WakeUpNow formally terminate US MLM operations
The manner in which WakeUpNow’s demise in the US has been handled has been nothing short of spectacularly incompetent.
We first got a whiff something was up when top affiliates in the company began uploading YouTube videos and issuing statements about the company closing.
That was on the 10th of February.
Prior to those announcements and since then, right up until a few days ago, WakeUpNow corporate maintained radio silence on the issue. Well, on anything really.
There wasn’t a peep to be heard from WakeUpNow’s own website, nor their usually frequently updated social media profiles.
It was only on February 16th and WakeUpNow corporate finally came out of their shell, via a blog post from CEO Phil Polich.
Between Polich’s post and top affiliates announcing the end of the company, we covered a lawsuit filed by WakeUpNow against former CEO Kirby Cochran.
In it, WakeUpNow ignore the pitfalls of their own business model and attempt to peg all of the blame for the company’s demise on Cochran’s conduct.
Polich’s post serves to reinforce that viewpoint:
By taking advantage of the office of Chief Executive Officer, Kirby Cochran had made decisions that put the company on an irreparable negative trajectory; and sadly, he went to great lengths to keep many of these decisions secret from the rest of the management team and board of directors.
As we made progress, we continued to discover that Kirby Cochran’s deceptive actions had put the company in a position from which it could not recover.
In the end, his decisions for a privileged few outweighed the incredible heart and dedication of the many.
In their lawsuit, WakeUpNow are asking for some $70 million dollars in damages. Cochran meanwhile filed for bankruptcy earlier this month, leaving a question mark over WakeUpNow’s lawsuit moving forward.
In any event, my stance remains the same since news of the lawsuit broke.
If the allegations WakeUpNow are making against Cochran are true, in whole or part, then there’s no doubt said actions contributed to the collapse of the company.
But whatever measurable impact Cochran might have had, it surely dwarfs in comparison to WakeUpNow’s fundamentally flawed compensation plan.
When the core of your business model is “the more our affiliates sell to recruited affiliates, the more money we lose”, and when affiliates recruiting new affiliates generates by far the largest amount of sales activity in your company – any way you cut it you’re stuffed.
Trying to blame that on Kirby Cochran, short of acknowledging he was the CEO of an already-doomed ship and did nothing to prevent the inevitable collapse, is a poor attempt at scapegoating at best.
When I stepped in as CEO in September I did so with an additional personal investment, and every intention of righting the ship. As I worked with a group of outside financial analysts it became clear that the issues ran deeper than originally expected.
Together with Jason, we worked diligently for the last 120 days doing everything we possibly could to turn it around. We explored every option, turned over every rock, and connected with every contact we had.
Whatever Polich and Jason Elrod attempted to do over the past 120 days, it is clear they avoided doing the one thing that might have turned WakeUpNow around.
That being a complete restructuring of the compensation plan to favour retail sales instead of affiliate recruitment.
Of course that’s much easier said than done when none of your top-earning affiliates are focused on retail. WakeUpNow has fostered a culture of affiliate recruitment for as long as I can remember.
Much easier to claim you tried and then blame everything on Kirby Cochran blowing through a few hundred thousand dollars.
Ironically, the decision Polich and Elrod did finally arrive at saw them finally get rid of the MLM side of the business, which was what was causing them to blow through millions of dollars every year.
A rough deal for WakeUpNow’s affiliates who collectively are owed hundreds of thousands, if not millions of dollars in commissions. They would have no doubt much preferred to have seen a reworking of the compensation plan, even if many might not have embraced a retail-centric model.
For whatever reason though, Polich and Elrod instead have chosen to abandon them.
Effective immediately, WakeUpNow will cease all network marketing operations in the United States.
We will continue to sell our products, including Awaken Thunder and the WUN Fit line of products.
Is what little retail activity that was taking place within the company going to see it through? I doubt it.
And what of WakeUpNow’s activities in the rest of the world. Quite succinctly, they’ve singled out the US to cease operating in.
The US is of course the country in which the company owes the most amount of money to its affiliates, but how on Earth are they going to continue to push a flawed business model in other markets?
Alexa estimates of the traffic visiting the WakeUpNow website domain, 43.4% originates from Brazil.
One would certainly hope Elrod and Polich’s plan does not involve ongoing milking recruitment activity in Brazil to its inevitable collapse, simply to pay off their debts in the US.
With Elrod and Polich both based in the US, it’s unlikely they care about Brazilian regulations regarding recruitment-driven pyramid schemes in which little to no retail activity take place.
Ditto Peru (6%), Canada (2.8%) and Spain (2.6%), who along with the US (29.7%) round out the other top countries visiting the WakeUpNow website.
It goes without saying that our hearts are heavy over this decision. It wasn’t taken lightly, and it wasn’t done without understanding the impact on the lives of so many people that worked with us.
Our hope is that your life is better for having been a part of the #WUNLife. We hope you move on to what is next and be better because of the experiences you have had with WakeUpNow.
We hope you will remember the company for the way we changed the entire network marketing industry.
