Vitel and Shopping Sherlock merge. Products?
Having reviewed both Shopping Sherlock and Vitel, one of the common traits amongst both businesses is the lack of products both companies provide.
Shopping Sherlock had an app that provides discounts to third-party products and services, and Vitel up until recently exclusively offered third-party products and services through its network.
A few months ago Vitel introduced what they call the ViSocial, a $69.95 a month “social marketing platform” that doesn’t appear to have generated any significant interest.
That said, at least it was a solid attempt at finally offering an actual product within the company itself, as opposed to other company’s product and services.
Shopping Sherlock on the other hand continue to lead with their free app that provides access to third-party offers.
With that in mind, I can wholly see the commonality between the two companies that would be ideal for a merge. And that’s exactly what Shopping Sherlock and Vitel have done.
I read about the news over at MLM Helpdesk this morning and, apart from making the official merger announcement, the press release also revealed some interesting insight into the businesses.
Perhaps not so surprising given the nature of the business, was mention from Vitel’s CEO Scott Rogers that
It has always been our goal to provide the best possible opportunity for the Vitel Wireless independent business owners and their families and we have realized that the Vitel executive team had taken Vitel as far as it could.
In order to secure the future growth of the business owners and their families we had to make a tough decision to step back in order to let them grow.
Reading between the lines, Rogers is pretty much admitting that the Vitel as an MLM opportunity had become stagnant. I suspect this would be primarily due to the lacklustre adoption of their social network, which was launched on the belief it was reinvigorate the business.
As per the press release, it appears Shopping Sherlock have absorbed Vitel, however whether or not Vitel will cease to exist as an independent company was not clarified. Shopping Sherlock CEO Michael Wiedder’s comment about the company ‘adding (Vitel’s) product mix to our vendor relationships’ certainly seems to indicate it won’t.
From an analysis viewpoint, it has to be noted that Shopping Sherlock itself is the re-imagining of an already failed MLM concept, MyShoppingGenie.
MyShoppingGenie tried the free discount app model for years before eventually collapsing. Shopping Sherlock seems to be making a better go of it however even with the introduction of a mobile app version of the tool, the core problems of MyShoppingGenie remain.
As I see it this merge will probably generate a bit of new interest in both companies however it doesn’t really address the core problems of either. Shopping Sherlock is still probably going to remain a company full of affiliates with little to no end-users of the app and Vitel’s social network is unlikely to take off just because it’s now offered under the Shopping Sherlock umbrella.
Furthermore the addition of Vitel’s vendor partnerships to Shopping Sherlock is unlikely to boost usage of the app, as indicated by the lack of overall interest in and growth of the Vitel opportunity by Scott Rogers comments above.
My prediction is that we’re just putting off the inevitable but we’ll still watch how this partnership plays out. As the grandaddy of the discount deal app concept, Shopping Sherlock collapsing would be the second confirmation that the model doesn’t work.
Something that all the app-based MLM companies that have recently popped up might want to take note of.
Update 4th September 2013 – Looks like Vitel as a standalone company is no more. As of sometime in the past week the Vitel website has been taken down with the domain “vitelwireless.com” asking visitors to visit Shopping Sherlock instead.
My thanks to the BehindMLM reader who sent in the heads up.
Seems that Mr. Rogers pretty much sold his entire genealogy of Vitel to ShoppingSherlock for an undisclosed sum.
Clearly, it’s the downlines being sold like pieces on a board. And they are lead to believe this is a GOOD thing for them.
There are other “apps” on the market that have way more backbone, more features & benefits and better deal’s on more products than this one. To base a companies future on this one tiny piece of technology is silly.
To compete in the e-commerece market you need a full suite of technologies. any one of them alone will not have any staying power.
This has already been done by a company that has a strong backbone and the highest amount of credibility in the industry. With that level of engagement also comes buying power which allows them to actually have a reasonable margin to pay comissions from.
Shopping sherlock is just bassed on affiliate programs with very little margin. They do not have direct from manufacturer pricing OR direct relationships with the retailers like the originators do.
INNOVATION in the marketplace is where champions are born, not IMITATION. I dont get why people would want to settle for some poor imitation of the real deal especially when the credit towards commissions is so miniscule.
All these MLM’s try to release mobile apps for shopping. People don’t shop on their mobile. They may research, but generally most people buy from their PC or tablet, and when using the tablet (if you consider that mobile device) they are using the site’s web page and not an app.
