Ominto: Dubli drops disastrous branding?
After lying dormant in the MLM sector following the flop of their penny auction model some years ago, Dubli exploded back on the scene mid last year.
Seemingly out of nowhere, I remember being bombarded with requests to review “the new Dubli”, as well as there being a healthy discussion around the opportunity at the time.
Unfortunately upon closer inspection, what we found was a recruitment-driven orgy taking place.
Spearheaded by affiliate leaders who were paid large amounts of money to join, Dubli affiliates paid up to $12,000 and earned commissions when they recruited new affiliates who did the same.
Alas this turned out to be short-lived. Once Dubli’s leaders had made hundreds of thousands of dollars off of the recruitment that took place between August and October, Dubli changed their compensation plan and pulled the ladder up after them.
What came next was a binary-based business model which, as I understand it, tanked.
Just how badly did Dubli’s bait and switch fail?
For more information we turn to Troy Dooly @ MLM Helpdesk:
In late 2014 a former VP in the U.S. Dustin Mitchell, filed and received a restraining owner (sic, supposed to read “order”) against the founder of Dubli and the courts ordered the founder to pay medical and legal expenses.
And in late 2014, the buzz on the street was that one of the large Wall Street firms was going to invest hundreds of millions in the company.
A rumor I questions since such events have to be filed with the SEC and should never be part of a buzz campaign.
I wondered if this was not some form of stock manipulation, and questioned it with top reps, financial advisors and my own personal legal advisors.
In April 2015, the whole DubLi Board of Directors (Except the Founder) resigned leaving many to speculate what was happening.
In addition to all of that, affiliate promotion of Dubli is pretty much dead in the water.
I have no idea what the terms were of the contracts Dubli had their paid leaders sign, but it would appear some of them might have been time-sensitive (ie. You promote us for 6 months or so and then can go off and do whatever).
So with throwing large amounts of money and artificial momentum failing, this is now where we’re at.
In a surprising move, which caused the DubLi pundits to praise and critics to scratch their heads, DubLi hired the former Chief Networking Officer (my term) Jerry Yerke from Lyoness America to head up not just North America but Asia (January 2015).
Yesterday DubLi released the following Press Release announcing a completely new DubLi Board of Directors naming men who seem to have impressive backgrounds to oversee the the (sic) growth and expansion of the company.
Oh and their getting rid of the tainted Dubli brand, with the company now wishing to be known as Ominto (someone over at Dubli a fan of Marvel superhero movies?).
New name, new executive staff, new Board of Directors… new business?
Doesn’t seem like it.
A visit to the Ominto website states the company is still running on the ‘save by shopping with cashback, deals and more‘ platform.
I will not however that a statement from Dubli CEO Michael Hansen, might suggest other plans are the works:
The DubLi name has long been synonymous with Cashback Shopping around the world.
The Ominto name is reflective of our growth strategy and indicative of a company involved in a greater breadth of business opportunities.
Whether that means a greater breadth within ecommerce or something else is unclear.
Also unclear is whether or not the Ominto name-change will be accompanied with a compensation plan change (we’ll obviously have an Ominto review up if that happens).
My thoughts?
The MLM cashback model has failed to take off in the US, largely I suspect because the dubious compensation plans that accompany the models wouldn’t pass US regulatory investigation (Lyoness and their AU investment and Dubli with its now defunct recruitment model are prominent examples).
Cashback in general might thrive, but as of yet nobody has been able to make an MLM commissions model stick.
Primarily the problem lies in first of all these companies not actually having anything to sell other than affiliate membership (or units of investment as is the case with Lyoness).
The attraction to shoppers is that they can join for free, leaving merchants and affiliates footing the commission bills. Merchants can’t be charged too much or they won’t participate, so that leaves affiliates bearing the brunt of costs (membership fees in Dubli and AU investment in Lyoness).
And that’s pretty much where we’re at with the whole e-commerce MLM niche in the US.
I’ll leave you with some thoughts from Dooly, pertaining specifically to Ominto going forward;
What I hope we will see with this current move is a founder who realizes it’s time to grow up and stop trying to control every aspect of his business, and place it in the hands of a competent team who can solidify the business model and marketing channel for all involved.
