000, got 6 people to invest 10,000 too and I’ve made back $5,000 so far on their investments.
How much of the $5,000 was a result of getting other affiliates to invest after you did vs. direct money from your initial $10,000 investment returns?
Due to the whole point expiry thing after 90 days, either you’ve made the vast majority of the money you’ve cashed out by getting others to invest (stright up ponzi), or there’s no way known you’ve withdrawn your claimed amount and grown your point balance by 3,000+ points in a month.
In any case, due to the business model you’re kidding yourself if you think this is going to pay out indefinitely. You might be only able to see as far as your own personal finances, we analyse the big picture here.
@Michael, don’t take this the wrong way, but have you taken the compliance course yet?
Just a heads up from one affiliate to another, some of the terms you’ve been using in your defense of ZR subjects you non-compliant being an affiliate.
I do know of several affiliates with mid 6 figure point balances that earn around 45k in profit sharing per week. But they are not cashing out $45k unless they set reinvestment to 0%.
Michael may be embellishing by using total cash earned at 100% reinvestment when referring to the 45k number, rather than accurately describing take home pay and point balance growth trajectory by revealing investment ratio.
There are probably a few hundred (low hundreds) of affiliates with 6 figure balances. This will become unsustainable when you picture how fast these 6 figure point balances will eventually become 7 figures.
@michael
I, too, would be interested in hearing how many actual retail customers you routinely sell bids to, and how many retail customers your upline & downline have. And I’m talking about actual people who buy bids on a regular basis, not dummy accounts you’ve created or bought to dump free bids into.
So far, nobody we’ve talked to seems to not have any legitimate customers, and I’ve seen comments on the Zeek support forums which indicate that even after posting ads for a year, affiliates aren’t finding people to sign up as regular customers, and others mentioned that it only seems to be affiliates playing the auctions.
The reason this is an issue is because if there are no real customers and all the money in Zeek is from affiliates, then you have nothing more than a big Ponzi scheme. There is no huge profit to be shared like Zeek claims is happening, and older affiliates are simply being paid with money supplied by new affiliates.
You can’t claim that it’s not a scam because you’re getting paid. Ponzi schemes always pay out a little bit, otherwise they wouldn’t work very well.
But even if it’s not a scam, do you think it makes sense for a company to be paying out huge amounts of money to thousands of people for advertising a penny auction website, when they could do it themselves for far cheaper?
@Oz
Dont be hatin’ on my homie michael… You’re just wishin you could be as successful at Zeek as him.
When you see us roll by in our Veyron/Lambo/Escalade/M1 Abrams on 26’s and pull into the garage of his 12,001 sq foot pad.
Just hang your head in shame! Zeek will last forever! BTW…I make 251K workin for EXXON, BALLAAAA!!
You hiring?
Nah, My bro at BP is though, 252K…. but then i’d be hatin on you.
Gotta love flashin the e-cash up in these forums playa
I too have been approached by an affiliate of Zeek Rewards and find this an interesting business. While I am not completely sold on the idea, the arguments presented here may or may not “prove” it’s a Ponzi scheme.
From what I have read in this blog (skimmed most of it), the claimants saying it’s a Ponzi scheme have not really proven their point, however, it raises suspicions.
If I am to understand this correctly (correct me if I’m wrong), the way Zeek earns money is by sharing up to 1/2 of their daily revenue from auctions, with all the affiliates who placed an ad that day.
This does raise some questions:
1. If there are 500,000 affiliates, and let’s say each affiliate averages $1.00/day in RPP,(realizing not everyone gets paid but with many earning thousands a day, I believe $1.00/day is fair). That means they are paying out $500,000/day in RPP meaning they have to take in at least $1 million/day in revenue.
That’s $365 million a year! Even if they are in 130+ countries as they proclaim, do they really take in that much money? Their Zeekler site really doesn’t support those figures. However, I don’t know how many auction sites they have in the different countries (if any). I would like to see those figures.
2. What is the actual average of RPP paid per affiliate? If it’s more like $10-$50/day, then their yearly totals would have to be in the billions.
I would like to take issue with some of the moderators. You have (on more than one occasion) told a responder to “prove” their postings. Yet I have yet to see a moderator “prove” their accusations either.
One example is saying the “customers” are phoney and don’t exist. That’s a bold claim so I would say “prove” it. (just trying to be fair to everyone). Now if I missed the “proof” in a previous post, my apologies.
Another common comment is people saying affiliates are “spamming” the internet with ads. My understanding is “spam” is an unwanted advertisement directed to an individual’s email account which was not requested.
Since there are advertising sites which are free to advertise “anything” from businesses to products, then if a Zeek affiliate posts an ad on one of these sites, how is that spam? If you have no interest in seeking information on a website that advertises in these areas, then why go to that site?
This is much like subscribing to your local newspaper and if you don’t like some of the ads posted, then you are being “spammed.” Don’t think you have a valid argument for “spamming.”
I really don’t care which way Zeek goes. It may very well be a Ponzi scheme, but yet it may be a legitimate business. I do believe Zeek has not been forthcoming with their figures and as such, tend to make one believe there is “something rotten in Denmark.”
As to the claims of Zeek hiring a bunch of lawyers, I don’t know of any business that doesn’t have a slew of lawyers working for them. As to the timing of the hirings, that may be subject to discussion.
I will say, anyone posting here claiming a “fact” should have to “prove” their statement before making such claims.
Just my 2 cents worth. I’ll keep reading to see how this plays out. I’m not for or against anyone posting here and am not trying to start an “argument.” But I would like to see facts and not accusations.
I don’t think I’m ready to jump in anytime soon until some of these issues are resolved. I think anybody wanting to seek out info should have facts to base their decision on. Just trying to gather information to make a decision.
@Just Looking
Uh, you said it yourself:
It’s not so much a claim as fact when you have Zeek Rewards affiliates telling you themselves this is what they do.
Furthermore we’re yet to see one affiliate come forward and admit to having actual customers (who routinely purchase bids). Meanwhile we’ve had plenty of affiliates state they don’t have any nor know of any in their downlines who have any (and some of these downlines run into the thousands).
Nope.
Zeek Rewards affiliates don’t target their messages, they just spam the internet with them because Zeek Rewards won’t pay them their daily ponzi profit if they don’t.
Advertising the company has been banned from Craigslist and several other companies for spam already.
May I briefly address the topic of – how there can be thousands in their downline? The way I understand it, 62 is the max.
@Al
Huh Zeek cap the downline, what on Earth for?
In any case true or not 62×62 is 3800+ so you could reach thousands in just 2 levels. Downline != only people you’ve personally recruited.
Thanks Oz
You are probably referring to the 2×5 forced matrix which has a max population of 62. However, Zeek actually pays out down through about 20 levels if you qualify for the 3 additional tiers of matching bonuses (every 5 levels).
I say “about 20 levels” because Zeek has a very odd concept of “every 5th level” bonus where you get paid only on your 5th level’s 5th level (and no other level beyond the 5th), and the 5th level of everyone on their 5th level, and then one more time to give you a max possible bottom row of the matrix to have 2,031,616 (your 5th level’s 5th level’s 5th level 5th level).
Zeek’s explanation of the matrix is even more confusing then what I just described above. Search for “zeek rewards 2031616” and read about the Generation Bonus, and if you can explain it better (or more accurately) than I did above, feel free!
All I know is I’ve seen and others have share large genealogy reports. It requires a lot of “clicking around” to explore each leg as Zeek’s back office only shows you 3 levels at a time.
Remember that Zeek started out as a 2×21 forced matrix and with the transition in Aug 2011, they wanted to preserve the early distributors at the top ability to earn deep into the matrix.
The top distributors (the top 12 you heard about at the Red Carpet Event making over 1 million a month) are making mid 6 figures a month just on the matrix commissions. Many have set their withdrawal rate to around 60% as they can maintain steady growth with all of the rolled up daily profit share commissions.
While most people are earning passively with only a little bit of referral commissions from initial purchase & daily profit share, the top earners have downlines in the tens of thousands to hundreds of thousands.
This is another sign of how completely unsustainable this is. While some of you made your $1k or $10k profit or even more, the top earners are milking the Ponzi for 6 and 7 figures. It’s just not possible that this can be sustained over a long period as more people with 6 figure point balances graduate into 7 figure point balances.
If Zeek has 12 affiliates earning over $1M now, what do you think they’ll have in 6 months assuming it doesn’t collapse before then? Say Zeek has 30 or 40 people earning over $1M per month in 6 months based on current growth rates.
Do you think the penny auction business in its entirety even generates that much monthly revenue?
Another factor everyone has completely ignored on the issue if bid dilution, is the final price of Zeekler auction compared to the other top auctions. If you take an item like a $250 gift card or $250 cash, across thousands of auctions at Quibids, the average closing price is $10..
Look at Zeekler, you see closing prices in the $200 range usually, because you have a bunch of affiliates with “zero cost retail bids” that they purchased just for VIP points matching and 20% commission. They are just “throwing bids away”.
Also part of the equation is Zeek has so few auctions that the average price is higher. Quibids was auctioning 4500 items per day in 2010 (don’t have time to check more recent stats). Zeek isn’t even 10% of that!
Go on to Zeekler how and see how many auctions are scheduled to start in the next 60-minutes. 10? 12? So they are running about 240 to 300 or so auctions per day? And this mighty penny auction is supposed to support tens of millions of revenue per month?
Please. This is such an obvious Ponzi for the simple fact that the retail revenue can never support it, and any attempt at bringing in other retail revenue streams is flawed because Zeek is on the hook for paying out an ever increasing VIP matching point liability.
It’s not like Zeek can pull a JBP/JSS “reset” and start everyone over from scratch. They can have a million people install their Zeebates toolbar or use the shopping portal and they still won’t generate enough revenue.
The average affiliate toolbar widget averages between $1 to $2.50 per user in 2007 – and this was when affiliates had long cookie retention like Amazon with a 30-day retention and now it’s only 24 hours. From this $1 to $2.50 per user, Zeek has to subtract the “zeebate” paid to the end-user and commissions paid to the affiliate.
They’ll need 40 or 50 million users using their toolbar and not uninstalling it, and most large affiliate sites like Amazon, Ebay, Staples, Best Buy, Target, Sears, etc. have terms that block toolbar affiliate ID intercept anyways. This means Zeebates will require users to log in to a portal first.
So not only would they need tens of millions of Zeebate customers to come close to meeting their current VIP point matching obligation (assuming they maintain the charade and keep the RPP rate the same and not screw all affiliates by dropping it), but I’m sure they will require these customers to log in to the portal first.
People aren’t that motivated to change their buying behavior for 1-3% here and there.
The online etailers aren’t dumb, they don’t want to give away money just because someone intercepts a cookie in a toolbar and rewrites the affid. They’ve all change the terms so I don’t even know what the current toolbar average is – it depends if it does search result impregnation or not.
Only the sleezy ad toolbars do that these days because most online merchants only pay on real clickthroughs.
Any way you change some of figures here, you don’t come even close to Zeek making even revenue from anything but other affiliates pouring money in (aka Ponzi).
Correct. However, I have to remind you that Ponzi schemes only are revealed two ways:
1) The owner admit it’s a Ponzi, like Madoff did; or
2) The government went in and shut down the scheme, and exposed their “REAL NUMBERS” to the world, thus “PROVING” it is a Ponzi.
Thus, there is NO WAY to prove it’s a Ponzi to YOUR satisfaction until it is too late.
I believe I’ve calculated LOTS of numbers from the 2011 Income Disclosure Statements.