There’s been hundreds of “buy through our affiliate network get a % of our affiliate fee rebated to you” sites and BehindMLM has covered a few of the MLM versions of it. Until a network can produce actual value behind the standard CJ/Shareasale/Linkshare affiliate model, I see red flags any time any program starts advertising shopping revenue/discounts.
@Jimmy
You are right, it will never happen from CJ, Shareasale, Linkshare junk. There is NO margin to speak of and no direct relationships with retailers or manufacturers.
But it HAS been done the right way and with viable, respected components of commerce and DIRECT relationships. They have been doing it for years, and so well that all these companies are trying to come up with cheap, moneygame imitations of it.
In fact they have the highest success rate (over 40 times industry averages), 70% retention (over 20+ years), the most $ volume in sales to customers per distributor, the most per capita income earners, 22 years in business with 88 consecutive quarters of growth (never a down quarter), over $5B in sales, over $3B paid out in commissions, same corporate team since day one, massive buying power and credibility, highest average pay (by over 80 times the averages) and highest customer to “distributor” ratio in out of ANY company even remotely resembling network marketing.
It is often overlooked by the big gamer’s because they have created a fair playing field and do not funnel all the money to the top, but I say, its a good thing to leave the mlm’ers out of it, maybe we are onto something 🙂
This happens with every industry in the world, as you can attach “mlm” or even “scam” to any Industry.
Wazzub was supposed to be Google/Facebook meets profit-share.
TVI Express was supposed to be Travel meets MLM.
Scammers go where the money is, to borrow the credibility of the industry and couple it with the lure of “profit”.
Article updated with the news that the Vitel Wireless website is no more.
Just dropping by! @KChang and all. There have been many times in my life where I wanted to explain, defend, or stay silent. This is one where maybe it is a mistake to post this or maybe it is worthy and deserves the comments, I will let you guys be the judge.
Many companies merge, sell, go out of business and we never know why or the specifics of why it happened. Speculation then arises, and assumptions take over.
Vitel had its opportunity and its 5 minutes of fame, we were growing at an alarming rate, with that in mind we seeked out experts and advice and when we took action and made changes based on advisors and councils advice to ensure we would be a 100% compliant company and offer a solid business that people could trust in.
The good thing was we knew we were legit, compliant, no doubts, no worries, no issues. Those changes proved detrimental to our growth. We then took on a major investment fund which helped us grow again 5 months straight. We were heading in the right direction again.
When we made those major changes, the following months were daily sessions of figuring out what we needed to do, how to grow, how to help, how to make a difference, and so on. Nothing we could do or did do gave us that second opportunity. We came to a conclusion that we had taken the company as far as we could without help.
We started having talks with many companies big and small. Exploring options. We had the opportunity to sell to a major major company and passed, we had lots of options, enough options that it was humbling that that many people were interested in what we had.
At the end of the day none of those opportunities had the distributors best interest at heart nor our investors, or for that matter anyone who believed in us. We turned them all down, we received an opportunity with SS (shopping Sherlock) to merge, ensure the distributors had a home, grandfathered positions, and a future.
This was not the best deal for the investors or owners, and quite frankly my neck will be on the line to see how the deal plays out for a very long time. As you can see I am at the computer not on a white sandy beach if that gives you any indication.
With 500k customers and 10k total distributors we had a great run and attempt at making a difference in our industry. I believe our footprint will have an effect on many and none on many more, either way we did our best, we gave it 100%, and at the end of the day, we didn’t put our pocketbooks before the distributors. If anything it is 10000% the other way around.
Feel free to send me any questions for clarification prior to assuming.
Vitelwireless.com will still offer some products and services that Shopping Sherlock does not take over.
I will be working on tools and products for the industry going forward as well as supporting the merger and needs from the field.
Thanks for that honest and straightforward clarification Scott, it’s a refreshing change from some of marketing malarkey we get on here from company owners and affiliates.
My take away from your comments though was that Vitel only grew and flourished with a suspect compensation plan. After that was changed you guys ran into problems.
A major investment fund no doubt injected cash into the business, but the sales side of things I gather didn’t pickup as it had under the suspect plan, as you explained.
As you no doubt am aware I’m highly critical of Shopping Sherlock and its business model, primarily as they lead with a free application and don’t have a product themselves at a retail level (discounts to other people’s services and products are not products in and of themselves).
Best of luck with wherever the road takes you, no doubt our paths will cross again at some point in your future ventures.