I am not sure if I am not explaining it correctly, but my point is that YTB is not making their money off of travel. It is off selling the websites and collecting monthly fees. One YTB RTA has claimed that YTB has sold over a billion in travel. Maybe over their life, but not in recent memory and certainly not this year.
Allow me to quote her latest rant in the comment section and then I will explain my position:
- Proud to be YTB said...
And where do you think they got the milliond in commissions from travel in their earnings report??? if the company YTB is earning 16% from cruises, and less percentage for total sale of other bookings... then yes, YTB made billions in travel sales to earn those millions! DUH!!!!! it doesn't take a rocket scientist to figure out that total sales is NOT equal to total earnings... especially for a travel company! The vendors get paid too!!!
Line #3 says it all!!! "TRAVEL COMMISSIONS" NOT "TRAVEL SALES" Two different things there pal!!!
I thought I was dealing with smart people here? Again I disprove what you say!!!
Also, you just backed up my statement with what you replied about FAM trips... and I quote...
"I said suppliers could correct the issue and restrict to whom they offer discounts or FAMS. It is easy--give the perks to those that deserve them--not someone that tries to buy their way into the program."
In a nutshell, you agree that it is the vendors who issue the FAM trips, so it's the VENDORS fault! YTB is NOT to blame!!! The vendors could restrict or halt the issuing of FAM trips to a specific company!!!
Shot... SCORE!!! Hahahahaha!!!
For 3Q 2007
- Total Revenue: $39,869,242
- Online travel stores and monthly fees: $28,691,270 (72% of their revenue)
- Travel commissions: $5,536,399 (13.9% of their revenue)*
- Training programs and marketing materials: $3,651,184 (9.2% of their revenues)
- Other: $1,990,389 (5% of their revenues)
For YTD in 2007
- Total Revenue: $95,918,855
- Online travel stores and monthly fees: $69,831,218 (72.8% of their revenue)
- Travel commissions: $13,930,824 (14.5% of their revenue)*
- Training programs and marketing materials: $10,364,547 (10.8% of their revenues)
- Other: $2,592,266 (2.7% of their revenues)
Now there was an asterisk (*) next to travel commissions up there. This is the total amount that YTB received on behalf of all travel sales. The commissions paid out to the RTAs are an expense and not reflected here. It has been said that across the board, YTB earns 8.2% commission. This is when you figure in some of the higher producing commissions like Carnival at 16%, and some lower ones like airline ticket at $6.00 per transaction. To make it easy, can we agree to call it 10%?
If YTB has earned $13,930,824 in commissions (which is a great number for an agency, but a pretty crappy one for an agency with almost 150,000 agents), they would have sold $139,930,824 in travel this year to date. Seems like it is $861K shy of a billion. For argument's sake, let's use 16% commission--that means that they would have sold $84,600,000 in travel--oops that is further away from a billion. Maybe that 8.2% was closer. Let me check...oops, that shows they wold have sold $170,000,000. Wait, I know, they actually sold $1,000,000,000 and were earning 1.39% commission. Well, which number do you want to use?
And I will drive home a point I have made time and time again, the sales numbers are admirable. I am quite sure they are earning mega-bonuses for your Carnival BDM and other suppliers that do business with YTB and the MLM crowd. But it further emphasizes the fact that you do not sell travel. You are selling websites and collecting fees. Will these numbers stand up to the Burn Lounge sniff test?
In the past quarter, you had 106,000 RTAs (from your July report) and you managed to sell about $55 million in travel product. That is $518.87 per RTA. Those sales, resulted in $5.5 million in commission to YTB which took 40%. This allowed the RTAs to earn $3.3 million or an average of $20.63 (and I rounded up) per RTA for the quarter.
Sales per day per RTA $5.77
Commission per day per RTA .23 (yes, that is 23 cents per day)
Let me put this in perspective. A cup of coffee at McDonalds for a senior citizen is 25 cents. If the RTAs work really hard, Monday through Friday, they will be able to afford something off the "Dollar Menu" on Friday night. But only one thing. ANd only if you live in a state that has a reasonable sales tax!
Quod erat demonstrandum!
So, tell me how YTB travel types break down and we will talk real numbers.
ReplyDeleteGo into your back office and pull the numbers.