* They paid out 58.5 million in 2011 (calculated from affiliates and payout average per affiliate)
* By this they must have earned at least 120 Million (probably 140) as above is US ONLY affiliates
* So average daily profit is 320K a day. As business increases, it’s probably closer to 400K a day by December 2011.
For real numbers, only Zeek would have that. However, given the amount of anecdotal numbers (I’ll be the first to admit the sample sizes are not big enough) less than 10% of affiliates have ever recruited a single customer that actually bought bids with their own money.
Well, spam now means “Send the same message indiscriminately to (large numbers of recipients) on the Internet”, doesn’t have to be e-mail any more. Twitter, Messenger, etc. can all be spammed.
I guess a far better question is… Are ANYONE reading those ads? Do they actually MEAN anything? Or is it just “make work”, much like in the Great Depression, those unemployed were told to dig ditches, and fill them back up when they finished, so they can get paid?
Governments and authorities don’t just magically decide something is a Ponzi scheme or not. They don’t have some crystal ball they pop the question into and simply wait for a definitive answer, they look at the business model – same as anyone else.
If I start up my own scheme where I get people to invest money on the promise or assumption of future returns and then pay out these returns with new investor money, no matter where I do this in the world or under what jurisdiction – it’s not a Ponzi scheme just because some court of law or authority says so, it’s a Ponzi scheme by definition because of the business model.
Anymore so than the ridiculous notion that if I murder someone it’s “not murder” until I am apprehended, or if I steal a car it’s not stolen unless I’m caught. Laws and authorities are reactive, they don’t pre-empt or stop you from murdering people or running Ponzi schemes (disguised behind penny auctions or otherwise).
You can start a Ponzi scheme in a country they are legal, doesn’t mean you’re not running one just because it’s legal there. By merit of how they function, my issue with Ponzi schemes isn’t legality but the fact that they are not sustainable in the long-term and subsequently aren’t a viable MLM business model. I think this is overlooked when people get bogged down on establishing the theoretical legalities of opportunities.
They also inherently shift the standard risk one takes in business from the usual factors that determine success and failure in business to that of the question “is it or is it not just a Ponzi scheme?”, which destroys the “all businesses have risk” argument Ponzi supporters to frequently use.
All risk is not created equal and ‘can we sell enough fries to turn a profit?’ is not the same as ‘is the company simply using new investor money to pay me my returns meaning that if no new money is invested I get nothing?’.
If McDonalds brought out a new “McInvestment burger”, nobody would bat an eyelid because you couldn’t make the case that the purchase and consumption of a hamburger from mcdonalds was a financial investment. The inherent fallacy of all this superficial “don’t say this and don’t say that” MLM compliance nonsense we’ve seen of late is the result of analysis of business models and the alarming fact that they are easily defined as investments.
The easiest way to describe what happens in Zeek Rewards and how affiliates get paid (actually get paid, as in what they have to do increase their share of the daily profit share) is to use investment terminology – and it fits, to a ‘T’. That’s what all this compliance rubbish is about (trying to hide it with layers of confusion and obscurity) but at the end of the day compliance means jack if you’re still running around with a business model that still fits the definition of a Ponzi scheme.
That being I put in $x into Zeek Rewards with the expectation that I will earn a >$x 90 day ROI. If I want to increase my investment, I simply re-invest my 90 day ROI earnings effectively increasing the money I have personally contributed into the scheme.
These funds are by and large sourced in one way or another from other investors who also wish to earn a 90 day ROI on their own initial investment and continued re-investments (compounding).
The business model folks, it’s all in the business model – follow the money and if it doesn’t add up, you’ve got your answer right there.
To start off, the average affiliate makes way more than $1 RPP/day. Considering that at the most basic level you start off with 100 bonus points with an average of 1.5%, even the FREE affiliates START at $1.50/day in RPP.
Of course you have to factor in compound growth, bonus point expiration after 60 days, and then VIP point expiration 90 days thereafter.
Regardless, any which way you try and build a financial model for the Zeek revenue requirements, there is no way in heck Zeekler can match that, especially when it’s running at about 5% the volume of Quibids!!
But they only had 11 full time employees as of Jan 2012, and 15 as of March.
No business generates that much revenue with such high margins as Zeek claims and has such a small employee-to-revenue ratio.
When you consider all of the customer support issues, despite the outsourcing that Zeek is doing, if the REAL revenue numbers were that good, they would hire more people like any legitimate business on the planet.
What do we see in common with most Ponzis? Very thin employee to revenue ratio. Why? Because they operate on negative margin so they have to keep costs down.
I was referring to actually paying out cash, not “earning” points daily. But I do agree, it would appear they are “paying” out more than they are taking in on the auction. The question lies is how many “paying” bid customers do they really have?
I also notice the items that have for bid don’t seem to equal the same quality and value of products the other sites offer. It would appear they need to bolster their products for bid if they really want to generate volume.
I’d like to understand the maths – why does the company allow a maximum of $10,000 initial investment? If the numbers add up why don’t they allow someone to put 10 million in?
That’s assuming they actually care about bringing in revenue from the auctions and that they’re not just a front for the ponzi scheme.
The auction site itself is just another big red flag. Zeekheads claim that zeekler is the #2 biggest penny auction site (if not #1), yet they merchandise they offer is crap compared to other auction sites.
Forget the penny auction, if I wanted the stuff they’re offering I could just run down to K-Mart.
Wow! Everybody is so passionate here.
First, I need to clarify that I’m not a ZR affiliate, although I’ve been approached numerous times and seen countless copies of checks and screens showing thousands of VIP points.
Here’s my definition of money: what’s in my bank that I can use to go grocery shopping or get drunk with. That’s real money. Everything else is virtual and has absolutely no value whatsoever. Whether ZR is a Ponzi or not is NOT the issue.
We all get into biz opps to make money. If money is to be made, let’s jump, if not, let’s stay out. Let me also point out that the vast majority of online opps never last beyond 2 years, legit or Ponzi.
I have studied these online opps for many years and most have the same mode of operations. The reason I didn’t get into ZR was because I felt that they were already near the termination point.
Now that they have deactivated members in 6 countries and pretty much stopped making real cash distributions, I’m getting the nasty feeling that they’re in a “winding down” mode. Any comment?
Not true. If it was an actual MLM it would last far longer
What you are stating that won’t last 2 years is Ponzi
Actually if it reach a year that is amazing
I remeber ten years ago when herbalife began and it is still alive today
I said most, not all.
Avon is still around. And ZR has been around for more than a year. I’ ll to tip my hat to that.
Avon doesn’t pay commissions and guarantee an ROI with no external revenue to back it up. 🙂
Your just Jealous You dont have a Company like this. I just started and made $2,200.00 in thre months with a $1000.00 Investment.
I have a friend who started in January and allready cashed out $9,000.00 and the person who got him into Zeek just cashed out $60,000.00 So all of you non belivers can just BITE ME.
P.S. Zeekler has been around 14 Years
Yeah… jealousy that’s it. Man how I wish I was at the top of a Ponzi pyramid.
Move along folks, just another ‘I got paid so it’s not a Ponzi’ flimsy argument.
Well, that pretty much sums up the IQ of the ‘I got paid so it’s not BS’ crowd. Zeekler launched in 2010.
And by the time your profits reach $9k, your sponsor will have cashed out how much? And his sponsor?
You have no hope of making $60k because by the time you reach $60k your sponsor’s sponsor will be cashing out mid 6 figures, along with the thousands of other affiliates who will graduate into this uper-echeclon, and then there are dozens who are in the 7 figure cash out range.
You think all this Zeek revenue is coming from Heaven?
P.P.S. I’ll pay you $60,000 if that statement was even remotely close to be true within 11.5 years. It’s people like you that fall for scams like this.
You are lucky you made your money, but don’t you have any empathy for the thousands that are coming on board now that may lose some or all of their investment?
Standard “sour grapes” fallacy.
Followed by “it paid me” fallacy…
And followed by another “it paid me” fallacy… AND anecdotal fallacy.
So go live well, it’s the best revenge. Why bother posting here? Unless you feel a need to DEFEND what you’re doing?
Zeekler launched in June 2010. Get your own facts straight, as it undermines your own reputation. You stated with none, and you just gone into the negative (i.e. laughing stock).
Did Dawn ever mentioned they didn’t get their required auction license until March 2012?
If Zeekler has been around 14 years, then why can’t they work out their IT issues?
You sure your still getting paid? because no one has been paid for about a month…
Yes I too have a friend that has pulled 9k out on an original 1k, has another 60k still in,But, that’s not the point here, the point is “whats happening now?”, not what has happened…
All of these types of Biz Opps, Ponzi’s or what ever you wish to call it pay people, many times a very substantial amount of money, if they didn’t they could not be able to perpetuate the scam, ponzi business or once again What ever you wish to call it…
People would not gewt all hyped up and join, I mean why did you join?, I would have to guess the idea of getting 1-1.5 percent return daily!!!
Have you ever did the math on that, that is on the low end 30% per month, 360% per year!!!, does that not seem at least a little bit out of the ordinary?
Wow. Was just introduced to ZR yesterday. Had never heard of it before.
A friend introduced me and seemed pretty anxious to bring me on board. He and his wife put about $10k into this 3 months ago. Says he’s up to about $36K today. BUT… I could sense real trepidation in his eyes as he explained (or tried to explain) his balance sheet to me.
Looking at the computer screen I asked him if he could pull the $36K out today if he chose. He said yes then attempted to qualify his answer with mumbo-jumbo about different aspects of the compensation calculations.
It was obvious he didn’t have a clue about any of it but was desperately trying to get me onboard. After reading hundreds of posts here I can see why. He needs to sign-up two new devotees each month or his initial investment is going down.
After reading these posts I’m convinced he’s already lost his investment, his dream and everything associated with ZR. This whole thing just doesn’t pass the West Texas Smell Test!
No Ed, the 36000 that’s in their account is not money is just VIP points. But base on the company 1.4% daily average profit sharing they can request a paycheck of $3528 if they like but that’s not how it work either.
The company recommend you to cash out 20% which is $705 per week of your earning and repurchase 80% back so that way you can maintain your daily vip points balance that way you can continue receive residual income.
Ok, after reading all this information on ZR, that this company my not be illegal, I should like twice before brining other people on board.
Or is ZR working on these issues they are having now so that we don’t have problems later down the line.
@Maureen
ZR’s idea of working on issues thus far is linguistic compliance (don’t say this, don’t say that) without actually changing the fundamentals of the business model that represent a Ponzi scheme (invest $x, earn >$x over 90 days and earn more if you recruit others and convince them to invest).
a little confused by so many conflicting opinions and its hard to take many of what you guys are writing seriously.
Some of you are saying you cant withdraw any funds or if you can only a very small amount a day. Well, with my own eyes I have seen money being made and then transferred from zeek rewards to e-wallet(payza) to their bank. Im not sure why they are able to make money and others here have not. I can only tell you guys I have seen it done.
And, for the account that I viewed i saw close to $9,000 being withdrawn at the end of june, $8,000 at the start of this month and another $3,500 on the 9th of this month. Not sure if this helps or hurts the argument.
I just sent my money in and gonna test it out myself. I’ll be back to let evey one know how it goes. I don’t plan to recruit 2 members a month as I have seen no mention of this anywhere on their site as a requirement to make money.
The only thing I plan to do is work hard and list the adds and tell my friends my experience with this. Crossing my fingers
I always say if one person can make money doing it then so can I.
That attitude will probably help you. But in the long run, try to expand “attitude” so it becomes “mindset”? You already have most of it, in that you’re willing to accept both positive and negative information.
