I will not take credit for this angle--I got it from another forum. However, I did think that it was a good way to look at the YTB program for their RTAs and the compensation plan in particular.
From YTB's financial reports reflecting the first 9 months of the year 2007.
On the income side:
- Online travel stores and monthly fees $ 69,031,218 (paid by RTAs)
- Training programs and marketing materials $10,364,547 (paid by RTAs)
- Travel commissions and services $ 13,930,824 (paid by the travel suppliers)
And on the expense side:
- Travel commissions $ 9,398,036 (paid to the RTAs)
- Marketing commissions $ 55,370,759 (paid to the Reps)
OK, now I have all the standard answers:
- You don't know the system
- You can't look at it like that
- You have to join to know about it
- We can't tell you the real numbers because the FTC will get us
- Some RTAs are also Reps
- Etc.
There is no way to determine who is a double dipper in the RTA/Rep bucket, so let's look collectively and call the two groups one.
Collectively, the group has paid into the YTB coffers $70.4 million dollars. This represents the sign ups, monthly fees, and training. This is an average of $582.03 per person or $64.67 per month.
Collectively, the group has taken out of the YTB coffers $64.8 million dollars. This represents marketing commissions paid (Reps) and travel commissions paid (RTAs). This is an average of $535.50 per person or $59.50 per month.
Now I know we are not talking a lot per person, but collectively it is huge, and precisely why I claim that this program will never work and is destined to fail. The average person in YTB over the past 9 months LOST $46.53. That is $5.17 cents a month.
No one would ever think of suing for this amount. More likely, this is something that would be brushed under the rug as an embarrassing mistake. Certainly no court in the land will accept a case where the plaintiff is suing for $46.53.
The program is flawed. When operating a business--any business, money in, less money out equals your profit or loss. Successful businesses will have profits, unsuccessful ones will have losses. The way I see it, out of 120, 949 businesses all but one suffered a loss. And the one that was able to make a profit, made it to the tune of $2.1 Million Dollars--and that company was called YTB.
You can crunch the numbers all you want at the SEC Filing
I also have to question the nearly $2M in salary taken by the top 5 executives at the company for an average of $377K per year. I do not fault anyone taking a large salary for running a business, but I do fault them when in 9 months they each pocket $282,750 and the 120,948 people that are building this business are losing $46.53. It might make for an interesting Excel graph.
This YTB compensation plan babble is getting old John!
ReplyDeleteI though we were going to talk about YTB's competition, namely, TrashVerus and World Dentures?
John: Your overview of the pay plan is a fair one. The results hardly rises to the level of "scam
ReplyDeleteand schemes" and many of the charges leveled by you in the past and others, including every competitor that can punch a keyboard, appear suspect in the wake of it.
As someone who has pioneered industries and products, both in conventional businesses and relationship models, starting any business is not for the faint of heart. I have donated millions to startups.
I think I can live with a loss of $5 bucks a month while I get my travel ducks in a row.
Funny how many of your arguments continue to back up my involvment in the model and the YTB opportunity, for me. YTB could be called another version of Travel Insurance.
Let's see...$5 bucks a month for the opportunity to earn 10's of thousands a month, or even more.
And all I have to do is work.
I'll take that bet..based on everything else I see.
RobertsResorts.Net
I agree with Robert.
ReplyDeleteWhat it boils down to is YTB is a Franchise, and just like any other franchise... people bu into it... whether it be travel, or McDonalds, Chuck E. Cheese.. (ok, bad examples, but you see my point.)
If you buy into a franchise and do nothing... you get NOTHING!
If you do a little, you get a little.
If you do a lot... you get a lot back in return.
The only person who determines how well you do is YOU!!! You have NO BOSS who dictates to you how much you make... per hour. With the cost of living constantly going up... and the pay rate not following suit, then the only alternative is network marketing. It's not for those who can't get a job... or don't want to get a job, and it's not illigitimite business. what it is, is SMART business! Remember the old sayin, "Work smarter... not harder".
