ominto-logoAfter 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.

dubli-network-alexa-traffic-ominto-may-2015

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?