You’re showing attitude in the “Everyone has the same chances, it only a matter of attitude and hard work”. You’re showing mindset if you’re testing how true it is, “Is it really true that everyone has the same chances here?”.
I’m a salesman, or partially former salesman right now. Having the right attitude is clearly one of my tools, but I don’t consider it to be the main tool or the only tool I can use. In some situations it will clearly be the wrong tool, like being equipped with a wirecutter when you really need screwdriver “Pozidriv 2”.
The right mindset is about identifying the right tool, and to use it where it has the wanted effect, and to switch between the different tools you have when needed. Or add extra tools, or hire someone equipped with the right set of tools and knowledge in how to use them.
How many Madoff victims relied on social proof and lost millions? “It has paid someone I know” does not guarantee it will pay you.
Yes, there is some risk/reward analysis you need to make, but are you comfortable gambling on an illegal Ponzi that has many risks outside of your control?
Oh, I understand. I find it hard to take some of the Zeek debaters seriously as they don’t come armed with any facts or understand about cognitive biases, but I do try to explain the biases and why one fact doesn’t make a case.
What you need to understand is there are TWO things accumulating one’s ZR account: VIP Points, and “cash”.
You get “cash” through at least two ways: “commission” based on “sale” of bids (purchased by your “downlines”), and through “RPP”, the daily share.
You can choose to allocate your RPP to 100%, which means the entire RPP will be added to your “cash”, you can do LESS than 100%, which means some of the RPP will go to grow your VIP points instead, and the rest to “cash”.
If they have a decent amount of “cash” accumulated, they can request a “cash out”, which then transfer it to eWallet (subject to fees and whatnot).
It is this last part you witnessed, NOT any of the accumulation parts. In other words, you saw the sausage, you didn’t see how the sausage was made.
It was removed during the March compliance revamp.
But that’s not hard work, is it?
Given unlimited time and talent, it may be true. However, neither is infinite.
Actually I did see the sausage. She brought in a total of 4 people within the span of 6 months. She stopped after the 4 which was the first 2 months.
She now has accumulated quite a bit of “points” which to me is cash if she can withdraw these “points” and turn it into cash. Again, she withdrew her funds in June and July. So anyone that is saying you can’t withdraw cash anymore is flat out lying.
I saw it and it was in the ballpark of $20,000 in aobut a 1 1/2 weeks time. How many “points” has she accumulated so far? about $60,000.
The sausage can be pink elephants in the clouds for all I care. Whats important is she made back her money with profit as recently as of July 2012.
Im not saying this is easy and neither did my sponsor. What they did say is that it take diligence. Hard work is doing something consistently every day and as easy as 5 min a day sounds not everyone can do it. Don’t know why but its true.
I’ll be back to give my own experience. To let everyone know how it goes. Im a diligent worker. I’ll even post pictures of my accounts here if it helps. I like a lot of people really want to know the truth and the only way to find out the truth is to do it.
@Lix — thanks for the clarification. It wasn’t clear from your initial description.
You cannot withdraw points. The points merely entitle your friend to a share of the RPP daily, which can be “cashed” as I described above… in dribbles. And points expire in 90 days.
There are plenty of complaints about people not getting paid. Many of them are reported right on Zeek’s own support forums. Thus, there’s no denying they *do* exist.
Whether there are significant number of them is subject to debate as you have to define “significant”. In the meanwhile, the problems are fixed and the debate is OBE “overtaken by events”.
Why is posting ONE AD a day not easy? You literally can do that in about 2 minutes.
We have no problem with your experience. However, “personal experience” is also called “anecdotal fallacy” if you portray it as the universal truth. Just because it happened to you or your upline doesn’t mean it happened to EVERYBODY else.
MYSELF AND SOME CO- WORKERS WERE INVITED TO SIT IN ON A SEMINAR AT OUR OFFICE OF A GUY WHO INTRODUCED THE OWNER OF OUR COMPANY TO THE PROGRAM. THE OWNER HAD BEEN IN SINCE 3/2012 BUT WANTED TO SEE HOW IT WAS GOING TO WORK FOR HIM BEFORE BRINGING IN HIS EMPLOYEES.
I HAVE 2 LITTLE ONES TO THINK ABOUT WHICH IS WHY MY HUSBAND AND I ALWAYS LOOK INTO REVIEWS, INTERVIEWS, RESEARCH DONE, REPORTS OVER TIME ON ALL COMPANIES INVOLVED BEFORE WE INVEST IN SOMETHING.
ON THE SUFACE IT ALL SOUNDED EXTREMELY EASY,EFFORTLESS AND W/O DOWNFALLS, BUT NEVERTHELESS THERE IS ALWAYS AN INVISIBLE VEIL YOU CANT SEE OR THAT IS NOT BEING PRESENTED TO YOU.
AT THAT POINT IT IS YOUR JOB TO FIND OUT WHATS BEHIND THE VEIL. OTHERWISE YOU MIGHT AS WELL JOIN THE MASSES OF CONSUMERS OUT HERE WHO ARE USEING PROGRAMS TO GET OUT OF DEBT; CONSOLIDATION, SETTLEMENT, CREDIT COUNSELING, ONLINE MARKETING, HERBAL LIFE, BEACH BODY, ORGANOGOLD, AMWAY…ETC. AND THEY DONT RESEARCH THEM TO SEE WHAT THEIR CREDIBILITY IS, THEIR SUCCESS RATES,IF THEY ARE FOLLOWING F.T.C. GUIDELINES, ARE THEY COMPLIANT WITH COINCIDING LAWS AND ARE THEY STRADDLING THE SCAMLINE.
IF THE FOOT WORK IS NOT DONE THEN WE HAVE NO ONE BUT OURSELVES TO BLAME IF IT DOESNT WORK OUT FOR US THE WAY WE EXPECTED B/C WE NEVER TOOK THE TIME TO COMPLETELY WRAP OUR MIND AROUND THE “FULL” PICTURE.
ALL PICTURES HAVE A BACKGROUND BEHIND THE IMAGES THAT STAND OUT THE MOST, ITS UP TO THE INDIVIUAL TO LOOK PAST THE OBVIOUS AND SEEK OUT THE UNAPPARENT OR RATHER THE INDISTINCT!!
@JM0403
The quick and direct answer is:
Zeek is probably a Ponzi scheme, and will fail if the recruitment of new investors slows down. So if you join it, you will probably extend it’s life a little.
They also have potential upcoming trouble with the IRS, because of the tax returns for 2011. This is an unresolved issue, and we expect something to happen (an audit or something).
I don’t know what kind of information you’re interested in? Most of the information we have here is for people who wants to avoid something, but we have also information for people who wants to join. The comments here are initially balanced between different viewpoints, but we will mostly do critical reviews (trying to detect problems in a business model).
This website has TOO MUCH information about ZeekRewards, so the important information can often be “drowned” in other stuff, like detailed discussions about something. Currently ther are over 20 articles about Zeek, with appr. 3,500 comments.
All the articles here about Zeek can be found by clicking the company name, in the top of the article or in the menus to the top right side. Looking at the titles can give you a quick overview.
If you like to balance your information, you will find positive reviews on MlmHelpDesk.com, Troy Dooly’s website (link in the bottom of the menus in the top right side here). Here’s a direct link to one of the comments there, showing the “true potential” of the VIP point compounding system. 🙂
Are you sure you got the right information there? I don’t ever remember reading you have to sign up 2 new devotees a month or at all….
You need to sign up 2 PRC’s to get unlimited free customers from the company rotator. Or you can make up your own fake free customers if you have enough proxy servers (3 customers per IP limit). Or you can pay expensive fees to get thir party customers. This really only affects those with over abput 25k points where you start needing a new customer about every 3 days once you’ve reached the 1000 point limit per customer.
Zeek has delayed and made nebulous the PRC requirements that were supposed to be announced April 1. Then delayed to June1, then July 1, now it is going to be some form of Zeebates affiliate shopping portal crap that the Zeek faithful will pretend to be some master stroke of economics when it has been done a million times.
Zeek is struggling to find a form of “retail customers” that is easy for affiliates to aquire so as not to stop earning daily RPP, but is just barely “non-passive” so as to pass the Howey test and not be ruled an illegal investment; and not a Ponzi due to external revenue.
Unfortunately, no matter what they do (PRC’s, Zeebates, pigeon framing), the bottom line is any other source of revenue will pale in comparison by 10x or more to the ever increasing ROI liability incurred by affiliate investments.
Just follow the money.
Also, isn’t it an indirect admission that the penny auctions generate no significant external revenue if Zeek is spending all this time on Zeebates while publicly pretending that having 1.2% of Quibids transaction volume makes them “the second largest penny auction”?
Troy, you say:
You say Quibids does 8000 auctions a day. Zeek does about 140 or so a day.
1. Do you have any idea how much Quibids spends in marketing? (I honestly have no idea)
2. Do you believe Quibids spends in marketing more than Zeek pay’s their affiliates for placing their 1 ad a day.
How many zeek auction’s were there a year ago compared to today? Is there marketing strategy actually growing the penny auction business?
Can you ask Dawn how much volume Zeekler does a month? No reason it should be a secret. If they’re proud of their business and growth, they shouldn’t have any problem reporting their numbers. Every network marketing company does when things are good…”fastest to a billion” etc.
I really think getting the answer to that question would clear up a lot of the questions regarding the legitimacy of the business model.
If you find that Zeekler is doing a million a month (or whatever #) in volume (cordless screw drivers, alarm clocks, gift cards, lava lamps etc.) yet paying out 20+ million a month in commissions, the business model is suspect and it would be the worst marketing campaign in the history of business.
Quite frequently you mention the other shopping sites…I’m guessing that’s a negligible amount of volume.
Unfortunately, even if Zeek had good retail penny auction numbers it would STILL be meaningless due to matching VIP points resulting in negataive revenue when you factor in the ever increasing ROI liability.
The fact that Zeek won’t even reveal these inflated (due to matching VIP points) numbers speaks volumes!
After careful analysis, I have determined the fundamental difference between BehindMLM, and MLM Helpdesk.
Oz is a wizard behind a curtain; and Troy, although factual and legendary, is associated with Zeek mythology and tales of fantasy.
Good point Jimmy! Funny MB!
Jimmy, do you have an educated guess in what Zeekler does in monthly volume. I don’t have the slightest idea.
I tried to warn some prospects and directed them to Oz, but they didn’t listen and followed a yellow d*ck toad to Zeek Land.
Now? They need to make 500-700K a DAY, IMHO, to pay out 100 million+ this year. That’s a rough guesstimate.
Did any of you read this in the users agreement ? Sound like the can blow this up at any time little scary
Has anyone look at there spread sheet and rewards ? If you do the math and start th 20/80 split your VIP point will go upside down and you will be negative.
If your points are negative do you owe zeek? My opinion is there is loop hole in the model that will make zeek $$$$ when the loop hole starts to close good luck getting your $$$.
I just wanted to add my two cents worth. I work for a large multi-national retail organization, which does Billions of dollars of sales ever year, however only a small portion of this is profit.
After Zeekler has paid for the auction items, salaries, general administration, overhead, business taxes, etc, what is left is Net Profit.
Examples of large companies net profit;
Wal-Mart 3.31%
Amazon 0.99%
Home Depot 5.81%
Quibids net daily profit is 5-10%
http://ycharts.com/companies/WMT/profit_margin
http://ycharts.com/companies/AMZN/profit_margin
http://ycharts.com/companies/HD/profit_margin
http://www.quibids.com/en/quibids101/blog/7-Does-QuiBids-make-excessive-profit-on-their-auctions
Net Profit Margin(or Profit Margin) is defined as: A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings.
Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.
