ClubShop Review: Ecom pyramid & potential token Ponzi
ClubShop provides no information on its website about who owns or runs the company.
On its website, ClubShop claims it was ‘formed and incorporated in Englewood, Florida, USA in June of 1997.’
This conflicts with information provided in the footer of ClubShop’s website;
Copyright © 2018-2021 – Clubshop Rewards Program by Proprofit Worldwide Ltd.
Proprofit Worldwide Ltd. – 98 Chingford Mount Road – E4 9AA – London, UK | Company Number: 8525700
Through the WayBack Machine archive I learned that prior to ClubShop, the company went by Discount Home Shoppers Club.
This dates back to the late 90s. An address in Englewood is provided, however without company ownership information it’s impossible to establish whether ClubShop today is owned by the same individual(s) as the older iterations.
ClubShop’s website domain (“clubshop.com”) was first registered in June 1997. The domain registration was last updated on June 19th, 2020.
Proprofit Worldwide is listed as the owner, through an address in London, UK. This syncs with the UK incorporation details referenced above.
UK incorporation is dirt cheap and effectively unregulated. It is a favored jurisdiction for scammers looking to incorporate dodgy companies.
For the purpose of performing MLM due-diligence, UK incorporation is meaningless.
A search for ClubShop’s CEO returned an ancient 2006 press-release naming Dick Burke.
This led me to Richard Burke (right), who cites himself as ClubShop’s President on LinkedIn.
As per Burke’s LinkedIn profile he’s based out of Englewood, Florda.
While researching ClubShop I came across a page on their website titled “Meet the CEO”:
As above the CEO wasn’t named. He does however feature in other ClubShop blog posts and is named Fabrizio Perotti.
On LinkedIn Perotti (right) cites himself as a Director of Proprofit Worldwide.
That led to Discount Home Shopper’s Club’s Wikipedia entry, which states;
In 2018 the Clubshop brand was acquired by Proprofit Worldwide Ltd.
Proprofit is a marketing company founded in 2013 by Fabrizio Perotti and Giuseppe Francavilla, the Clubshop Executive Directors who successfully developed the DHS-Club and Clubshop brands in Italy from 2001 to 2012.
Prior to purchasing ClubShop Perotti was promoting Ad2Prosper, an adcredit pyramid scheme.
A February 2019 ClubShop blog post mentions a ‘new Clubshop platform only a few days ago’. This is presumed to be the current ClubShop MLM opportunity iteration.
To summarize; ClubShop is run by former affiliates Fabrizio Perotti and Giuseppe Francavilla (right).
Perotti is from Italy but now resides in Portugal. Francavilla still resides in Italy.
ProProfit Worldwide is a UK shell company and, unless I’m missing something, ClubShop currently has no ties to the US.
Read on for a full review of ClubShop’s MLM opportunity.
ClubShop has no retailable products or services, with affiliates only able to market ClubShop affiliate membership itself.
ClubShop runs an ecommerce platform, which for non-affiliates is free to sign up.
ClubShop’s ecommerce platform provides access to discounts and cashback.
ClubShop’s Compensation Plan
ClubShop refers to its MLM opportunity as GPS; Global Partner System.
GPS includes all you need to run your own business and make your entrepreneurial life easier while you work to achieve your goals.
There are seven GPS affiliate membership tiers:
- Basic – $14.90 a month
- Basic Plus – $29.90 a month
- Pro – $49.90 a month
- Pro Plus – $89.90 a month
- Premier – $129.90 a month
- Premier Prosperman – not disclosed
MLM Commission Qualification
ClubShop affiliates have two options to qualify for MLM commissions:
- recruit and refer affiliates/members who purchase products through ClubShop’s ecommerce platform
- pay ongoing affiliate membership fees
ClubShop’s official compensation documentation states method two is ‘the easiest, fastest, and most secure way to get and keep qualified’.