Well, Let's take some of Donald Trump's words for it...
David Letterman once asked Donald Trump, 'If you lost everything and had to start again from nothing, what would you do?' He responded, 'I would find a good network marketing company and work hard.' The audience laughed. He then said, 'That's why I'm sitting up here and you're sitting down there.' The audience may have laughed first, but the last laugh actually goes to Mr. Trump. Why? If the laughers have a job, chances are the company they work for is basically an MLM company.
Your response may be ‘Huh?’ and that was my response also until someone who is successful in an MLM company pointed it out to me. But how can that be you may ask? After all I don’t hang out in malls and bookstores waiting to pounce on anyone who gives me the opportunity. Well it’s pretty simple once you think about it. The company I work for has a CEO and then there are several executives under him. Then those executives have Vice Presidents under them, who have supervisors under them and, well get the picture? So that’s the Multi-Level part. Then of course, everyone in the organization is encouraged to recommend the services of the company. If you work for a certain restaurant, you will recommend people go and eat there. That’s the Marketing part.
But that’s where the similarities end. My hard work at my traditional job is rewarded, but the people above me decide upon reward. In MLM, I am paid exactly in proportion to my accomplishments. In the traditional company, slackers may get paid the same amount as me or even more, based upon seniority, who they know, or simply because their slacking is not known. You slack in MLM and you will not succeed, no matter whom you know or for any other reason. In the traditional company, I work the hours I am told, ask if I can take vacation a certain week, take my pager and phone with me on vacation and sometimes even work on my vacation. Not true with an MLM company, since I am my own boss.
Of course, I’m not saying no one should work for a traditional company. That would be lunacy. We need them and their services and people do support their families by working for them. But isn’t it hilarious that so many people hate MLM companies and then go to work for one every day. If you are going to work for one, why not work for your own?
Many people want to know how the people who have a lot of money got it and they want advice as to how they can get a lot of money themselves. But then when someone successful offers that advice on national television, the audience has the audacity to laugh. Who should we listen? The laughers in the audience most of whom probably are hurting in some way financially or Mr. Trump who is financially free many times over?"
Article found:
http://mlm.articlesarchive.net/what-do-you-mean-i-work-for-an-mlm.html
There is also a little problem with the cost figures above which I will correct. The REP pays absolutely nothing into YTB. It doesn't cost anything to be a REP. Only the RTAs have to purchase their way in and pay the $49.95 a month... which after one gets 6 other RTAs in his / her downline... gets reimbursed!
American Express, Donald Trump, Magic Johnson, among others have or will have entered the travel business because they know it is going to become a cash volcano as the millions of baby boomers retire in the next few years and turn their travel fantasies into reality. In fact, they are now selling home based, Internet Travel Agencies for Only $10,000 each!
ONLY $10K??????
Now, somebody mentioned "Cruise Planners". They are owned and run by American Express. Surprise!!! People bought into the franchise and create a chain of "Cruise Planners"
Taken from the Cruise Planner's website:
"Cruise Planners started in 1994 when three travel industry veterans joined forces to create a cadre of franchised travel agents to book cruises out of their own homes. The ideal appealed to people from many walks of life; teachers, real estate agents, travel agents, car mechanics, virtually anyone and everyone who was interested in starting an in-home business while providing an opportunity to travel around the world."
Make sure you read the last few lines above carfully!!! You may be booking your cruise from a CAR MECHANIC... LOL!!!
"No Experience Necessary – We teach you the Cruise/Travel Business
Comprehensive 5-Day Training Class in Fort Lauderdale, FL "
WOW!!! I can learn in just 5 days????
I bet it would cost me thousands to become a Cruise Planner instead of paying a fraction of that, learning the same exact things... plus more, and making far more money.