Profit margin is displayed as a percentage; a 20\% profit margin, for example, means the company has a net income of $0.20 for each dollar of sales. Also known as Net Profit Margin.
Read more: http://www.investopedia.com/terms/p/profitmargin.asp/#ixzz20uTV8pU2
Many estimates that I have seen is that Zeekler is paying out $1,000,000 per day in order to achieve this, Zeekler would have to sell a hell of a lot more than a $1,000,000 per day.
If we use QuiBids daily net profit of 5-10% as posted online we see that Zeek has to actual sell, $10,000,000 to 20,000,000 dollars per day to achieve a net profit of $1,000,000 per day. This is something my friends don’t listen to, they regurgitate the kool aid, that Zeek shares 50% of their profit, the business is legit, it pays, join and find out!
I am in the supply chain business of a multi-national company. You can not ship this much product with 12 people, it takes my company over 600 people to do this and that is just the supply chain. Now add in the 200-300 buyers, inventory analyst, merchandise mangers and all of their assistants you quickly see that Zeek would need 800 to 900 people to just handle the supply chain.
On top of this you will need up to 100 IT professionals. When I refer to the supply chain it starts with the business relationship with each vendor, placing orders, receiving goods at your warehouse and shipping those goods to the end customer.
If you stop and look at how much money they would have to make to achieve $1,000,000 in profit per day and it would have to grow exponential every day, you quickly come to only one conclusion. This is a Ponzi.
I just don’t understand why so many people have closed their eyes to the basic truths of business and allow themselves to be sucked into this and other schemes.
My friendships of over 25 years are now on rocky ground because my friends are over enthusiastically trying to get me in, but get hostile when I try to point out the flaws in their so called ‘legit’ business, I’m just being negative, just try it, you will make money then you will see. Is the only response I get.
I’m tired of the rose colored glasses outlook that all of the zeekheads are portraying and now I have friendships on the line because of it.
One of the red flags that went up when I first heard about Zeek’s business model is the idea that they’re not only sharing 50% of their daily profit with people who are just placing one spam ad every day, but that the auction site is huge enough to afford to do that. Another red flag was the idea that each affiliate placing one ad is bringing in huge numbers of customers to the site and making it even more profitable, and each new affiliate which is recruited is bringing in even more customers, to the point of infinity. We all know that infinite business growth is impossible. True, there may be 7 billion people on the planet, but only a tiny number of them will be penny auction customers.
When you realize that zeekler.com only has about 100-200 auctions per day, they’d need to be making about a million dollars profit on each one to be able to pay off everyone’s point balances at the rate of $1 per point.
If one can start at $10k and earn 15x on my money in 1 year by recruiting nobody, doing nothing but placing 1 spam ad a day and paying from some fake customers to meet my “give bids away” requirement, surely Zeek could find traditional financing including venture capital or any variety of private investors.
At their revenue growth, they could IPO in just 1-2 years. But you need real customers and real revenues (that are not part of a Ponzi).
Jimmy, can you comment on all the e-wallet issues. Zeek members on Facebook are lighting up the board with complaints.
Sounds like nobody’s getting through to zeek, nobody’s getting through to the e-wallets, nobody’s receiving communication from the company and people are nervous about this new thing called ego-pay. Is anyone currently getting paid?
Sounds like the masses are getting restless.
IIRC, EgoPay is going to be a division of Payza that handles high-risk payments (i.e. anything that could be associated with scams, like HYIPs) and presumably includes higher level of tracking and verification in case authorities want to track the money trail.
If Zeek is gonna get shunted over to EgoPay from Payza that’ll be some fireworks to watch.
@e –
The support issues aren’t anything new. I myself have not had a single ticket answered without lots of escalation by email or support forum, and even then only partial success.
The problem Zeek is encountering now is two fold IMHO:
1. Many people have had problems for so long, they are no longer “being positive” and just sucking it up but are now actually voicing their concerns. The effectiveness of the excuses of “growing pains”, “it’s the affiliates fault for being stupid”, “it’s the eWallet’s fault”, and “just be patient” are all thinning.
2. Zeek’s growth is reaching beyond the MLM faithful to normal people with more rational thinking processes. These people compare Zeek to their own personal and employment experiences, which is why you are getting lots of comments like “if I treated my customers like this…” and also some analysis from people around customer to support ratios, supply chain cost management, IT and website analysis, etc.
In other words, the new affiliates use more rational analysis when looking at Zeek’s problems and are not “true believers”.
On the eWallet issues, STP is constantly down, not just during evenings USA time “for maintenance” but often down during the day. Payza is introducing a new processor called EgoPay to get around the increased legal/regulatory scrutiny they are receiving dealing with HYIP’s.
It will be interesting to see if Zeek gets kicked out of Payza for being a HYIP/Ponzi what spin they will make. Affiliates bent over backwards to sign up with NxPay and if Zeek forces everyone to use EgoPay instead of Payza that will start raising more legitimacy questions.
Why is Zeek dealing with these bottom dweller third party, offshore, extremely high fee payment processors in the first place? Those of us who follow the HYIP industry know why – high risk, questionable legality… no matter how much linguistic gymnastics they do around the program to make it seem legal.
If the structural problems weren’t bad enough, Zeek isn’t helping itself with LOTS and LOTS of shoddy business execution. You have affiliates who created 5, 10, one reported 12 accounts because Zeek’s sign-up page had website errors when signing up, so new affiliates though the account didn’t go through.
There are still lots of problems with credit cards transactions not working, random eWallet callback problems when trying to pay Zeek for something. Credit card companies marking Zeek charges as fraud and requiring affiliates to call in to clear the fraud alert. Merchants showing up from odd countries and some credit cards charging currency exchange fees.
Many are upset that they cannot use cash available in their back office to pay for the $30 mandatory annual video and compliance package. Zeek says that is because it is going to a third party, but then this raises questions more questions such as why can’t Zeek just handle the accounting internally.
Looking at this form a HYIP lens, Zeek wouldn’t want to pay for the $30 mandatory fees with “cash available” because it just transfers money from the HYIP internally. Zeek wants to suck in NEW EXTERNAL MONEY. View it from that lens, and all of Zeek’s answers make sense.
You see comments like this on a daily basis now. It’s getting so often even the Zeek whack-a-mole-moderation can’t keep up:
There’s probably an error in your formulas. The VIP balance will continue to grow slowly with 80% reinvestment in most spreadsheets. It won’t go upside down in any cases.
Yeah KChang…I just saw some recent posts…their own members are now calling it a Ponzi.
No error in my formula after 90 + days in zeek ther formula deducts the 30 days prior earning . My friend is on zeek and showed me is overall VIP points to payouts and when he did the 20/80 over time your VIP points you get will be over ridden by the previous 30 day reward this is over time.
Trust me there Is a lloop hole and it will close soon once you see zeek change percentages and pay out reductions that you are only aloud to take x amount daily as per 100% the ship has sunk.
With an average rate of 1.4% to 1.5% daily RPP, an 80/20 will not go down. There way be an initial dip at day 90 if you switch to 80/20 before day 90, but it will bottom out at day 90 and continue to climb indefinitely unless the daily RPP rate changes.
@Lbi — playing with the spreadsheet a bit, you’ll see that as long as they maintain average of > 1.1% daily and you do 100% repurchase your balance cannot go down even with expiring points.
What’s 1.5% and 1.1%’s difference? 27%.
So you can cash out about 27% and keep your point balance static, roughly speaking.
New topic at mlmhelpdesk. Does Troy have enough inside information to determine whether Zeek is a ponzi or not. He emphatically believes its not. Read new comments re: MonaVie and Zeek.
Correct it to 90 days instead of 30 days?
“After 90 + days their formula deducts the 90 days prior earning”.
Glad to see President of MonaVie N.America call Zeek a ponzi. Troy still thinks all the critics are wrong, but at some point Troy needs to look at the facts from a different lens.
He still wont move away from “matching VIP points = GV” when they clearly are the not and is at the heart of the retail penny auction Ponzi revenue masquerade.
The problem with Monavie folks calling Zeek a Ponzi is all Zeek defenders will call “sour grapes” because of the noted “defection” of a couple “black diamond” affiliates who proclaimed that Monavie’s dead which is why they jumped ship.
@Jimmy — the problem is Troy right now is confused. He won’t back from the “VIP points = GV” or “bonus pool” even though he admitted that penny auction really has little do with MLM and has to do more with direct marketing, but he still insist using MLM paradigm.
When I use MLM paradigm at him, he deflected by claiming penny auction is not really MLM.
When I don’t use MLM paradigm he starts using MLM paradigm.
Confused the heck out of me. For a moment I thought he’s using “no true scotsman” fallacy but he’s not even doing that consistently.
True, however, the President of any MLM with a billion dollar in sales calling Zeek a Ponzi carries some amount of weight. And if the bravado by Zeek corporate that they will sue Randy Schroeder is true (true that they threatened to sue), that will be an interesting development because Zeek would expose itself to discovery in court if they sued Schroeder/Monavie.
Since the primary claim they are suing for would be defamation, and the truth is the ultimate defense against defamation, Schroeder would be allowed discovery on all things related to proving that Zeek is a Ponzi.
Also, of all MLM’s, MonaVie is probably the most litigiously aggressive AND they have deep pockets, meaning MonaVie would have the means and fortitude to fight any lawsuit from Zeek. Contrast this with Zeek threatening to sue any random blogger or journalist, who should have the law on their side, may not have the money or want to deal with the headache.
So I think this development is the most significant to date on the public assessment of Zeek – is it a Ponzi or not? It’s discussion has moved from the “fringe critic blogosphere” to the mainstream within the MLM industry.
I emailed Randy and recommended he address the Zeek issue on the webinar…and according to Randy, I’m not the only one.
Yes Zeek, let’s get you in the spotlight in a court of law! I didn’t hear Zeek was taking action against MonaVie.
I’ve posted the following comment on Troy’s blog:
If they did sue MonaVie, they’d need at least 6-8 weeks (if ever) to get the money out of their e-wallets to pay the attorneys. LOL
Nice point K. Chang…Check!
Hmmm… Troy’s reply is as cryptic as ever. He claims Randy’s intentions are clear and he assumed nothing. Yet I listened to the conf call three times, between 5 and 8 minute mark, and didn’t hear ONCE about the 2 “defectors” or now they’ll get sued. Is it elsewhere in the conf call?
No, the call has nothing to do with the lawsuits as all. That’s just something Troy added to the headline story. It’s kind of irrelevant until we get the facts about the lawsuit’s.
He’d like to paint the picture that MonaVie is sue happy, yet several other high ranking pins have left in the last couple of years with no mention of any lawsuits. MonaVie isn’t on a mission to sue everyone who chooses to leave.
A lot of MLM’ers are working both Zeek and their other program because Zeek doesn’t require that much active work.
Some MLM’s do not allow dual programs, but the thing with Zeek as an investment scheme/Ponzi is you only need to put in 1/20th the time you would a normal MLM to promote.
Randy Schroeder needs to head over to mlmhelpdesk and learn a thing or two.
Doesn’t he know using the word “investment” is against compliance…
Is there anyway to look at the Zeek support forum without being a zeek affiliate?
Even if it is 90 + days etc you have to hope zeek stays in business for 90 + days I think it is at the end you may get 90 days if your lucky to pull out your investment. If you got into zeek a year ago your good as long as you pulled out some $ . I feel the end is coming soon
If you do an 80/20 your points will absolutely go down after 100 days or so. What your not putting into the formula is that it is starting to retire points that made 100% profit. So it will infact start to go upside down after 100 – 120 days.
@Steve – the dip depends on when you switch to 80/20.
