wakeupnow-logoDespite the retail offering of third-party products and services, WakeUpNow had to force affiliates to focus on retail sales by introducing mandatory retail subscription quotas late last year.

This was done due to the evident complete lack of retail focus within the company.

As per WakeUpNow’s July 2013 Income Disclosure Statement, 80% of the company’s affiliates failed to generate a $10 or more commission payout that month. With $10 being the minimum commission payable on a single retail subscription, that means 80% of the company’s affiliates failed to make one retail subscription sale (or earn a commission of an existing one) for the month of July.

Things haven’t gotten much better since, with WakeUpNow’s December 2013 statement revealing that 82% of the company’s commission qualified affiliates failed to earn any commissions at all.

Even more revealing, is that according to the statement, it appears there’s only one affiliate in each of the top 5 affiliate membership categories (monthly averages and high and lows are the same).

These five affiliates walked away with a combined $1.9 million dollars in commissions. How much of those payouts was derived from retail activity within the company is not disclosed.

Filed on December 31st 2013 but only published last month, WakeUpNow’s Annual Disclosure Statement reveals that the above has translated into a net-loss of $4.5 million dollars for 2013.

Coming off the back of a $3.3 million dollar loss in 2012, WakeUpNow’s combined operational loss over the past two years is $7.8 million dollars.

Their response?

Though the Company’s current financial condition may cast doubt on its ability to continue as a going concern, management believes that its plan of operation, if successfully implemented, will generate sufficient earnings to both restore a stable financial condition and provide adequate returns to its shareholders.

Uh, seriously?

Well alright. Let’s give WakeUpNow corporate the benefit of the doubt for a moment. What have you got up your sleeves gentlemen?

Management’s plan of operation is based on three primary objectives:

(1) further development of its products with specific emphasis on its affiliate network,

(2) continued domestic growth of its distributor base, and

(3) expansion into international markets.

So introduce more third-party offers and deals, recruit more affiliates and enter into new (non-saturated) markets?

Oh dear. More of the same, different result? Yeah…

I don’t mean to be the party-pooper, but isn’t that what you guys have been doing for the past two years? Take a look at the Alexa traffic estimates over 2012 and 2013 below:


If anything, an increase in affiliate activity has only resulted in bigger losses for the company.

Underscoring this is the focus on retail activity within the company, the mention of which appears once in WakeUpNow’s 2013 Disclosure Statement:

Vision Statement

WakeUpNow is attempting to build a significant direct selling distribution network consisting of participants , while personally consuming our increasing number of portfolio products, focus on profiting from the sale of our products to millions of consumers and preferred customers who are not a part of our distributor compensation plan.

Now contrast that to the repeated emphasis on attracting distributors (recruitment), as the key to WakeUpNow’s success going forward:

Management believes that its efforts to develop a robust product offering with a compelling value proposition will continue to attract distributors both in the United States and abroad.

By simultaneously growing the Company’s distributor base while adequately containing its fixed costs, management expects to have positive growth in earnings.

Management believes that its efforts to develop a robust product offering with a compelling value proposition will continue to attract distributors both in the United States and abroad.

By simultaneously growing the Company’s distributor base while adequately containing its fixed costs, management expects
to have positive growth in earnings that will in turn create value for current and prospective shareholders.

We primarily distribute our products through our direct selling distributors and we depend on them to generate almost all of our revenue.

We experience high turnover among distributors from year to year. As a result, in order to maintain sales and increase sales in the future, we need to continue to retain existing distributors and recruit additional distributors.

To increase our revenue, we must increase the number of and/or the productivity of our distributors.

We rely primarily upon our distributor leaders to recruit, train, and motivate new distributors.

Our operating results could be harmed if we and our distributor leaders do not generate sufficient interest in our business to retain existing distributors and attract new distributors.

The “vision” WakeUpNow present clearly doesn’t reflect their reality.

Eye-brow raising to sat the least, WakeUpNow are quite candid about their reliance on distributor recruitment, citing it as a primary “risk” for the company:

Laws and regulations may prohibit or severely restrict our direct sales efforts and cause our revenue and profitability to decline, and regulators could adopt new regulations that harm our business.

A number of government agencies regulate direct sales practices. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, often referred to as “pyramid” schemes, that compensate participants for recruiting additional participants irrespective of product sales, use high pressure recruiting methods and/or do not involve legitimate products.

The laws and regulations in our current markets often:

  • impose order cancellations, product returns, inventory buy-backs and cooling-off rights for consumers and distributors;
  • require us or our distributors to register with government agencies;
  • impose caps on the amount of commissions we can pay; and/or
  • require us to ensure that distributors are not being compensated based upon the recruitment of new distributors

If we are unable to continue business in existing markets or commence operations in new markets because of these laws, our revenue and profitability may decline.

So if your affiliate’s cant continue to earn recruitment commissions due to pesky regulatory laws, you’re toast?

That’s not exactly confidence inspiring.

Call me cynical, but I’m predicting WakeUpNow is going to walk away from 2014 incurring even bigger losses than in 2013. You don’t reverse losses from a recruitment orientated business by trying to recruit more distributors in different markets, you do it by generating actual retail sales to retail customers.

If the Company is unsuccessful in these efforts and does not attain sufficient sales to permit profitable operations or if it cannot obtain sufficient additional financing, it may be required to substantially curtail or terminate its operations.

Now a bit of optimism never hurt anybody much but uh… might be time “wake up” and think about calling it a day guys.