Vicesus Review: Revenue share overshadows retail
There no publicly accessible information on the Vicesus website indicating who owns or runs the company.
Infact, there’s not a whole lot you can do on the company’s website, with Vicesus restricting public visitors and those perhaps hoping to conduct some due diligence restricted from doing anything but log on.
And if you don’t already have a Vicesus affiliate account? Too bad, that’s as far as your Vicesus website experience goes.
Clicking on a Vicesus affiliate’s referral link isn’t much better, with the company only displaying a brief welcome message to visitors and still refusing to share any additional information unless visitors sign up.
The Vicesus website domain (“vicesus.com, registered on the 4th of August 2012) is a little more revealing, naming “HOF Group LLC” as the registrant based out New York in the US and a “Mads Frederiksen” as the admin contact.
I wasn’t able to find any further information on HOF Group LLC (an entity bearing the same name does exist in Ohio but appears to be unrelated (food)), however a Google search reveals Vicesus affiliate’s naming Mad Frederiksen as the “CCDO” (no idea what that stands for) of the company.
In what appears to be copy and pasted information Vicesus only provide to members, affiliates also name Sulaiman Abrahams as Vicesus’ CEO and Jesper Madsen as CFO. Kevin Grimes is also being named as Vicesus’ “legal advisor”.
I wasn’t able to find any further information on Abrahams (his Vicesus company bio refers to him as a “south African entrepreneur”) within the MLM industry, so I can only assume this is his first MLM venture on the executive side of things.
Read on for a full review of the Vicesus MLM business opportunity.
The Vicesus Product Line
Like all MLM penny auctions, Vicesus’ flagship product are bids to their penny auction website, “BidWithMe”.
BidWithMe is not currently live (“bidwith.me”), however the Vicesus compensation plan reveals that BidWithMe bids are 60 cents each and sold in packages.
There are six bid packages in total, ranging in price from $30 to $360:
- Bid Package 1 – 50 bids for $30
- Bid Package 2 – 100 bids for $60
- Bid Package 3 – 150 bids for $90
- Bid Package 5 – 300 bids for $180
- Bid Package 6 – 600 bids for $360
Note that a “Bid Package 4” is listed in the Vicesus compensation plan material I cited, however the price point and bids given are identical to “Bid Package 3” so I’ve omitted it from the list above.
The Vicesus Compensation Plan
The Vicesus compensation plan primarily revolves around the sale and purchase of BidWithMe bid packages by the company’s affiliates.
Active Customers Commission Qualification
As an affiliate with Vicesus in order to qualify for commissions you must have two active customers at all times. New affiliates are given a grace period of 60 days to find 2 new active customers, and 30 days per calendar year thereafter.
A Vicesus active customer is defined as a non-affiliate customer who purchases a Bid Package. After purchasing the bid package an Active Customer remains active and counts towards an affiliate’s commission qualification for thirty days.
Personal and Group Volume
Personal Volume (PV) and Group Volume (GV) are points generated upon the sale or purchase of BidWithMe bid packages at a rate of $1 to 1 volume point.
- Bid Package 1 = 30 points
- Bid Package 2 = 60 points
- Bid Package 3 = 90 points
- Bid Package 5 = 180 points
- Bid Package 6 = 360 points
Personal Volume is generated when an affiliate spends their own money to purchase bids or any of their customers do.
Group Volume is generated when an affiliate’s downline (recruited affiliates) purchase bids or any of their customers do.