If you switch to 80/20 on day 91 exactly (after the initial points are retired after day 90), your points do not dip. The lowest point is at day 91. You have a small dip on day 180 but it’s minor.
I don’t know what numbers you are looking at that shows 80/20 at 1.4% to 1.5% dips. Just simplify the math and do a straight 80% and you’ll find that as long as the daily rate is 1.39% or higher, an 80% reinvestment (with 90 day points expiration) will always increase over time.
What is perilous for Zeek is when the rate starts dropping s, the inflow of new money dries up, and as a result, people will flock to the exit in droves causing the whole money scheme to collapse.
@Jimmy
And keep in mind, we’ve already seen that happen with NXPay. Dawn stated the reason they had to remove it as a withdrawal option so quickly is because affiliates weren’t making enough deposits (purchases/investments) into Zeek’s NXPay account for them to keep up with withdrawals with.
Zeek Rewards have just recently re-flipped the switch on NXPay withdrawals after a accepting a few weeks of member deposits to top up the account. Will certainly be interesting to see whether or not it implodes again in a few weeks.
Imagine not enough money coming in to cover withdrawals happening across all three payment processors!
I am and know several “success stories” I’d be willing to bet u don’t reAlly know what your talking about. I have made money with zeek and continue making $ everyday.
@Steve
Of course you’ll get paid, as long as new members invest new money into the system and existing members re-invest their daily ROIs.
Doesn’t change the Ponzi business model though or prove legitimacy.
Ah, the standard “it paid me (so I don’t give a ____)” argument.
Interpretation a) it paid me therefore it cannot be a scam
This version is a true logical fallacy that can be tackled on many levels.
Simplest way is to cite a counter-example, where a scam paid people. Pyramid scheme and/or Ponzi scheme will pay *some* people for extended periods of time. Bernard Madoff’s Ponzi lasted almost 20 years, and may have gone on even longer had the economy not tanked.
It can also be considered a straw man argument, where the author considered “scam” to be only “it took my money and didn’t pay me”, instead of the broad range of scam that includes pyramid scheme.
It can also be considered a fallacy of composition. It may not be a scam “to him”, but his experience does NOT indicate complete truth, i.e. “if it’s not a scam to me, then it’s not a scam (to everybody).”
Any way you dice this, it’s a logical fallacy.
Interpretation b) it paid me therefore I don’t care if it’s a scam
This version is an opinion, not a refutation of the original premise. It is equivalent to “so what?”
So which version do you mean?
Not that it matters. You used a bogus retort either way.
could any one explain how many (free) costumers I need to have to quilify for VIP pool. Does it matter how much vip balance I have? What if I am a free member?
Can someone answer this: doesn’t the majority of the “commissions” paid come from the profit of the auctioned items, NOT from bids purchased by new members? How is that not sustainable?
It’s like pulling a slot machine in Vegas. A lot of money is left in those machines by the losers. There is an occasional winner. The company auctions a $500 item, the winning bidder gets it for $100. In one cent increments, with each bid costing one cent plus one dollar, the company takes in $10,100 minus their $500 cost = $9,600 profit.
Not all the bids are free bids given to bidders. I would think most are purchased by people caught up in the excitement of the auction. Half the $9,600 is used to pay the “commissions”. These auctions are going on worldwide, 24/7. That adds up.
Am I wrong? The money comes from all the losing bids in all the auctions. Only one bid per auction pays off, and that bidder generally gets a great deal.
@K.Chang,
Why does hubpages show that your Zeek hub is currently unpublished?
Interesting concept Mark, Although the bids are not actually purchased by real buyers, but by those in the business, your thought process is “spot on”.
When I first looked at Zeek, I thought it looked like 1. an investment scheme, 2. a Ponzi scheme, 3. a Pyramid scheme, and 4. an illegal lottery or casino operation. I did not get involved for those reasons.
After a year of continual analysis, my opinion has not changed and you have reinforced #4.
We don’t know how much revenue comes from retail customers vs. affiliates. Zeek refuses to disclose that ratio.
However, even if the percentage of retail revenue was greater than 51%, the issue is that as an affiliate you get paid 20% commission + matching VIP points for every retail bid purchased. So Zeek is paying the equivalent in VIP points and already paying the affiliate 20% commission.
This is called negative revenue. Zeek takes on more liability than it earns in revenue.
The answer from Zeek supporters is that Zeek will simply lower the daily RPP, and therefore the liability is not 1 point = $1. However, when the daily RPP rate starts dropping, everyone will move to cash out their points.
So the defense that “there is no liability because there is no guarantee of future profit” is a non-starter by definition, because no one would invest in VIP points if they couldn’t earn back more than they put in.
On your math, you also need to account for the never-expiring BOGO offers which reduce the revenue per auction. But in general, that is an accurate description.
Someone at Zeek sent a complain to hubpages.
That’s the game they play. Are you allowed to export the content, if not the comments? You need to host it on your own domain. It’s easy to take down content hosted on any article or web 2.0 site these days, because the providers don’t want to spend time or have liability so they just take it down automatically.
This makes you really appreciate the work Oz does here and PatrickPretty as well.
Copy of the content was forwarded to Eagle Research, another anti-scam website.
The part that isn’t sustainable is the “passive investment” part, where virtual “profit” is generated out of thin air.
The core of the business model is “the compounder” and the network part, not the auctions. “The compunder” is the system where money invested is converted to VIP points, and will generate daily ROI for 90 days (RPP points), can be reinvested on a daily basis and can eventually be withdrawn as cash in smaller portions.
The stream of money in “the compounder” goes something like this:
A. Money coming IN from newly recruited affiliate.
B. The same money going OUT to old affiliates, but where the company can keep their part of the money.
C. The money is converted to VIP points, and from this point there will be no real money involved, only virtual “points”.
D. The VIP balance generates daily ROI in the form of RPP points that can be reinvested, making the VIP balance grow.
E. After some time, the affiliate have become one of the old investors himself, and can start to withdraw some of his daily RPP as cash (see point B for how the payouts can be supported).
***************************************
This is the CORE of the business model.
* Money coming IN –> compounding for 3-6 months or more (no money involved) –> money going out in smaller portions on a daily basis.
***************************************
We can then add the other parts of the business model to the core, the other streams of money coming IN.
* membership fees and other fees
* retail bids and VIP bids sold through affiliates
* any retail or VIP bids sold outside the affiliate system?
* any profit generated through the auctions
* any revenue from the FSC stores?
* any revenue from Shopping Daisy?
We don’t know accurate numbers for any of these streams of money coming IN, but I have been asking questions to affiliates for more than 6 months about them.
* “How much have you sold for through your FSC store in the last 1 or 3 months?”
* “How many real paying customers do you have?”
THE UNIQUE BID AUCTIONS
Bids spent in auctions don’t generate much revenue in themselves. They are not MONEY, but 100 bids spent in an auction will raise the price for an item with $1.00, so the winner of the auction will have to pay a higher price when the auction is won.
THE CONCLUSION?
The most significant streams of money coming IN seems to come from the affiliates themselves, in:
A. The compounder, their initial investment.
B. Purchasing retail and VIP bids themselves, where the main motive is to earn matching VIP points and 20% commission.
C. Membership fees and other fees.
The other possible streams of money coming IN seems to be too insignificant to be counted as “major streams of revenue”.
This is all very interesting to me – as I have just recently been introduced into the world of penny auctions and the “private profit sharing’ business model.
I’ve been able to learn a lot about Zeek from this message board – and am wondering what you guys know about Bids that give. I understand it’s basically the same thing but in a “newer” package and in pre launch state.
I am currently involved in another MLM but have been approached by other “leaders” in my company and in others about doing this as well. Thoughts?
Search is on the top of every page’s navigation menu on the right:
https://behindmlm.com/companies/bidsthatgive-review-charity-to-market-a-mlm-penny-auction/
Sorry my bad – in fact I had read that review first – and it was chalk full of info…but was confusing for someone just being introduced into this “new (to me) version of mlm”.
Now that I’ve read this thread, going back and reading the other again was helpful. Thanks.
Hey all,
In a really general context, I really believe the saying “if you’re making money, then someone else is losing money”. The money has to come from somewhere, unless more monies are created. However, then, the monies will have less value than before since there is no such thing as unlimited resources to back these monies.
So, let me begin by saying that Zeek does make money and is questionable at best right now in terms of legality. However, the ethics aspect of the company is rather appalling. What is worse is that members are also exercising that mentality like it’s a cure for the current epidemic financial turmoil.
To me, this “business opportunity” just feels like hosting animal fights; you profit from displaced misery. Personally, I cannot live with that on my conscious.
I have thoroughly read MOST of the posts with analysis and inference, and that is what I think of Zeek and many other companies that “require little investments to earn lucrative returns”.
And please, a naysayer would be like you overzealous idiots, clamoring and yapping about how successful you are and how unfortunate we are because we failed to recognize when an opportunity presents itself. Instead, all I see here are thorough, thoughtfully critical analysis that has occasional pitfalls; what argument is perfect?
So to those who replied intelligently:
Just dismiss those posts. They are either trolling or just waiting to be eliminated eventually from the human gene pool.
Yes, if Zeek’s business model were really so successful, then why doesn’t the government use it to get us out of this lousy economy?
They could put savings bonds up on a penny auction site, then have people invest, no scratch that, “buy bids” (wink, wink) and place a daily ad on a classified ad website, and then pay out 1.5% daily from all the auction revenue. We’d be in the black before we knew it.
What I find amazing is how so many people have allowed themselves to be blinded by greed so that they think that Zeek is just one big gravy train that’s going to last forever. I guess when you’re offering free money to people they’ll ignore where it comes from.
If I join, does this affect my work comp. I am not actually working. I am buying bids and placing and ad. I know that it is not an investment but work comp might look at it as an investment since I am buying the bids
s
Interesting question.
Call up social services (or whoever handles workers compensation in the US) and ask them, ‘if I pump $x into a company and get >$x back after 90 days, will this affect my workers comp?’
Of course you already know what the answer is going to be…
Hmmm, you’re not actually working but its not an investment. But you are placing an ad every day(or paying $10 a month for someone else to do it). So isn’t that work?
Otherwise you are getting a return on the bids you bought.
I enrolled last month because i have seen the checks for more tha $800 a week thant my friend is getting for her $1000 she invested last november….dont care what this guy said…money speaks for itself..
^^ Another cash cow sap joins the ranks, without stopping to think where the money comes from.
Investments and check flashing, oh my.
whatever you said Oz….dont care where the money are coming from..just get my tiny investment and get a VERY nice revenue…no bank give me this for having my money on a cd or savings…lol..
@test
Yes, you don’t care where the money comes from. You don’t care that it comes out of the pockets of other affiliates that may never see a dime. You’re ultimately getting paid by people who will get screwed.
At least you’re honest about not caring where the money comes from.
@test
Why don’t you invest in some other illegal enterprises? The mafia has many that you can invest in. It doesn’t matter how the revenue is being generated as long as you get paid, right?
No one put a gun to any of Bernie Madoff’s victims either. They all invested voluntarily.
What’s your point again?
Your first argument was “no one put a gun to your face” to coerce you to invest in Zeek, therefore, leave all the affiliates voluntarily investing alone.
Now you are saying “it could be a fraud or a crooked game, but don’t put all your eggs in one basket”.
Those are two different arguments. And they are irrelevant in any case, because:
– a Ponzi is a fraud
– a Ponzi is illegal
– an unregistered security is illegal
– people go to jail for this
– participants can be sued
It’s not like playing craps at the casino here.