I want to know the percentage of business that reflects each of these categories:
Cruise
Tour
Hotel
Car
Air
Rail
Other
JF . . . The number that is being talked about (over $1 billion in travel sales) is the TOTAL sales for the company since its start in 2001) I know you dispute last year's numbers of $226 million, but, add that to $450-500 million in sales for 2007 (to date) along with the previous 5 year's sales.
ReplyDeleteIf anyone is talking $1 billion in travel sales, that is the period that they are talking about.
Proud...this will be my last response to you until you go here.
ReplyDeleteYou have sold $67,483 in 11 months. YAY for you. The fact that you sold ANYTHING puts you way ahead in the RTA race at YTB.
Now let's see what you really have earned this year and let's see if you earned a "living" selling travel. I bet not!
16%. If you earned 16% on all sales, YTB would have received $10,797 in commission and your 60% cut would have been $6478. $588 a month. $19 a day. Annualize it and you have earned $7056 for the year. Based on a full time schedule that works out to $3.39 per hour
10%. If you earned 10% on all sales, YTB would have received $6,748 in commission and your 60% cut would have been $4048. $368 a month. $12 a day. Annualize it and you have earned $4416 for the year. Based on a full time schedule that works out to $2.12 per hour
5%. If you earned 5% on all sales, YTB would have received $3,374 in commission and your 60% cut would have been $2024. $184 a month. $6.13 a day. Annualize it and you have earned $2208 for the year. Based on a full time schedule that works out to $1.06 per hour
So what is it? Making tons of money for this endeavor? Your expenses along are $500 for the opportunity and $600 for the rental. Assuming no other expenses, that brings you down to an hourly range somewhere between $2.86 on the high end and .53 cents on the low end!
But as I said, till you go visit that link and return with your certificate, I am done responding to your lunacy.
lb--thanks for the clarification. But I still say you are not gonna break $200M in sales for this year.
ReplyDeleteWe'll have to agree to disagree. I know, in my group, we are selling more and more higher commission travel venues, but we still sell a ton of airline tickets. They count as travel sales, but the commission to YTB is only $5.00 per ticket from World Choice. That naturally dilutes down the commission numbers.
ReplyDeleteI will agree with those who say that we need to increase our travel sales. And I believe we are. But it will NEVER equal the traditional TA level except for those that are with us with a traditional background. But the sales per RTA will increase. I have seen more interest in travel sales from my Team in the past 6 months than ever before. We had a large number of RTAs attend one or both of the Funshine events this year and I only had THREE RTAs attend a year ago.
I foresee a stronger emphasis on travel sales along with a tough stance against RTAs behaving inappropriately at travel training venues and on FAM trips. I foresee RTAs turning in other RTAs that are out of bounds. Changes need to be made and I believe they will. It will take time. But I believe YTB will move through this period and be a better company because of it.
lb--I agree, that if these changes can be affected, it will go a long way towards a resolution.
ReplyDeleteI think that Arnie said that in the end, they will be a lot smaller and will lose the MLM aspect and may very well become a legitimate player in the travel industry (my words paraphrasing him so please do not shoot me).
If so, let's have a beer! But as GWB says, "There's work to be done. Hard work to be done."
John You tickel me...I've never seen anyone in my life knock $1 Bil in sales and a $100 mil financial report. Leave it to you...
ReplyDeleteI believe Online, community based, relationship marketing travel sites and businesses is an excellent product to offer while the travel booking business grows too. And it is growing...Isn't that your REAL PROBLEM with the model?
RobertsResorts.Net
I want to know who Virginia Roberts is?
ReplyDeleteAnd if EAB is making so much cash then why does his link use a Yahoo email account? Come on now it doesn't take much to get your own domain name with a real email address. I doubt what he is spouting is the truth.
EAB is your real name Virginia?
One more question YTB is talking about having their agents do $1500 in sales before they get their card.
ReplyDeleteMy question, which nobody has answered yet....how does this effect all the current agents? Is this a one time thing or monthy, yearly? If its a one time thing this hardly fixes it in peoples eyes. They still will be the laughing stock of the industry.
So, you assume that I have been with YTB for a whole 11 months. Try about 6 months! To do $67,000 in sales in that short a time and become a director is quite an accomplishment in my book. I'm not done yet! I still have that big cruise I'm working on. This will be booked by the middle of December, and will push me over $100,000 in sales for the year!