Your thoughts?
this is such a cool way to do recruitment ponzis.
when about to crash, change the board, change the name and relaunch!
how is this any different from the neighbourhood ponzis that keep crashing and resurrecting themselves every few months?
just because dubli is a pinksheet company and registered with FINRA, does that ‘sanction’ such ponzi resurrections?
once again dubli has managed to get some ‘apparently’ high brow individuals on its board. these guys have :
so, these new directors have ‘intimate knowledge’ of dubli’s recruitment based scheme, but have joined anyway?
hansen, CEO says:
i think they will add more third party products and services, and make it a confusing mess, where no one can clearly say how much money is coming from where. they will change ‘appearances’ and nothing much else.
If you have done your homework, you would notice that Dubli is not planning on replacing the Dubli name with Ominto.
Dubli just filed for the Nasdaq last week and is planning on creating a business beyond just the Network Marketing portion.
You gotta admit that the business idea by itself, without the Network Marketing, is brilliant, and is sustainable as a traditional business.
Your graph above shows the decline in traffic, most likely from the decline of MLMers who hyped up the program sooo much last year.
I don’t work for Dubli, nor am I a MLMer, but I notice that the amount of Dubli customers grew more in the last 3 months of 2014, than it did in all of the 12 months previous, resulting in helping create over $15 million in customer subscriptions.
One of my businesses just sold for nearly $100,000,000, and we were bringing is less than $20Million per year. I would say Dubli/Ominto is on the right track as a traditional, long term business, and that is why I have bought a lot of stock in the company recently.
I am a savvy businessman, who sees Dubli doing the right things to grow a worldwide business, with or without the Network side. I just think it is lucky for those who chose to market Dubli that Dubli allows people an option to act like affiliates and get paid to do so.
Right. Guess you missed the press-release they put out the other day then…
…sit down son.
Then why was it propped up with heavy recruitment commissions, which when taken away saw the business to flop?
Right, and how many of those were affiliate signups who won’t even be around after 12 months?
Hell we’re only 9 months into the original recruitment drive and things are already looking grim.
Duh, of course I read the press release. Again, Dubli Inc name is changing to Ominto, which makes strategic sense to grow worldwide with other products and offerings (not part of the MLM portion), but that doesn’t mean that Dubli.com will now be called Ominto.com (that’s what I mean by “replacing”).
Dubli Cashback can easily fall under the Ominto company umbrella at this point. And, as far as affiliate sign ups, I know several people that paid for a VIP customer position in Dubli and are NOT associated with the business side of it, and they are quite happy.
And, they are telling other people about it. The business concept is solid. Why do you think companies like Ebates.com are starting to grow so well?
It hardly had ANY external customers, so that growth doesn’t exactly tell us much.
The VIP memberships were also sold to the affiliates, so most of those customers were probably the affiliates themselves.
From Dubli’s 10-K/A:
Most of that revenue seems to come from the affiliates themselves.
From Dubli’s 10-Q (4th Quarter 2014):
The front side of the business has never generated any significant income. The recruitment side has always been the primary part of the business.
You will need to show it, e.g. you will need to show that you have interpreted Dubli correctly. There has probably been hundreds of “savvy business people”, “great leaders”, “professional internet marketers” and other similar types of people posting comments here.
One way to show it is to show that you have identified a reliable source and have interpreted that source correctly (so you won’t need to refer to yourself as the ONLY source).
@Bubs
Then why is there a message about cashback on omnito.com? Are you suggesting Dubli will run two ecommerce platforms?
Cool, but that’s not what I asked. You and I both know the majority of Dubli “shoppers” are just affiliates, who signed up hoping to get rich recruiting other affiliates.
In a year they won’t be around anymore.
Yet after almost a year, Dubli has failed to take off, the entire executive board resigned and leaders have all but stopped promoting it.
Comparing free cashback options to MLM opportunities with attached fees is a waste of time.
On May 11th Michael Hansen stepped down as CEO. He’s still basically running things (he’s the majority shareholder in the company), but two new plebs are going to be the fallguys going forward.
Based on info in the Dubli press-release, both seem to be nobodies in the MLM industry.
ir.dublicorp.com/releasedetail.cfm?ReleaseID=912434
It’s a press release. I would normally have ignored it.