Then why are you investing in Zeek? Do you understand what a ponzi is. This business will damage people directly. You’re just a big jack ass aren’t you? We’ll give you some grace, being that you’re new and all.
I think you will be one of the last ones to join and I also think you will not be able to recoup your money without recruiting quite a few people in a hurry and have them lose their money.
I just feel sorry for the people you lure into it. If they happen to be your friends and families, at least you will think twice before luring them again in a similar program or not be able to show your face to them.
Pity yourself if you lose quite a bit in this stupid ponzi before you are able to flash your check around. I just hope people you introduce it to will be able to see through this madness and not join you.
Oh this is just like a movie I saw, maybe you have two called BOILER ROOM. Every business in the world works the same way. The daily P&L relies on new customers buying product daily, just to stay in the red. Most real businesses take a loss every day or once a week, its the large payouts or spending sprees that bring you back to green.
Take that same philosophic out-look and apply it to this idea, without new recruits you have NO-NADA- ZIP-Zilch new money, once the cattle get it² there will be no new money.
The demographic this scheme applies to is the college educated spoon fed dreamer that has 800.00 to waste then expect 1Mil in a year, (is that me) I like to call this “the wine is ripe and ready approach”, I hope the company is there in a year, for your sake.
Here is the indicator of a scam when or before it happens, the rep of the scam has to read you a disclaimer then he gives you the schpeel on pennies, and postings and all the bullshit in between, then ends with one day I can make 500.00 a day.
If you start a real business let say a news paper stand, selling goods / product and 20 years later, your the owner and underwriter of major casinos and property development in New York and Las Vegas then you can look back and thank God that you were not a GRQuick type.
There are no free rides to the top, so buy your ticket wait your time in line, and one day you will be there in the front row. Invest in your self and become self supporting, I promise its way more fulfilling in the end.
I’m in ZR right now (started back in march with around 5k), until very recently (last few days) I hadn’t really done my due diligence pertaining to their compensation model (I trusted the person who sponsored me). I’m curious when you guys suspect ‘the bubble will burst’?
I’d like to retain a positive outlook on the whole idea of it, as if it’s really just a new business model that pays on individual efforts, but after my research I’ve noticed there are a couple similarities to a traditional long term ponzi’s (the one’s that aren’t there, are not there because technically they (ZR) are not a financial institution dealing with ‘investments’, ‘investment advisors’ etc..).
I mean, I have to agree that something that also concerns me which has been mentioned several times throughout different comments is the fact that we are paid by our marketing/advertising efforts (the posting of the ad(s)), NOT on the generation of new sales. Which is how traditional legit MLM’s operate.
Here’s where I see some legitimacy to “counter” the idea of: people who can/do just create fake accounts to sign up to receive the bids they need to distribute.
So let’s say for instance, I’m someone who knows how to “create these customers at will” at the end of the day, when I amass a point balance as large as 50,000 or more it’s going to be very difficult for me to continue creating these fake customers, when I could in actuality just take a % of my profits cashed out to put into legit marketing/advertising.
Some may be wondering: well, why would you do that when you already have a proven method for generating the customers to maximize your earnings?
Two reasons:
1) At the end of the day (assuming ZR is legit) we’re paid via profit sharing, so the more legit real customers I acquire for the company, the better the likelihood of them purchasing items through the penny auctions.
So to me, it seems beneficial to spend a % of my ACTUAL money (cashed-out) to invest into advertising that I know will work to deliver more qualified leads to the company, because then we all win.
2) Again assuming ZR is legit (which I hope it is). If I continue to pump fake customers into the system to distribute my bids, then it’s more than probable that their sales will decrease, which will also decrease the % of profit sharing.
So, perhaps people are doing this (submitting fake customers) in the short run because they’re not coming from a marketing background and they don’t know how to get the customers themselves, but in the long run it’s detrimental to everyone.
Any way, to date: I’ve amassed around 25k+ points..
I’m not sure really what to believe anymore, however I do find after doing all this research there are a lot of shady things.
I’d invite you viewers to look at these two threads as well to see what you think about what ZR might be trying to do aside from what they obviously state?
http://zeekrewardsnews.com/2012/06/zeebates-all-inclusives-updates/
(bottom of thread)
P.S. I realized i said “two” threads, but I can’t seem to find the 2nd one. Basically it mentioned something about Zeekler, or RVG, or ZR BUYing another company to acquire mor ecustomers and distributors? I’m not sure what the pivot on that would be..which is why I ask.
Anyway, if any of you guys can find that thread, I don’t see it anymore..
Thanks again.
@Kevin
How so?
I invest $x of my own money with Zeek Rewards on the expectation that I’ll receive a ROI after 90 days >$x. Automating my daily ad and sitting back to twiddle my thumbs for 90 days, how is that not an investment?
If you don’t invest any money into Zeek Rewards, how much money do you make?
$0.
If you publish ads to a closed Facebook page that nobody can see, you still earn a daily ROI.
When Zeek Rewards banned 6 countries a few months back, members were (allegedly) refunded their initial invested, they were not compensated for any advertising they had done for Zeekler. In some cases this was over a year of publishing a daily ad.
You tell me, what are you actually getting paid on?
Which is when you start buying fake customers that other people have created. They’re available for <$1 each from various sources… so why waste time creating your own fake customers when others have automated the process and are willing to sell them cheap?
(of course with this legitimacy goes out the window but I digress).
As for Zeebates, irrelevant until specifics are released and it actually launches. Something to think about though, why on Earth would ZR launch what is a blatant attempt to inject more actual retail non bid investment money into ZR if it currently wasn't a problem (in that all the revenue going into Zeek currently comes from affiliate investments in bids)?
@Oz
So if you take a gander at this website: girardgibbs.com/practice-areas/182/identify-ponzi-scheme/
you’ll see what I’m referring to when I say “(the one’s that aren’t there, are not there because technically they (ZR) are not a financial institution dealing with ‘investments’, ‘investment advisors’ etc.”
The one’s that are, are obviously:
*Promises of High, Consistent Returns
*Accounting Problems
“why on Earth would ZR launch what is a blatant attempt to inject more actual retail non bid investment money into ZR if it currently wasn’t a problem (in that all the revenue going into Zeek currently comes from affiliate investments in bids)?”
Your phrasing on this is a little hard to understand, but I suppose the answer would be to obviously generate more $ (there doesn’t have to be a problem to want to diversify products/services).
You’re basically asking: “Why would ZR want to sell more items outside of the bids themselves?”
I don’t know if that’s the point you were trying to get across? If not, please elucidate.
@Kevin — there are investments that insist they are NOT investments. That’s where “Howey Test” comes in, SEC vs. Howey, 1947 if I remember correctly.
If ZeekRewards passes the Howey test, then it doesn’t matter whether they say they are a financial institution or not. They are an investment.
@Kevin
Zeek Rewards alone claim they are not an investment scheme. Thus far a credit union and the NC AG office has publicly referred to investing in Zeek Rewards.
Mechanically business model wise they are obviously one, in that you put in $x and expect a >$x over 90 days.
More external non-affiliate $$, and that is key because it indicates there’s bugger all external money coming in currently.
Why would ZR introduce a shopping portal when they claim penny auctions are wildly profitable? Surely they’d focus on growing that side of the business rather than increasing their workload (considering all the other administrative/support problems they currently have)?
Oh my goodness I have laughed so so so hard between Jimmy and Oz I have no idea which one is worse. Holy cow. Thank you for the analysis.
I had been approached too and when I asked the question, what commodity/products do you sell and the response was none, then my response was, Good BYE. Honestly, folks are being scammed all over again and again.
In this case, it is pretty clear that it’s just a matter of time. Oh well, Jimmy, Oz and the rest of you.. thank you thank you thank you.. Amazing.. If I laugh one more time, I’ll have to have stiches.
@ K. Chang, and Oz
Thank you both for your insights. I’m going to look up the SEC vs. Howey case you referenced K.
I’ve decided that it may in fact be best to begin diversifying/cashing out given the high probability of ZR imploding. Thanks again.
-Kevin
so, if i am reading correctly, the people that said it isnt going to work, and knew about this last june….had they put in 10k, they would have taken out 50k?
im not sure but, why havnt you gotten in yet? what are you waiting for? duuuuuhhhhhh!!!!!
I haven’t gotten in because I know it’s a big Ponzi scheme which, if not on the verge of collapse, is now being investigated by the North Carolina AG’s office.
Let me see:
honesty, morals, ethics, illegality, lack of desire to profit off others’ naivete.
About 6 months ago I heard about Zeek Rewards and didn’t think anything of it. Reason being is I actually left the Network Marketing and MLM industry about 5 years ago simply because I was tired of these companies, the short-lived products, etc.
3 weeks ago, I received a call from a woman asking if I’d heard of ZR and I explained to her that I wasn’t interested. She continued to pitch me and I asked a few questions. The second my questions caused her to stumble, I immediately told her I wasn’t interested and we ended our call.
About 4 days ago I got another call from a very intelligent and sharp lady regarding ZR again. This time I listened to her, asked a couple of pretty in-depth questions, and she was able to answer them pretty good.
Long story short, she sent me a couple of emails and also did what she called a “screen share” with me to show me her ‘back office.’
When I saw and understood the Profit Share portion of the ‘comp plan’ I decided to join as a “Diamond” affiliate and begin with the max bid purchase of $10,000.
I told her I wanted to do more research before I made my final decision. We then ended our call on great terms and I got busy Googling.
Naturally I found this site and began to read some of the comments, which I found concerns that I had actually brought to her attention. Things like where does the profit that makes up the profit share come from? Does it come from the bid purchases of its own affiliates or is there really real customers? And how is ZR going to sustain paying as more and more affiliate come in?
I then decided to begin with $5,000 because I was beginning to get suspicious. So I told this woman who I decided to join that because of my mild apprehensions, I was going to cut the 10 grand in half.
I have decided NOT to join, which I will explain after I say this…
Truthfully, the comments on this website didn’t bother me one bit and are not responsible for my decision to not join. I have been in Network Marketing and MLM long enough to know that people will have opinions about any company no matter how squeaky clean it is.
So my reason for not joining stems from a video I saw on YouTube about an hour ago.
This video was of Troy Dooly interviewing Dawn, the COO of ZR.
I was doing fine until they discussed the 1099. She said that affiliates will receive a 1099 based on the dollar amount they have earned from the profit sharing and not based on the dollar amount in which they cash out.
I thought to myself…whoa, I didn’t even think of that. This would mean if I let my ‘point’ accrue to somewhere around 150,000 and had a profit share of about 1 percent daily, I would earn $1,500 each day from the profit share. And if I set my auto repurchase to 80/20, I would be cashing out $300 daily.
Well calculating this for a 30 day period, I would cash out at $9,000 but would have been reported to the IRS as earning $45,000.
Is Zeek Rewards outta of their minds?
Dooly basically says in the video that people were freaking out at receiving 1099s and I see why.
What type of raw deal is that.
So because of that I’ve decided not to join. And to think…Payza just received my money orders too. Now I have to request a check and hope Payza doesn’t all of a sudden stop sending checks to the US.
Hi,
I’ve read lots of the comments and have been pondering if it is or isn’t sustainable.
the people who say its a ponzi say if new affiliates stop signing up that they will end up paying out more than that is there.
i didnt get to read the whole thing, so im not sure if someone already addressed this… but dont they require you to give out 20pts per month?
so it seems there is real consumption happening, and they basically force you to have that spent.
since the 20pts is being spent there is real profits happening from the penny auctions?
does anyone care to give input on this matter and how that all plays into the sustainability?
LF – If yo speak to an accountant you will realize when you repurchase bids and give them away with the other 80 percent ,it is a business expense for running your business, is it not.