ReplyDeleteGetting back to your original statement that YTB doesn't generate as much sales in travel as it does in marketing... Then you looked at the commission earnings rather than focusing on total sales. Total sales and total commissions are two different things.
Ok, if YTB did over $1 Billion in total sales (not commissions)since it (opened which it did), YTB also did almost $70 Million in marketing sales since day 1. Still, $1 Trillion dollars is higher than $70 million. So, yes... looking at it that way, YTB generated more sales in travel that they did in marketing.
I may stand corrected on the time frame of the $1 billion, but I stand correct on the topic of total travel sales vs. marketing sales.
I admit that I may know a lot about YTB, but I don't know everything.
You must admit that the only things you know about YTB are what people tell you... which a lot of it is misinformation... which I have shot down by voicing what I do know. Like I said, why don't you attend a meeting... just for the sake of knowledge.
Now, I'm being cool now. No hostility. As a person, I'm sure you're ok, but we are on different sides of the fence when it comes to business.
I put it out there that I would be more than willing to attend a meeting, just tell me when and where, after the first of the year, but so far no one has taken me up on my offer.
ReplyDeleteProud To Be YTB--
ReplyDeleteI do not recall seeing where he co-mingled sales and income. Revenue is income regardless of the sale amount.
It seems to be a basic S/CoS formula to me. Of course the travel sales are going to be hugely higher if the commission is so relatively low.
My business (auto parts) has an incredible mark up and to be honest I would have no idea how to operate in a single digit environment.
But since the majority of the sale is pass through revenue, YTB cannot claim that. Sure they can report that in terms of sales, but cannot claim it. In my retail stores, we actually purchase inventory so when we buy it we own it. When the customer buys it, they own it. In travel (from what I gather) the supplier owns it and the agent merely brokers it and the transaction is REALLY between the supplier and the end user.
Dear Proud to be YTB,
ReplyDeleteIf you have sold $67,000 in travel in the last 6 months, and had to give up 40% of your commissions to the mother ship, that puts you at living below the national poverty level.
So... what is it that you are so proud of??
If you really capable of the sales that you are claiming, why the heck are you giving up 40% of your commissions?
let's look at this from a different approach.
ReplyDeleteIf YTB did $1 billion in sales, if they got 16% commission on ALL sales their total commission would be $160 million. If they got 10% across the board, then their total commission received would be $100 million. Even at 5% commission it would be $50 million. $5 million in commission for one quarter puts them waaaaay off the $1 billion mark in travel SALES.
The vast majority of vendors pay 5% commission or better ... the standard is typically 10%.
And if all they sold was airline tickets with a $6 service fee per ticket, to make $1 billion in service fees alone would require selling over 166 million tickets ... which averages over 1,100 tickets sold PER RTA. So I will hazard a guess that the bulk of their commissions received is NOT heavily dependent on airfare service fees. And just assuming 10% across the board when you factor in hotel sales, car rentals, cruise sales, etc. ... they aren't close to $1 billion a year.
Oh wait, do you think their "sales" includes fams and TA rates ... noncommissionable sales??? Yeah, there's a way to fudge the numbers....
1. they don't take 40% of my commission. I am getint 70% of theirs! That's the 60% plus the 10% override.
ReplyDeleteAlso, you are forgetting about the residual income I get from YTB. After all, we are network marketing as well as travel. That's something you will never understand. Donald Trump gets it.
Proud to be sane, you are missing my point and the topic entirely.
John posted that YTB does more selling of websites than it does travel. My last post rested that case... and it wasn't in the favor of John. He was going by the commisions paid to YTB... assuming that it was the price tag of the total sales. Total sales cannot be counted as revenue, because it was never YTB's. Only the commissions from the sales can be counted.
"John posted that YTB does more selling of websites than it does travel."
ReplyDeleteThis is inaccurate... John specifically said: " but my point is that YTB is not making their money off of travel. It is off selling the websites and collecting monthly fees. One YTB RTA has claimed that YTB has sold over a billion in travel."
First, he didn't say they sold more websites than travel. He said is making more money off their website sales than from their travel sales (i.e. their incoming commissions). YTB's own SEC report supports that.