ClubShop affiliates earn a 50% commission on the first monthly fee paid by personally recruited affiliates.
This 50% commission is also paid out when a personally recruited affiliate upgrades their membership tier.
Residual Recruitment Commissions
ClubShop pays residual recruitment commissions via a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
ClubShop caps recruitment commissions at six unilevel team levels:
- level 1 (personally recruited affiliates) – 2%
- level 2 – 3%
- level 3 – 4%
- level 4 – 7%
- level 5 – 14%
- level 6 – 20%
Note that residual recruitment commissions are paid on affiliate membership fees paid after the first month.
Guaranteed Monthly Returns
ClubShop pays qualifying affiliates a fixed monthly return.
The amount paid each month is determined by which of fifteen affiliate ranks is qualified for:
- Walton (earn between $40 and $79.99 a month and have Basic Plus or higher membership) = $10.10 a month
- Brin (earn between $80 and $149.99 a month and have Basic Plus or higher membership) = $50.10 a month
- Page (earn between $150 to $249.99 a month and have Pro or higher membership) = $100.10 a month
- Bloomberg (earn between $250 and $499.99 a month and have Pro or higher membership) = $200.10 a month
- Ellison (earn between $500 and $749.99 a month and have Pro Plus or higher membership) = $410.10 a month
- Koch (earn between $750 and $999.99 a month and have Pro Plus or higher membership) = $660.10 a month
- C. Koch (earn between $1000 and $1499.99 a month and have Pro Plus or higher membership = $910.10 a month
- Slim (earn between $1500 and $1999.99 a month and have Premier or higher membership) = $1370.10 a month
- Ortega (earn between $2000 and $2499.99 a month and have Premier or higher membership) = $1870.10 a month
- Zuckerberg (earn between $2500 and $2999.99 a month and have Premier or higher membership = $2370.10 a month
- Arnault (earn between $3000 and $3999.99 a month and have Premier Plus or higher membership) = $2750.10 a month
- Buffett (earn between $4000 and $4999.99 a month and have Premier Plus or higher membership) = $3750.10 a month
- Gates (earn between $5000 and $5999.99 a month and have Premier Plus or higher membership) = $4750.10 a month
- Bezos (earn between $6000 and $9999.99 a month and have Premier Plus or higher membership) = $5750.10 a month
- Prosperman (earn $10,000 or more a month and have Premier Prosperman membership) = $9750.10 a month
ClubShop pays commissions on
Clubshop Mall purchase made (online and offline) by Shoppers, Affiliates, Trial Partners, and Partners who are positioned anywhere in your entire 6-generation commercial network.
The same unilevel team with the same percentages paid out as recruitment commissions is provided.
Presumably this means ClubShop pays a percentage of affiliate commissions it makes when ecommerce platform users shop at partnered merchants.
ClubShop affiliate membership ranges from $14.90 to $249.90 a month.
The more a new ClubShop affiliate spends when they sign up, the higher their initial income potential.
I want to preface this conclusion by stating this is a review of ClubShop as it is today. I’m doing this because ClubShop’s marketing relies heavily on what it was years ago.
Back in the day ClubShop saw the majority of its millions of members across the US, Italy (where the current owners are from), France, the Netherlands and Belgium.
Today, as per Alexa, ClubShop’s top drivers of website traffic are Russia (11%), Venezuela (9%) and Mexico (6%).
Russia and Venezeula are hotbeds for scams, with Venezeula in particular establishing itself as a sucker for MLM Ponzi schemes over the last few years.
Russia is what it is and always has been. When an MLM company is popular in Russia ninety-nine times out of a hundred it’s because of a fraudulent business model.
ClubShop combines a pyramid recruitment model with what I suspect is a less talked about two-tier Ponzi backend. The ecommerce platform is smoke and mirrors.
Let’s start with the obvious; charging affiliates fees and paying commissions from those fees in MLM constitutes pyramid recruitment.