Vicesus Membership Ranks
There are seven membership ranks within the Vicesus compensation plan, and along with their respective qualifying criteria are as follows:
- Affiliate – entry level membership, pay $10 monthly fee, have 2 active customers and generate 30 PV a month
- Executive – recruit 2 affiliates, have 5 active customers and generate 60 PV and 90 GV a month
- Senior Executive – recruit 3 affiliates, have 7 active customers and generate 100 PV and 120 GV a month
- Silver Executive – recruit 3 Senior Executives, have 10 active customers and generate 150 PV and 500 GV a month
- Gold Executive – recruit 3 Silver Executives, have 15 active customers and generate 300 PV and 1500 GV a month
- Diamond Executive – recruit 3 Gold Executives and 2 Silver Executives, have 20 active customers and generate 500 PV and 3000 GV a month
- Platinum Executive – recruit 3 Diamond Executives and 2 Gold Executives, have 30 active customers and generate 600 PV and 12,000 GV a month
Note that the recruited affiliate requirements are active totals in your downline at the time of promotion and are not cumulative.
When a customer purchases a BidWithMe bid package, Vicesus pay out a 10% retail commission to the affiliate who generated the sale.
3% is also paid out the affiliates immediate upline and 2% to their upline.
Penny Auction Retail Bonus
When a retail customer (I believe affiliate won auctions are excluded) wins a penny auction, up to 30% of the final closing price of the auction is paid out via a Penny Auction Retail Bonus.
The Penny Auction Retail Bonus is paid out incrementally to a maximum of 30%, depending on how many active customers a Vicesus affiliate has:
- 2-5 active customers = 6%
- 6-9 active customers = 12%
- 10-15 active customers = 18%
- 16 to 20 active customers = 21%
- 21 to 25 active customers = 27%
- 26 to 30 active customers = 30%
Weekly Bonus Pool
The Vicesus Weekly Bonus Pool is made up of ‘35% of the weekly turnover from bid packages purchased by affiliates and customers‘.
As the name suggests, the pool is paid out weekly with points being generated when purchased bids are used in the BidWithMe penny auction.
Upon their generation, volume points pay out a weekly share of the Weekly Bonus Pool for up to 90 days, at which point they expire.
Weekly Unilevel Commissions
The Vicesus Weekly Unilevel Commissions are made up of ‘20% of the weekly turnover from bid packages purchased by affiliates and customers’ and is paid out using a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of the structure with every personally recruited affiliate placed directly under them (level 1). If any of these level 1 affiliates recruit new affiliates of their own, they are then placed on level 2 of the original affiliates structure and so on and so forth.
Using this unilevel structure, Vicesus pay out affiliates based on their generated PV (including recruited affiliate’s customer bid purchases) down 8 levels of recruitment.
The Weekly Unilevel Commissions are made as a percentage of the PV generated by each affiliate, with how much of a percentage paid out relative to a Vicesus affiliate’s membership rank:
- Affiliate – 5% on level 1
- Executive – 5% on level 1 and 3% on level 2
- Senior Executive – 5% on level 1 and 3% on levels 2 and 3
- Silver Executive – 5% on level 1, 3% on levels 2 and 3 and 2% on level 4
- Gold Executive – 5% on level 1, 3% on levels 2 and 3 and 2% on levels 4 to 6
- Diamond Executive – 5% on level 1, 3% on levels 2 and 3 and 2% on levels 4 to 7
- Platinum Executive – 5% on level 1, 3% on levels 2 and 3, 2% on levels 4 to 7 and 1% on level 8
Weekly Matrix Commissions
Vicesus Weekly Matrix Commissions are paid out using a 2×20 matrix.
A 2×20 matrix places an affiliate at the top of the matrix with two legs branching out under them (level 1). In turn, these two positions branch out into another 2 positions each (level 2) and so on and so forth down 20 levels.
Each position is filled by a recruited affiliate (either directly or indirectly via an affiliate’s up and downline), with commissions being paid upon the sale on bids by affiliates in the matrix.
When an affiliate in a matrix makes a bid sale (or purchases bids themselves), 10% of the money paid goes into matrix commissions and is paid up 20 levels within the matrix.
Eg. If an affiliate on level 5 of a matrix buys Bid Package 4 for $60, 10% of $60 ($6) is paid 20 levels in the matrix above them. Note that not every affiliate on the level is paid, only those affiliates who are directly linked to the affiliate who generated the volume.
