Network Marketing VT cash gifting scheme collapses
I first looked at Network Marketing VT back in January 2011 and it wasn’t hard to identify a major red flag with the offering of 100% commissions coming out of membership fees.
Members would sign up to Network Marketing VT, gift 100% of their monthly membership fee to their upline and in order to earn commissions themselves, would have to recruit new members of their own.
A bunch of marketing material and private label rights resellable ebooks were included with monthly membership but with commissions coming out of monthly membership fees, were entirely irrelevant to the MLM business opportunity side of things.
Not surprisingly, it appears the root cause of Network Marketing VT’s collapse lies in commission payment problems.
Network Marketing VT CEO and Founder Jason Spurlock (photo right) wrote the following Facebook update just over a week ago now announcing the collapse:
Network Marketing VT, as it is now, is closing for business.
I want to express my sincere thanks and gratitude to everyone who helped make the company and this journey what it has been been. The journey was certainly worth it.
However, we live in a world where perception does not always match reality and in the network marketing industry trust and confidence have tremendous worth; especially in the age of social media.
The software and programming issues we have experienced since re-launching the comp plan in September 2012 have left many affiliates with the opportunity to express negative emotions in the social networking space based on wrongful assumptions that they were never paid fairly.
This company has not processed one credit card payment since the first week of December 2012. And it’s important to understand that NMVT has been through 2 full audits in the past, we have hired programmers direct from First Data, our consultants have been the most respected in the industry, and our staff has always maintained the highest integrity.
The goal, vision, mission, and purpose of Network Marketing VT continues forever. It truly is our life’s most expressive and dutiful work.
The message will simply evolve into a bigger, more robust, trustworthy, and valuable brand in the near future. You will always have an open invitation to join us.
The training schedule, including the webinars and the Wake Up To Success calls are being put on hold for the time being.
As most of you know, I really do enjoy hosting the Wake Up call; however, this is a very difficult time for me personally and hosting the Wake Up call is very hard to muster up the courage for — when I feel I would be better served through quite contemplation and meditation at this time.
Pretty soon, I will be back on the line and I hope you’ll continue to invest your time on the morning call too. The Wake Up call is one of the purposes of my life…so after a week or two of rest, we’ll resume the schedule.
I love you. I care for you. I believe in you. And I’m sorry. If there has been anything that left you feeling offended, it was never intentional and I pray you’ll forgive me.
More than anything else, I hope you’ll call me your friend and will keep me and my family in your thoughts and prayers.
I promise to keep in you touch and keep you updated. You please do the same.
Pulling the old “it’s our affiliate’s fault we have to close down” routine, evidently it’s clear that missed commission payments began plaguing the company late last year.
From what I’ve been able to gather sometime in the fourth quarter of 2012 Network Marketing lost their merchant accounts and were then unable to process credit cards. Naturally this resulted in a boatload of problems, which when combined with a shonky compensation plan that required the gifting of membership fees between members, resulted in ongoing delayed commission payments.
Some ex-members of the company are even claiming to have not been paid anything since mid-2012, with Spurlock directing affiliates who dared to contact him in regards to their missing commissions to “contact his attorney”.
Looking at the bigger picture it’s easy to see that, like all 100% commission paying cash gifting schemes, Network Marketing was doomed from the start.
The simple fact of the matter is once members at the bottom are unable to find new members to gift them, they stop paying their monthly membership fees and in effect stop gifting payments to their uplines.
Once their upline stop receiving monthly gifting amounts they too stop paying their monthly fees and in a pyramid scheme like manner from the ground up the company collapses.
Reading between the lines with payments missed here there and everywhere and affiliates not getting paid, it’s quite obvious money flow issues are what brought Network Marketing VT down.
You can blame your affiliates for the mess you’ve created when your cash gifting scheme starts to go belly up, however that doesn’t change the fact that they wouldn’t be complaining if they were getting paid.
Why aren’t they getting paid? Well, with a 100% commission scheme that’s not entirely clear. Logically money is just gifted from one member to another so there shouldn’t have been any problems.
Not unless the company itself was taking their cut out of said membership fees and perpetually relying on a constant flux of new members paying fees to cover their ongoing cut of the scheme.
Meanwhile Spurlock’s declaration that ‘the message will simply evolve into a bigger, more robust, trustworthy, and valuable brand’ does have me raising an eyebrow. Guess we’ll just have to wait and see if anything comes of it.