This is especially true when the only thing ClubShop itself sells through its compensation plan is affiliate membership.
Moving on we have the guaranteed monthly returns.
Your ultimate goal is to achieve the “Prosperman” Income title to enjoy the corresponding minimum monthly income of $10,000 per month.
Ecommerce affiliate margins are slim enough as it is. There is no way known ClubShop is paying guaranteed monthly returns from whatever they receive through their ecommerce platform.
The only other source of revenue entering ClubShop is affiliate membership fees.
Recycling said fees ties into the majority of commissions earned through recruitment, creating a closed-loop flow of money. Or in other words, a Ponzi scheme.
That’s the first tier. The second tier of ClubShop’s Ponzi scheme is TangiCoin. And here’s where things get really murky.
In addition to increasing your income, buying higher priced ClubShop affiliate membership tiers provides you with more TangiCoin.
TangiCoin is tied to TangiWorld, which was first promoted as part of Ad2Prosper.
This strongly suggests Perotti wasn’t just promoting Ad2Prosper, he owned it.
Ad2Prosper was a five-level deep pyramid scheme. ClubShop is the same fraudulent recruitment model, expanded by one level to six.
TangiCoin appears to have initially been promoted on “tangicoin.org”. Today that domain hosts a stock WordPress install.
The domains security certificate is also misconfigured. It points to Ads2Prosper’s website domain:
I’m not sure how many TangiCoins are out there, but there is this ERC-20 shit token created 942 days ago. That’s June 2018, the same year Perotti purchased ClubShop.
Given the 425 TAG total supply, perhaps this was a prototype (ERC-20 tokens take 2 minutes to set up).
ClubShop are awfully cagey about how TangiCoin fits into their compensation plan. Other than how much you get when you sign up, there is no mention of TangiCoin anywhere.
TangiWorld is featured, on one broken webpage;
I suspect ClubShop sets an internal TangiCoin value, letting affiliates withdraw their coins through an undisclosed internal exchange.
This is your typical MLM crypto Ponzi points model and would be the second-tier of ClubShop’s Ponzi component.
Certainly none of the third-party merchants on ClubShop’s ecommerce provider won’t accept TangiCoin. So other than
speculative manipulated investment, TangiCoin serves no purpose.
Even if you discount the TangiCoin investment scheme, the guaranteed monthly returns ClubShop offers constitutes a securities offering.
Neither ClubShop, Fabrizio Perotti or Giuseppe Francavilla are registered to offer securities in any jurisdiction.
This alone means ClubShop is operating illegally. Throw in pyramid recruitment and the business model goes from bad to worse.
Every Partner’s goal is to gradually reinvest a part of their monthly earnings to upgrade to a higher GPS type, including more benefits and more advertising shares to boost the income growth rate.
As with all MLM Ponzi and pyramid schemes, once affiliate recruitment dries up so too will returns and commissions.
GPS is under a strict NO-REFUND policy, and no refund is possible under any circumstances.
This will prompt a collapse, resulting in the majority of affiliates losing money.
One last thing I want to touch on is ClubShop’s advertising coop. I’m a bit grey on the details but in addition to getting coop shares when you sign up, affiliates can also buy the shares directly.
Supposedly something something advertising coop shares translate into recruited affiliates provided by ClubShop.
If you need more members for your team to boost your growth, you can buy more advertising shares at any time through our Coop Advertising Program.
Sounds bullshit because it probably is. And note the emphasis on recruited affiliates. The Advertising Coop only targets the business opportunity.
For those of you still perhaps sitting on the fence regarding the legitimacy of ClubShop’s ecommerce platform model, ask yourself this:
If ClubShop’s ecommerce platform was actually viable, why is the platform dead in countries it was once popular in?
Online shopping is as big as ever, so the problem obviously lies with ClubShop.
Namely that ecommerce in the current business model is just a cover. Whether the platform is marketed or not is neither here nor there.