I'm in the right place... YTB
You see... let's say that a person in YTB doesn't book any travel yet, and gets 6 people into his / her downline. Now, that person just made $1450.00. Subtract the $449.95 Plus... after 6 people, the $49.95 per month is REIMBURSED!!! Guess what? NO MORE OVERHEAD, and it's NOTHING but PROFIT for the YTB RTA from here on out!!!
ReplyDeleteSo, you can take that theory of an average YTB RTA being in the minus... and FLUSH IT DOWN THE TOILET!!! :)
The only way a YTBer or anyone for that matter would lose money is if he/she got into the business (any business) and did absolutely NOTHING!!!
Like I said, you have to really see it... and live it... to realize it. I not only earned more commissions in a year than what I was paid at my old job, but I also have guaranted income inn the marketing side... even if everyone in my downline decides to do absolutely nothing more.
I am not going to speak to Trump because I did not see the show. He made his money on real estate inherited from his father.
ReplyDeleteCruise Planners is not a franchise arm of American Express. They are an affiliate office of American Express much like AVC. Cruise Planners is a host. Amex has no ownership in CP, they have allowed them to operate under their brand. And I believe that all of the independently owned Amex offices are NOT franchises per se. I believe they have a different type of arrangement.
As to the dollars. They are what they are. I cannot determine how many people are in both programs. I stated that the RTAs paid into the program and not the reps. And it does not matter who is getting free or reimbursed sites because the amount of money taken in is the amount of money taken in. If it is later reimbursed, it is reflected in the expense side of the sheet.
As it pertains to the income and expenses for ONLY the Reps and RTAs for the first 9 months of the year there was more money paid BY the reps and RTAs than was paid TO the reps and RTAs.
As for the franchise model McDonalds and so forth. Do you really think that McDonalds, Chuck E Cheese, etc would be in business for long (or be as successful as they are) if their average franchisee was bringing in less money each month than they paid out? Come on. You guys cannot be THAT naive can you?
Again, I say...
ReplyDeleteEach RTA of YTB is in control of what he/she can possibly make.
Do nothing = Make nothing
Do a little = Make a little
Do a lot = Make a lot
Notice that Donald Trump said that if he could do it all over again, he would have done more Network Marketing. He is doing Network Marketing now. Trump has his own network marketing travel website that costs $10,000 to join. Talk about losing money... it would take someone who joined Donald's site some time to get a return on that investment.
YTB is only $500!!!
I was just pointing out to you that the statement of YTB's RTAs losing money is incorrect.
Naive? If you call me receiving more than 1 check in the mail a week... and yes, EVERY WEEK from YTB and fattening my bank account naive... so be it. There's nothing better than being able to walk into a car dealership, haggling a price, and when the dealer asks how, "How would you like to finance this?", you pull out a wad of money and reply, "In cash"!
My credit cards were sky high. Now they are all paid off!
By the middle of next year, my mortgage will be all paid off...
All this and a growing bank account... call it what you want. I call it smart business.
When you retire, you can choose to live off of a pension that's half of your working income... and go work at Wal-Mart part time to make up at least an eighth of the difference... which won't make a difference anyway, because the cost of living will be astronomicaly high by then.I will be continuing to live the good life.
You don't know what your paycheck is going to be tomorrow. I know what mine will be (not including the travel commissions).
Proud--you are the exception then. Congratulations to you!
ReplyDeleteBut why would you walk into a car dealership and buy a car for cash? Why would you not just go to your website and buy it there? YTB sells cars too ya know?
Go back up to where it reads "taken from the Cruise Planner's website", and notice the word FRANCHISED.
ReplyDeleteI didn't type those words... they did... right on their website!!! All I did was cut and paste.
YTB doesn't have LEXUS yet, that's why. Come to think of it... YTB didn't even have YTB cars yet.
ReplyDeleteThe model is broken. A handful of people will generate sales and make money. The majority will pay $50 for a few months and then leave. Once you run out of people willing to risk $50 a month, the game is over.
ReplyDeleteQuestion is, can the business survive solely on those who who make money selling travel? Looking at the numbers, i'd say no way.
House of cards...