So your net gain for tax purposes will be 20 percent or th 9 k in your example. Any accountants out there confirm this?
IRS rules are very specific about this, You only owe taxes on money received, not on money earned but not yet received.
Dawn obviously doesn’t know about this most basic tenet of tax laws. Just ask any payroll manager. If they do this, it becomes an obvious case of tax evasion on their part. Do you know what the penalties are?
I’ve just spent two hours reading all of the pro’s and cons about ZR as I’m considering joining.
This tax question is the smoking gun . Maybe the gov’t is the silent partner reaping all the benefits LOL. My question of all of you supporters of ZR and antagonists of ZR, is she correct in her tax assumption?
This is illegal, out of compliance, and not allowed. Any affiliate reported for doing this would be terminated and have their VIP points confiscated. Even though this, and other violations are performed all the time, its pretty telling that the only way to sell the opportunity is ‘show proof’ of the Ponzi earnings.
You declare your daily repurchase as advertising expense. So if you kept it in at 100% and say you ‘earned’ 45000 VIP points, you would declare $45k profit and $50k expenses ($5k initial purchase + $45k bid repurchase).
The problem is you might get audited. There is always risk that expenses are disallowed during an audit.
There is the complex explanation that “Zeek is really an investment but instead of declaring capital gains based on the TMV of my VIP points, I have to report it as revenue and cost of sale because of the way Zeek declared it on the 1099”.
Advise that has been provided here is to take out some money before the end of the year to show a “healthy” expense to advertising ratio in order to lower your audit risk.
No, because this achieves multiple effects
1) They expect you to deduct all the bid purchases as expenses, thus severely reducing the amount of actual “income”. Whether this causes IRS to audit you is irrlevant to them.
2) This makes their income disclosure statements look much better than it actually does. About 5 times better, if everybody uses the 80/20 rule. In other words, if they said this guy made 1 million in a month, he actually only made 200K in actual cash.
3) It also matches the Ponzi model, which almost always includes a “reinvestment” / “rollover” and such clauses to slow down the money from leaving the system,but without being too obvious about it.
You will only get taxed on monies received not on VIP points. VIP points are worthless to the IRS.
@Russel
The points are dumped on dummy customers (email accounts whose owners don’t even know they’re being signed up, or just fake email addresses altogether). ZR do not verify customer email addresses or details prior to bids being given away to them.
@ obserber
So you’re saying, according to my previous scenario, I’d only have to pay taxes on the $9,000?
@ Jimmy and K. Chang
So you both are saying that the repurchase would be declared as an expense?
What happens then if I decide to keep the setting of 100% repurchase all the way until I filed my taxes?
@Paul
If you’re re-investing, you use your “monies received” to purchase more VIP points, whether you see the money or not is irrelevant. Of course you aren’t taxed on your points directly.
@ Jimmy
I have a question for you Jimmy. Reading through comments on behindmlm, I understand that you are currently a member of Zeek Rewards.
For the records, and because I can’t find a solid answer to this question, does ZR, as of today, require affiliate to get 2 customers and/or recruit 2 qualified affiliates to be able to cash out from the money made from the daily profit shares?
I know that you are required to place one ad per day, but just wanted to know if the above was included in that.
In other words, are you able to cash out each day beginning with the very first day you receive your first percent of the profit share by just placing your ad?
@ Oz
What exactly do you mean Oz?
@ Oz
I understand that you aren’t taxed on your points directly…but are you or aren’t you taxed on the “monies received” whether you cash them out or repurchase with 100 percent of them?
Or is it clear that you are only taxed on money that you cash out?
What exactly do you think you’re re-investing in new VIP bids with?
Whether you cash out or not, ZR pay you “monies” and you use those “monies” to re-invest in bids (or cash out).
Which of the two you choose doesn’t matter, Zeek Rewards technically pay the “monies” to you either way (at least on paper, regardless of whether they have the funds or not).
See above, we’re on the same page.
@ Oz
So you’re saying that because the “monies” were paid, the total amount of the “monies,” by tax time, is what I’ll pay taxes on?
You are taxed on every thing you earned regardless of whether you decide to withdraw it to an eWallet, or reinvest it by buying more bids.
This includes daily profit share on your VIP point balance, 10% and % commission on all bid purchases from your level 2 and level 1, 20% commissions on retail customer purchases, and matrix commissions.
All these earnings fall into a big bucket of “cash available”.
From this big bucket, you can withdraw the money, or buy more bids. Or do nothing, and leave it sitting around in the “cash available” bucket.
The act of buying more bids is mostly automatic, but there is an interim step where Zeek puts money in your back office as “cash available” before buying bids on your behalf. This automation causes some confusion as people think it’s all just points.
One way to clarify thinking on this is to assume that you have to reinvest all bids manually. In other words, set your % repurchase to 0%, and therefore all earnings always go to cash available with no automated repurchase. Now you have to manually purchase more bids.
This clearly shows the separation of earnings and repurchase expenses.
It’s what ZR put on your 1099 so yes.
Whether or not you can claim a deduction on all this money (which, if you had 100% re-investment would look highly suspicious I’m sure you can agree), is yet to be established.
I don’t think any US based ZR affiliates have received tax returns yet or received audit notices.
I spoke with a guy who tells me otherwise. He says that you would pay taxes on what you cash out with only and not the amount you re-invested.
What you guys are saying sounds more like the likely scenario as I was thinking. I say that because they IRS isn’t one to give breaks or leniency on money earned or even received. They want their cut, no question asked.
I was just thinking that I could just keep track of what was reinvested as well as what was cashed out, and when I went to do my taxes, state it that way on a scheduled c…But I guess that’s out of the question.
Zeek Rewards send a 1099 to the IRS with all your “monies earned”, regardless of whether you cashed out or not.
When the above is true, what “a guy” said doesn’t matter.
Of course there’s nothing stopping you filing a return only claiming your cashed out money, but it’s going to differ from what ZR put in your 1099. All the more chance you’ll invite an audit on yourself (which is a good thing for everybody else as it’d clarify things from a tax perspective).
This is my honest opinion about ANY network marketing or mlm company…
I truly think they are designed so most people fail. If everyone was highly successful in these nw and mlm companies they wouldn’t be able to sustain paying everyone and stay in business.
And usually a “good” company expects you to buy water filters, dietary supplements, trace minerals, beverages, lotions, etc at wholesale and sale at retail (which is like a few dollars over wholesale), not to mention maintain your monthly subscription and do personal and group volumes in order to be paid or even advance to an “executive level.”
All the while knowing dang well 99 percent of distributors, affiliates, and representatives won’t made the grade.
By the time you jump ship, they’ve collected hundreds and sometimes thousands of dollars from you. I believe this is what 99 percent of mlm and network marketing companies want and how they thrive.
I told a woman I spoke with that ZR will not make it to the summer of 2013 and she liked to cuss me out.
Dang this home-based business industry…I’m going to start a YouTube or Facebook site…
See ya’ll there…LOL
@ Oz
Trust me, I hear ya.
Yes, what Oz said above.
While one could argue that what you actually cash out is a more appropriate way to account for your earnings, the practical reality is that the 1099 that Zeek sends the IRS is what you have to work with.
Also, technically speaking, declaring income on only what you cash out is incorrect by itself. You would also have to declare gains based on the true market value of your VIP points. Otherwise this would be the ultimate tax vehicle to defer income (assuming it was safe for future years, and you could reliably convert VIP points to cash without being diluted).
Now, one could argue that the true market value of the VIP points is really an investment, therefore should be treated as capital gains (only paying taxes when you cash out, not based on TMV at end of year), then that would make Zeek an investment, which they adamantly claim they are not.
Definition of ‘Constructive Receipt’:
Read more: http://www.investopedia.com/terms/c/constructive-receipt.asp#ixzz23HxNJmwp
Although the law says that you only owe taxes on money received, this point is totally moot right now. What matters is what ZR puts in the 1099s. Whatever it is is what you will owe taxes on. Everything is computerized on the IRS side and doesn’t involve human assessment.
The law states that you will have to pay taxes owed until a dispute is resolved with the IRS, or you may face interest and penalties. This can take years. As soon as I saw this, I immediately understood the real purpose of ZR doing this.
Whatever amount is put in the 1099s is what ZR can legally deduct as expenses. In other words, ZR wants to transfer their tax liabilities onto the members. YOU pay their taxes for THEM.
Of course you can dispute with the Tax Court, just see how much your legal expenses will be and how many years it takes to resolve. In the meantime, you still have to pay the taxes assessed.
Nobody will find out what happens until the 1099s are sent out probably in Jan-Feb 2013.
I don’t think that’s true. Most people will pay no taxes, just increase their audit risk, because they will have more expenses (bid purchases) than revenue.
We have 1099’s from 2011 already. The issue of audit risk, however, may be unknown for some time as I’ve had audits on other MLM businesses occur several years after I filed.
The problem of audit risk will be the greatest in the 2nd (or 3rd year). IRS don’t like to see someone filing returns that says their expenses are so great that they aren’t making profit, even though there’s plenty of income, though they do give one year grace period.
Let me try this. The first year of a busn. start up usually loses money. Any one who signs up half way through this year and did not take any cash out will get a 1099 for the total of there “points/bids”, so if they let it ride and acumulate 50,000 bids, 50,000 will show up on line 7 of there 1099.
They will right off the whole amount, plus any costs like membership fee, advertising fees and any other deductions they dare to. They will or should get a print out of every bid they gave away and the dollar amount, ( 50,000 ) that was hard to explain to an accountant.
Say I pulled 7,000 out that was paid as commisions in 2011 , I was expecting a 1099 for 7,000, what I get is a 1099 with 48,000 odd dollars, all the points/bids in my balance, what they call ” Constructive reciepts” so I pay on the 7000, write off membership, bids given away ( 1.00 each ) and put all that on my schedule C.
By the definition of consructive reciepts I believe the only thing on the 1099 should be cash I recieved and my cash available amount if there is one. The point/bid balance is NOT “CASH” that is available. That is the balance of the repurchase of bids with the money I make daily.
EXAMPLE – My point balance is 10,000 points, in one day I make 1.5 of that balance, 150.00, my repurchase is set at 80/20, 120.00 BUYS more bids, 30.00 goes into my cash available. I spent the 120.00 on bids, I PURCHASED bids with that money I made, I spent it, then gave the bids away, thats MY expense not theres, Right ?
How does that amount show up on MY 1099 ?
Zeek gives you a “Earnings and Expenditures Report”. The top line says:
That top line is what is reported to the IRS. Zeek then breaks down your earnings into categories:
Then for expenses, Zeek tells you:
Then there’s a report of every sample bid you’ve given away. Some people’s 1099 report from Zeek number in the hundreds of pages because it details every sample bid you had given away.
As I’ve been saying since the beginning of the tax issues, it’s quite simple:
– Everything you earned => income
– Everything you repurchased => expenses
How you classify the expenses and whether the IRS sees such a high ratio of expenses-to-income as a red flag for audit is a separate issue.
Zeek realizes the tax issues are somewhat vague, so they provide the breakdown and let the affiliate deal with how they are going to file.
On the call with Howard Kaplan, there was no clear guidance given. If Howard Kaplan doesn’t know after having insider access to Zeek and hosting the call, good luck with your CPA knowing “the right way to file”.
@ Jimmy
Your explanation what exactly what I was looking for someone to explain.
So with your explanation said…
According to your 1099 from Zeek rewards and after dealing with your CPA, you “should” end up paying taxes based on the amount you actually cashed out correct?
And like you I listened to a recording of Howard Kaplan talking out of the side of his neck (talking and saying absolutely nothing at the same time).
