26 Nov 2013, Posted by admin in Packages, No Comments. Tagged BK Boreyko, Carli Hudson, Cincinnati, Lindner College of Business, pyramid scheme, University of Cincinnati, Vemma Nutrition, Young People Revolution
An Arizona marketing company targets young adults in Cincinnati, but are its get-rich claims too good to be true?
Story, video and photos by Carli Hudson
Young adults crowd UC’s Zimmer Auditorium on an autumn Tuesday night. As they talk about their weekend, many sip Verve!, an energy drink in a hard-to-miss bright orange can. When a young man strides onto the stage, the crowd quiets.
“Raise your hand if this company has changed your life,” the man says. More than half of the people do. Others smile.
The speaker, Jason Doublett, is a “brand partner” for Vemma Nutrition, makers of Verve! That means he’s an independent buyer and distributor of the drink. He’s not the only brand partner in the house, though many in the crowd have been invited to check the company out.
Like Mary Kay cosmetics and Amway, Vemma Nutrition is a multi-level-marketing (MLM) company that trains its customers to be its representatives and salespeople in their communities. Based in Scottsdale, Ariz., Vemma recently expanded to Cincinnati.
Vemma does all of its distribution and advertising through brand partners and word of mouth. These partners, or what Doublett calls “glorified customers,” make money by marketing and representing Vemma products.
Doublett has left school temporarily to pursue work for Vemma full-time and does not regret it. Like his peers in Zimmer, he says he makes a lot of money – and he’s just getting started.
Other Vemma speakers talk of becoming very wealthy at a young age. Most brand partners aren’t yet 30. They say they are part of the “Young People Revolution,” or “YPR,” that will change the future of business.
And while they extol the virtues of their jobs, they face skeptics who doubt the possibility of making $500, $5,000 or even $50,000 a month, as Vemma espouses.
Nonetheless, more than 1,800 people in the Tri-State are now involved with the business, which made its way to the area last year after a Cincinnati native got involved with it at Arizona State University.
BK Boreyko, Vemma’s CEO, worked for Amway Global, another MLM company, before starting Vemma in 2004. Vemma markets health products that contain a liquid multi-vitamin called “vemma,” which stands for vitamins, essential minerals, mangosteen (an exotic fruit from Southeast Asia) and aloe, in the form of liquid multi-vitamins for adults and children as well as a line of weight loss products.
But their No. 1 product is Verve!, an energy drink aimed at college students.
Vemma brand partners spend a lot of time on college campuses promoting Verve! and recruiting college students to work as partners. Workers earn more by recruiting others to join them. That is the part that concerns experts, including the BBB, which gives Vemma a C+ rating and notes more than two dozen complaints.
Many of the complaints are from former brand partners looking to get back a portion of the $500 in start-up costs they had paid.
The recruitment aspect of the business also draws skepticism. Critics liken Vemma to a pyramid scheme.
Doublett, who says Vemma is not a pyramid scheme, notes that Vemma is approved by the Direct Selling Association.
“[In a pyramid scheme], it’s just a transfer of money from pocket to pocket,” Doublett says. “You don’t get anything in return. In most MLM companies – like Vemma for example – you’re not giving anyone your money, you’re buying the product. You’re getting a tangible product for your money. So you’re never out money at all. You’re actually getting something for the money you’re investing.”
While marketing companies like Vemma aren’t illegal, the head of marketing at UC’s Carl H. Linder College of Business cautions that not many people will get wealthy from them.
“MLMs allow a few people to benefit financially through the work done by those that join later on,” Karen Machleit says. “Promises of success are made, but as more people enter the MLM, the chance of success drops because the market is saturated.”
Although the small print at the bottom Vemma’s website says, “results not typical,” Doublett and his fellow brand partners express confidence that they will one day earn more than seven figures.
At the UC event, a 27-year-old Vemma brand partner from California says he has made more than $200,000 in a month, while a few brand partners in Cincinnati have made more than $100,000 a year, Doublett says.
Anyone who puts in the effort can be successful with Vemma, he says.
Much of the marketing that Vemma does is on Facebook and other social media. YPRers post statuses about their successes and links to articles about wealth. Their posts are littered with hashtags like #YPR, #success, #legacy, #billions #standout and #dreambig.
While meant to be inspiring, the posts have triggered a backlash. One group of UC students created a mock Facebook page for a fictional drink called “Tåg Energy.” They claimed the drink was Vemma’s No. 1 competitor and to wrote posts mocking the MLM business model.
“Events, events, events, guys! If you are not yelling at people in a basement somewhere, they aren’t going to understand why they should join! The world will only become a better place if you get people to become brand partners!” a post says.
Brand partners call naysayers “pathetic.”
Doublett says the people who posted on Tåg’s page, along with most of Vemma’s other “haters,” are simply closed-minded and uneducated about the company.
But some who are critical of the company know more about its operations than any outsider could.
“There was a lot of stuff going on in the company that I didn’t agree with,” says Tyler Phillips, 20. A student at the Southern Baptist Theological Seminary in Louisville, Ky., Phillips became involved with Vemma in July 2012 and quit a few months later. “I decided to go to college and pursue a degree.”
Vemma brand partners have been known to look down on those who go to college, although the company has recently backed off such criticism. It has even begun a scholarship program for brand partners in college.
Doublett maintains that YPR appeals to young people who define success as being your own boss, avoiding a 9-to-5 grind and making good money, possibly without a college degree.
Phillips, though, has a different take on the demands of brand partnerships. “You’re not actually selling a product. All you’re doing is marketing the product, trying to get people to sign up,” Phillips says. He says Vemma partners have little free time because they’re constantly making phone calls, setting up events and recruiting people. All that effort, he says, yields maybe a couple thousand dollars a month.
“If you’re not signing people up, you’re not making money,” he says.