Coastal Vacations Review: $11,000 travel discounts?
There is no information on the Coastal Vacations website indicating who owns or runs the business. The “who we are” section of the Coastal Vacations website only offers up the following vague marketing copy:
Coastal Vacations is an association of entrepreneurs, professionals and home-based business owners.
Over eight years ago a Board of Directors committed themselves to researching and building business relationships with travel companies that possess a proven track record of customer satisfaction and industry credibility.
The Coastal Vacations website domain (“coastaltravelpackage.com”) was registered on in July 2002, listing a “COA Network” as the domain owner. A suite address in the US state of New Jersey is also provided.
The name “COA Network” does not appear anywhere on the Coastal Vacations website, however the company does have its own website domain over at “coanetwork.com”.
On the COA Network website the company advises
COA Network was established in 1992 as the leading provider of voicemail services to businesses and individuals throughout North America. Starting with the vision of CEO and Founder, Paul Champaneria.
At the bottom of the Coastal Vacations website, a message informs visitors that the site is ‘Powered by FocalPoint’.
FocalPoint (“focalpointsystem.com”) is a “replicated site and automated marketing system”, created and owned by COA Network.
Given this it is unclear whether or not COA Network actually own Coastal Vacations or whether they’ve just set up the website (and in doing so listed themselves as the owner of the company’s website domain).
As always, if an MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money.
The Coastal Vacations Product Line
Coastal Vacations is NOT a seller of Travel and therefore is not licensed to sell travel. Coastal sells Travel and Travel Related Discount Packages that provide discounted access to many travel and travel related companies.
Despite appearing to operate in the travel MLM niche, as per the above warning, which is taken from the Coastal Vacations website, the company only markets discounts to third-party products and services.
As such, Coastal Vacations itself has no retailable products or services, with affiliates only being able to market access to discounts offered by third-party companies.
Coastal Vacations charge between $1295 to $11,000 for access to these discounts (plus $25 shipping fee).
The Coastal Vacations Compensation Plan
Coastal Vacations do not provide details of their compensation plan on their website (nor do they make any mention of a business opportunity). As such the following has been pieced together from various marketing campaigns run by the company’s affiliates.
The Coastal Vacations compensation plan is a 2-up style plan, requiring affiliates to pass up two sales to their upline before they can earn commissions.
There are three levels within the Coastal Vacations compensation plan, corresponding to the three “product” levels the company offers:
- Level 1 – $1295
- Level 2 – $3500
- Level 3 – $7500
Note that these packages can be bought in a group offering, either Premier for $3995 (level 1 and 2) or Platinum (all three levels) for $11,000.
Each of these three levels operates independently of eachother commissions wise, however buying in at a higher level automatically qualifies you to participate at a lower level.
Note that two passups are still required at the highest level an affiliate has bought in at to qualify them to earn on lower levels sales (no passups required if an affiliate is higher level qualified).
The commissions offered at each level are
- Level 1 – $1000
- Premier – $3200
- Platinum – $9705
Note that I was unable to find commission payouts on levels 2 and 3 individually, only as a package purchase.
After an affiliate has purchased their own Package, the next two membership sales they make are then passed up to the affiliate who recruited them. After these first two passups, an affiliate then keeps the commission generated from each sale they make.
Residual commissions are generated via an affiliate’s personally recruited downline, who in turn must pass up their first two sales at each level to the affiliate who recruited them.
This holds true irrespective of how many new affiliates a Coastal Vacations affiliate personally recruits into the business, each must pass up those first two sales.
Joining Coastal Vacations
The costs of affiliate membership to Coastal Vacations depends on what level an affiliate buys in at. This pegs affiliate membership between $1295 and $11,000.
Note that an ongoing $89 annual fee is charged to maintain level 1 membership (required if an affiliate wishes to continue to receive level 1 commissions beyond their first year).
There are an abundance of red flags evident in the Coastal Vacations MLM business opportunity, the first of which is the company’s so-called “product”.
In MLM business opportunities the sale of discounts, coupons or vouchers does not qualify as a legitimate product. A discount of any kind in and of itself is not a tangible product or service, it is what it is – a discount on some other product or service.
By Coastal Vacation’s own admission on their website, the company itself has no retailable product or service.
This brings us to red flag number 2, a lack of retail revenue being generated within the company. Every level purchase (or Premier or Platinum purchase) includes affiliate membership via access to the business opportunity.
As such there’s no option for retail sales within the Coastal Vacations business opportunity.
No retail means affiliates are getting paid on recruitment, which would define Coastal Vacations as a pyramid scheme (no recruitment = no commissions).
As for the buy in levels, analysis of the commission ratio of the price paid for the memberships reveals a gross price inflation across all levels.
- Level 1 ($1295) – commission is $1000 or 77% of the amount paid
- Premier ($3995) – commission is $3200 or 80% of the amount paid
- Platinum ($11,000) – commission is $9705 or 88% of the amount paid
At all levels, over 75% of the amount paid by new participants is paid directly to affiliate who recruited them.
Arguing any value in the discounts access is provided to in this sense is problematic as, clearly without the commission percentages attached to the price, the question of whether or not people would still pay the prices Coastal Vacations charge is raised.
A minor red flags exist in the affiliate marketing campaigns I saw, which went to great lengths to reassure potential affiliates that Coastal Vacations was not an MLM business opportunity.
With commissions generated by an immediate downline, and then down a possible additional two levels of recruitment (via passups) and commissions rolled up to an upline, how Coastal Vacations is anything but an MLM business opportunity is a mystery.
Why Coastal Vacations affiliates are insisting the MLM business opportunity is not an MLM business opportunity is not clear.
All in all it’s hard not to look at Coastal Vacations as an $11,000 buy-in money game. You pay your $11,000 (or less if you wish to test the waters first), and then set about recruiting others to generate your commissions.
They do the same, you get pass-ups and off you go. Once the recruitment of new affiliates at the bottom of the recruitment-chain dies off however, commissions grind to a halt.
Due to the annual nature of the fees however, (lifetime at the upper tiers), participants have already made their contribution to the scheme and simply lose out.
Some value can no doubt be derived from the access to third-party discounts and services provided with Coastal Vacations affiliate membership, but it’s important to note that these are entirely external to the Coastal Vacations MLM business opportunity.
By virtue of the 25% or less portion of the fees charged going towards providing access to said discounts, it is clearly qualification to recruit new affiliates into the scheme to earn commissions on that is what is being paid for here.