Also note that if an affiliate falls on a level less than 20, than upon reaching the affiliate at the top of the matrix the commission continue to pay out to their upline (remember, every affiliate is a downline of their upline and is placed in their matrices, right up to the first affiliate who signed up).
Membership to Vicesus is an initial $79 and then $10 per month thereafter.
It goes without saying that the biggest challenge the MLM penny auction niche faces today is the generation of retail revenue vs. affiliate revenue, with the importance of retail revenue only compounded upon implementation of a revenue share style compensation plan.
With Vicesus using a revenue share style compensation plan, I find no valid explanation for the company including affiliate-sourced revenue in the key commission components of their compensation plan.
The Weekly Unilevel, Bonus Pool and Matrix commissions all contain affiliate funded revenue and mathematically is where the majority of commissions to Vicesus affiliates are going to be paid out.
There are genuine appearing attempts to reward and encourage affiliates to sell packages to retail customers, indeed one cannot even earn commissions without having two active customers at any given time – but these seem largely overshadowed by the inclusion of affiliate revenue in core payouts within the compensation plan.
To their credit, Vicesus to state in their compensation plan that affiliates are to ‘work towards maintaining a volume where 60% is purchased by customers and 40% by affiliates throughout your organisation‘, however how this to be enforced (if at all) or whether this is just a general guideline is not clarified.
In anycase, if Vicesus were serious about relying primarily on retail revenue via the penny auction to sustain the business, why not just scrap affiliate funded points from the compensation plan altogether?
If an affiliate wants to participate in the BidWithMe penny auctions out of a genuine interest in the auctions and not to simply generate volume for commission purposes, let them.
With the use of retail customer bought bids being the only source of point generation for the weekly revenue share and payouts, matrix commissions (retail customer funded GV) and unilevel commissions (each affiliates own PV, based on the use of retail customer bought bids).
Of course whilst this option is a step up from the current Vicesus compensation plan, it’s also not without its own problems. Primarily of course the setting up of dummy customer accounts by affiliates, which they then use to funnel their own money through to generate revenue to be paid out via the weekly bonus pool.
The weekly bonus pool of course being the real culprit here.
Because of the following scenario:
I can join Vicesus as an affiliate, pay my joining fee and then $10 a month. Then using my family or friend’s personal details set up just two dummy customer accounts and pump as much money as I wish to “invest” into Vicesus through these accounts (buying bids and spamming the auctions to generate points in the weekly bonus pool).
With my points expiring every 90 days I’ve got a good incentive to build my point balance over any given 90 day rolling period by reinvesting my weekly bonus pool payouts through my dummy customer accounts.
Now obviously all this works on the presumption that Vicesus will generate enough revenue over 90 days to pay me out >100% of the money I put in through my dummy customer accounts.
How do they do that?
Well, I market the Vicesus MLM opportunity to other
investors potential affiliates, publicly on the “retail revenue is important to us” spiel, but unofficially on the participation scenario outlined above.
They in turn go out and recruit new investors and with everyone in Vicesus doing this, we end up once again with yet another MLM penny auction Ponzi scheme mess.
Recruit enough investors and create enough points in the weekly bonus pool to cover the minimum $30 to qualify a customer account as active, and it might even be worth setting up enough dummy accounts to qualify yourself for the other customer required aspects of the compensation plan too (higher membership ranks require more active customers which unlocks more levels of the unilevel commissions paid out).
Sure, there’s a bunch of other stuff in the compensation plan that’s nice if one could be bothered to participate in Vicesus with a genuine retail customer orientated focus, but history has shown time and time again that when a revenue share compensation plan is paired with a MLM penny auction that this is not the case.
Keep in mind that I’m not accusing Vicesus or its affiliates of anything at this stage (the company is still in prelaunch), but am merely stating what I believe are fundamental legitimacy problems in their compensation plan. Primarily driven of course by the wholly possible scenario I’ve outlined above.
A scenario that we’ve seen time and time again materialise whenever a revenue sharing business model is paired with a MLM penny auction.