To me it looks like something that you and your CPA will have to work out together based on your 1099 from Zeek.
That isn’t so bad to me.
@ Mr. Wallace
Constructive Receipt is easy to understand because it basically keeps folks who have the funds in some sort of account, that they have complete access to, from not paying taxes just because they haven’t spent the money yet.
With Zeek it’s a little different from my understanding because the points aren’t money that can be drawn from. The available cash is what affiliates can use to cash out or repurchase bids.
I understand that EVERYTHING is reported, however, I think with a good explanation and a good CPA, preferably one who has serviced folks in the MLM industry, this can be explained properly on the schedule C.
Just my thoughts.
@ Jimmy
Jimmy can you explain the process of giving away bids to customers and how you obtain customers in the first place.
Thanks in advance.
I’ve signed up as a free affiliate and am considering going in strong with a Diamond membership, but I’m concerned that I can’t contact anyone at ZR. Their live chat doesn’t work, tickets are not responded to, and when I call it hangs up after about a minute.
I have a question about sponsoring. I wanted to sponsor my dad but we live in the same household. Does the stacking rule still apply even if I buy thousands of bids myself?
If he cannot sign up under me directly, can my brother (who is in another household) sign up under me and then my dad sign up under my brother?
Instead of just guessing, another way to solve the problem is to get an advance IRS private ruling.
If anything, you’ll have a better defense if audited, and very possibly avoid any penalty since you did your best to follow the rules.
Anyone know how to get out of ZR? I can’t seem to get a response from anyone in Zeek to my recent issues.
I am fed up and want out. Any consequences I should be concerned with? Many tries with email and phone calls just seem to be dropped after listening to the script.
I did a spread sheet on this type of payout and found after about 170 days the 90 day falloff started to reverse course. In other words, they take your initial investment off the front end after reaching 90 days since thats how everyone starts.
If you x the amount coming in verses what you have to minus the numbers are not matching. There would need to be large bonus addition unless my calculations are wrong. Open to suggestion. By the way, if I have to wait for Korea to pay me forget that…
X .012 $5,000.00 Points Bonus minus x.012 9554
60 5060 60 114.6 9609
60.72 5120 60.72 115.3 9664
61.44 5181 61.44 115.96 9719
62.17 5243 62.17 116.62 9773
62.92 5306 62.92 117.28 9827
63.67 5369 63.67 117.93 9881
64.44 5433 64.44 118.58 9935
65.2 5498 65.2 119.22 9989
65.98 5564 65.98 119.87 10043
66.77 5630 66.77 120.51 10097
67.57 5697 67.57 121.16 10151
68.38 5765 68.38 121.81 10204
69.18 5834 69.18 122.45 10257
70 5904 70 123.09 10310
70.84 5975 70.84 123.72 10363
71.7 6046 71.7 124.35 10416
72.56 6118 72.56 124.99 10468
73.42 6191 73.42 125.62 10520
74.29 6265 74.29 126.24 10572
75.18 6340 75.18 126.86 10624
76.08 6416 76.08 127.48 10675
76.99 6493 76.99 128.1 10726
77.92 6571 77.92 128.71 10777
78.85 6649 78.85 129.32 10827
79.8 6728 79.8 129.93 10877
80.75 6809 80.75 130.53 10927
81.7 6891 81.7 131.12 10976
82.69 6974 82.69 131.72 11025
83.68 7058 83.68 132.3 11074
84.7 7143 84.7 132.88 11122
85.71 7229 85.71 133.47 11170
86.74 7316 86.74 134.04 11217
87.79 7404 87.79 134.61 11264
88.85 7493 88.85 135.17 11310
89.91 7583 89.91 135.72 11356
90.99 7674 90.99 136.27 11401
92.09 7766 92.09 136.82 11446
93.19 7859 93.19 137.35 11490
94.31 7953 94.31 137.88 11534
95.44 8048 95.44 138.4 11577
96.58 8144 96.58 138.92 11619
97.73 8242 97.73 139.42 11660
98.9 8341 98.9 139.93 11701
101 8441 101 140.41 11740
101.29 8542 101.29 140.88 11780
102.52 8645 102.52 141.36 11818
103.74 8749 103.74 141.82 11856
104.98 8854 104.98 142.27 11893
106.25 8960 106.25 142.72 11929
107.52 9068 107.52 143.15 11965
108.81 9177 108.81 143.58 12000
110.12 9287 110.12 144 12034
111.45 9398 111.45 144.41 12067
112.78 9511 112.78 144.8 12099
114.13 9625 114.13 145.19 12130
115.5 9741 115.5 145.56 12160
116.89 9858 116.89 145.92 12189
118.29 9976 118.29 146.27 12217
119.72 10096 119.72 146.6 12244
121.15 10217 121.15 146.93 12270
122.61 10340 122.61 147.24 12295
124.08 10464 124.08 147.54 12318
125.57 10590 125.57 147.82 12340
127.07 10717 127.07 148.08 12361
128.6 10846 128.6 148.33 12380
130.15 10976 130.15 148.57 12398
131.71 11108 131.71 148.78 12415
133.29 11241 133.29 148.98 12431
134.9 11376 134.9 149.17 12445
136.51 11513 136.51 149.34 12458
138.15 11651 138.15 149.49 12469
139.81 11791 139.81 149.63 12479
141.49 11933 141.49 149.74 12487
143.19 12076 143.19 149.84 12493
144.91 12221 144.91 149.92 12498
146.65 12368 146.65 149.98 12501
148.41 12516 148.41 150.02 12503
150.2 12666 150.2 150.03 12503
151.99 12818 151.99 150.03 12501
153.82 12972 153.82 150.01 12497
155.66 13128 155.66 149.96 12491
157.54 13286 157.54 149.9 12483
159.43 13445 159.43 149.8 12473
161.35 13606 161.35 149.68 12461
163.28 13769 163.28 149.54 12447
165.23 13934 165.23 149.37 12431
167.21 14101 167.21 149.17 12413
169.21 14270 169.21 148.95 12393
171.24 14441 171.24 148.71 12370
-5000 113.29 9554
I would just like to say Zeekrewards has done, so far, everything I was told they would do.
I have more than enough Bid Customers (PRC)to distribute my daily earnings to. Why should anybody have a problem with doing the same.
Also, The bids I give away are bids to sample (lesser) auctions. This is marketing, leading people to the real auctions for which they need to buy real “VIP Bids” at $.65 a piece.
When you see how many bids are placed in any one auction, it becomes apparent Zeekler is making money.
Purchased VIP Bids entitle our customer to participate in the “real” (or big) auctions; cars, large screen TV’s, IPODS, IPADS, Vacations, etc……
What we do as affiliates is entice people to pay real $ for VIP bids, by offering them free “sample” bids with which to “play” with. Please: Am I missing something ?
In the end, Zeekler must be able to survive (to a large extent) on the sales of VIP Bids for their “real” (large) auctions.
This success is the “key” to the business model as I understand it. Arguing whether all the “sample” bids are given away on a particular day is completely meaningless, and misses the point entirely.
(Ozedit: removed spam)
Your daily earnings? I thought you distributed bids to PRC’s.
In anycase, whether or not you have enough is not the point, the point is you as an affiliate are buying the bids, not your customers (retail revenue).
This is the part that’s largely not happening, resulting in mostly affiliate money being paid out to affiliates as commissions.
Except that each of these bid purchases attracts a >100% liability through Zeek Rewards on the price paid for each bid. This happens via the 20% commissions paid out and the expected >100% ROI against the money paid for the bid paid out to affiliates over 90 days.
Whether Zeek Rewards generates money or not is irrelevant, it’s where this money comes from. If it’s mostly from affiliates, when you consider the investment mechanics of the RPP and the daily ROI paid out, this equates to affiliates paying affiliates in a Ponzi scheme.
Only enough genuine retail customers to offset the affiliate money being used to pay out commissions.
@James Wyrick:
How many actual customers do you have who are buying bids from you on a regular basis? And I’m not talking about the fake accounts with names like Charlie2938, Ruth947, Bob382, Betty6854, etc.
What nobody ever seems to be able to say is how much external money is being pumped into Zeek Rewards compared to money pumped into it by affiliates. From all appearances, affiliate money vastly outnumbers any income from actual retail customers.
Also, why is it every time I visit Zeekler, I never see the auctions for cars, large screen TV’s, iPods, iPads, vacations, etc? All I ever see is flea market junk.
My good friend is trying to get me in on this game yesterday after reading all the specifics, I really am holding to my cash now.
He said the intial joining fee is $130 and you get it back as $200 right away?, and then there is the $99.00 a month fee? this seams a little steep?
nothing makes since. I have known this buddy of mine for somtime. I get the feeling this little zeekler thing is going belly up soon, the way everyone is talking about it.
I also had a friend tell me about this, however, he was telling me that if you put 10k in that in 6 months, you be making 280 a day return. I just think he was misinformed, because he is a great guy.
I just hope he didn’t put 10k in now.
regards
Kelly
they closed yesterday due to investigation. all sites re down and locks changed on doors.
Yupp! Zeek is down… Sad day for those making good money!
I feel sorry for my co-worker who invest about 8k in that “business” hoping leave his part-time job. I was about to join his team.
We who joined Zeek were NOT promised ANYTHING. We are taking a chance on something and its our money. We will be fine!
Its over…..
http://www.sec.gov/news/press/2012/2012-160.htm
I hope the government will refund our investing funds lolz. But likely it’s hopeless and nightmare to all. I am so sorry for those brand new investors that didn’t make any money yet and zeek is shuting down.
Unfortunately, zeek turns the riches to be funny giving out miles and makes the poor like me to be more broke.
So basically all penny auctions with matrix’s are ponzi schemes.
Omg wtf is wrong with zeek rewards??? We have been with them for along time and we always got our money and everything was honky dorey but no its just gone???
Hopefully you didn’t dismiss “the critics” as being “negative” and “fanning the flames” and were able to make some strategic decisions for yourself and cash out.
Everything substantive that the critics have been saying has been proven correct. EVERYTHING.
Remember the old saying: “If it sounds to good to be true it probably is?” Well…..
Its all over. Some people made some great money – it was a ponzi. I went in knowing that and I took the risk. Goodbye Zeek
Troy apologized on the air to Richard Schroeder (who wasn’t present) in Friday night’s ACES radio show, but you’d think he should have a public mea culpa.
Of course, Richard Schroeder was saying the same things all “the critics” were saying, he just happened to have “industry creds” that “the critics” did not.
But facts & analysis stand on their own merits, yet again.
Well, not matter what happens now, I has been a supergreat 2 1/2 months. Gave us a reason to get up and do something.
I am just sorry I assisted in almost a dozen others to join Zeek. They were alive with a new beginning and purpose…a dream.. a reason to look ahead. That is the only sad part…
The money, oh well it can be replaced and we will talk about this for a long long time. Coscot was great, Amway a little better, as was Herbalife and a host of others, but nothing compares with the excitement of ZEEK.
Hope you are able to come back with something else…
100% Ponzi Scheme and those that say otherwise are liars.
If you take in money from new investors to pay off old investors than simply ask Bernie Madolf if that’s worked out well for his investors….
biggest regret was that i didnt get in sooner. lotsa cash to be made out there shearing sheep….lmfao
Serious??? C’mon people penny auctions are a scam in itself then they try to pull an mlm out of it… lol to all those suckers 🙂 btw with all that money they should have hired a logo designer… what crap ha ha
So what do y’all think of Zeek Rewards now?
HAHAHAH
Suck it all those ppl saying how real this was.
idiots.