Sincerely,
Philip J. Polich
WakeUpNow will most certainly be remembered Phillip, but not for changing the MLM industry for the better.
sorry sir, pay the reps first. who wants your best wishes, you will need them more !
so, orchestrate a semi shutdown, blame a scapegoat, and say a tearful farewell to affiliates, and Go Home Free?
polich says;
now polich is an MLM guy. when he talks of ‘fulfilling all financial obligations’, i would like him to say it clearly and succinctly . what’s this crap about ‘vendors’ and creditors’?
say it clearly polich : ‘we will fulfill all financial obligations to our reps, to whom we owe commissions’. don’t be wordsmithing with ‘vendors’ and ‘creditors’.
i hope WUN didn’t pay for troy dooly’s ‘managing the troops’ video, from affiliate money. that would be like, the biggest insult of all.
Reading between the lines, Polich would appear to be talking about funds owed to businesses WakeUpNow were doing business with through the course of their business operations.
Like the company’s affiliates, it seems they too were not paid.
Polich isn’t interested in paying WakeUpNow’s affiliates, but he does seem concerned the companies WakeUpNow did business with should be paid. To that end that’s what continuing the scheme outside of the US and continuing to retail the products as a corporate entity are about.
That and recouping some of Polich’s investment into WakeUpNow.
They can declare bankruptcy and lose it all (there’s nothing much left to pay anyone with), or chug this along and milk it for what it’s worth.
Step one of that was getting rid of their largest creditors, WakeUpNow affiliates in the US.
I don’t know the legalities of how things went down, but top WakeUpNow affiliates just walking away from hundreds of thousands of dollars owed sounds incredible suss.
1] affiliate commissions also fall under ‘creditors’. so, this means, the company is unilaterally deciding WHICH creditors they want to pay, in their OWN business interests, and letting dooly loose on the rest of their creditor affiliates, with his: ‘hey, we’ll get through this together’ snakespeech? unless the affiliates are dead, they should take this up.
2] i’m not getting this. how can a company just unhitch its wagon from one aspect of it’s business, without first addressing the liabilities of that business? they should have to file for bankruptcy, at least for the MLM side of the business. that liability cannot be written off by sad farewells, it’s on paper, its audited, it’s real.
3] i think, maybe the top most affiliates, have been settled privately. the lower rung troops will not really unite to fight for their smaller commissions, unless top affiliates throw their weight behind them.
Hi everyone, it’s sad that this happen to a Network Marketing Company and for the Profession.
Lot of people left the company i am part of to go to Wakeupnow only thinking of the quick money and they all started to talk bad about our Company.
The truth is that when you join a Network Company only thinking about the income, this can happen very fast as just happen to WUN.
A company must keep the financial side Right and people must understand that if they are saying that you can make money fast and all that, down the line the company will have financial problems. The Leaders new all the issues and kept telling people to keep build the business.
For those who were with WUN, i wish you guys a wise decision next time before you join a company, look at the background of the company, the training, if the comp plan is safe for both sides so you and your team can make some money also the company can create an income in order to pay all those who achieve Residual income.
Now if you are looking to join a Company that has the same products, the same Comp Plan and the same Training, that can lead you to another unsuccessful achievement again.
Sad? Suiting perhaps but not SAD?
Whats sad is the fact that you lump this crap in with the direct sales profession and dont know the difference.
Can you explain to me how the compensation plan was flawed? The link you put up is an outdated compensation plan…
For an affiliate to be paid their $600 monthly, they need to have sold and kept active 12 platinum packages.
(Ozedit: Flawed arguments and denials removed.)
@Rick
Nobody except recruited affiliates were purchasing packages. The comp plan, despite minor changes, is for all intents and purposes the same.
You were part of a product-based pyramid scheme that hemorrhaged funds because affiliate purchases were liabilities due to a poorly though out compensation plan.
The more affiliates recruited into WUN, the greater the losses.
Quit coming up with bullshit explanations and own your part in the scam.
Platinum packages had some products or services, and some “other benefits” (e.g. the right to earn commissions based on the introduction of other members).
The last compensation plan I looked at had these elements:
* Monthly cost $100 (Platinum membership)
* Introduce 3 members → $100 in commission per month
* Introduce 3+9 members → $600 commission per month
I don’t remember the rest of the compensation plan, but the Platinum members were clearly rewarded for the introduction and maintainance of other Platinum members, a recruitment based commission rather than a sales based commission.
It was reflected in the December 2013 IDS (Income Disclosure Statement). I don’t remember the details for that one either, but I did actually analyse it (in early 2014). It wasn’t possible to identify any retail commission.
Sales based commission, e.g. 20% sales commission on the Platinum packages (internal sales), would have been reflected in
* some members earning $20
* some members earning $40
* some members earning $60, etc.
Retail sales based commission (external and internal sales) would have been reflected in much more variations in the income. You would at least have found SOME members earning SOMETHING from retail sales to external consumers.
It’s funny. If the business was actually profitable, they would just restart it under new management and keep selling products. If there really was a market of buyers, these people would keep buying and giving the company more money. The fact that they’ve instead shut the whole thing down tells you everything you need to know about the situation.
In other words, never mind the writing on the wall, keep recruiting!