Second, the claim that $1 billion in travel sales annually ... if that were the case, YTB would be brining in $50 million or more per year in travel commissions.
Ok, if YTB did over $1 Billion in total sales (not commissions)since it (opened which it did), YTB also did almost $70 Million in marketing sales since day 1. Still, $1 Trillion dollars is higher than $70 million. So, yes... looking at it that way, YTB generated more sales in travel that they did in marketing.
ReplyDeleteNotice I said "since it opened" that means all the way back to 2001 until now.
I retracted my first statement admiting that I was wrong about the time frame of 1 year thing. Again, you don't read what i type in it's entierty, and still assume I'm talking about $1 trillion in a year. Any way you look at it, YTB still sold more travel than it did websites.
"Any way you look at it, YTB still sold more travel than it did websites."
ReplyDeleteBut the issue isn't gross sales ... our issue is with where the bulk of their INCOME comes from ... and that is lopsided towards marketing/website sales/training. Of the total income YTD, travel sales commissions is less than 15% of YTB's total income. Their gross sales could be a million, a billion, a trillion, or a bazillion. It doesn't matter because their income is primarily derived from nontravel sales.
So if I sell a single car, and that equates to 15% of my total income for the year, does that make me a car dealer?
Proud to be, I still don't get it. Even if you are making 70% of your commissions, you are still making less than 100% of your commissions, and you are still making less than the national poverty level. You can talk about how much YTB corporate is making all day long, but what are you making?? How many hours did you have to work to sell $67,000 in travel? There are lots of YTBers bragging about how much the company makes, but I have yet to find and rta that earns enough to live on even with the "residual income."
ReplyDeleteThere is a big difference between owning and operating a business, and buying a job. If you are with YTB, you bought yourself a job. And a minimum wage job at that.
Proud Said:
ReplyDeleteYou're so smart, why don't you call YTB and ask them how much total travel sales they have done this year?
Have you not looked at YTB's SEC filings?: Should we assume that the information they put in those is incorrect andcall them for the correct numbers?
If I did $67K over six months I'd be hanging my head in shame!!! I'm expected to sell $84k per month and always exceed that!!! Oh, every Agent in the Agency I work at does sales of that calibre - not just one out of 250 like YTB RTAs seem to do!
It's accurate. YTB has made more money through website sales than travel sales, but that doesn't mean that YTBB hasn't sold more websites than travel. You are implying that YTB is mainly marketing... yet you fail to recognize that YTB's commission is just a small part of the total travel sales that were generated through YTB!
ReplyDeleteCruises: 16% that .16 for every $1.00
Airfare: No matter whether it's a $200 flight or a $1800 flight, the commissions paid to YTB are $5.00. for domestic and $10.00 for international. We can all agree that most travel booked are flights... for any agent (only YTB... although it's small... receives a commission). We can also say that it is impossible for the average joe (not corporate YTB) to figure out exactly how much travel sales were generated, because the commissions earned doesn't reflect whether a flight was $200 or $2000.
We could sit here and crunch numbers all day long, but it's time to face the facts.
YTB IS HERE TO STAY!!! And it's driving you nuts, because you can do a damn thing about it... just like you couldn't stop Travelocity...
Travelocity is an online travel agency. YTB is a marketing company that uses Travelocity's booking engine to sell websites to other people that are looking to buy into some perks in an industry that had been admittedly lax in policing themselves.
ReplyDeleteTHe industry is waking up and if YTB is here to stay, I say thay will need to completely reinvent themselves to do so.
It is already starting. The agents are up in arms and they represeent a LOT more money to the suppliers than YTB does. Some suppliers are up in arems, One of the credentialing assocviations is up in arms.
"We can all agree that most travel booked are flights... for any agent (only YTB... although it's small... receives a commission)."
ReplyDeleteNot true. First off, YTB does not make commission off airfare sales ... they are getting a $5 to $10 service fee. The same fee that Orbitz, Expedia and Travelociy charge. So YTB isn't the only one getting that fee paid to them on airfare.
I don't typically go air only, but on the rare occasion when I do I can run laps around Travelocity (meaning YTB too), Expedia and Orbitz saving my clients more than they pay me in a service fee. My most recent example was saving a client over $200 per person flying to Molokai from LAX. For that kind of savings she didn't bat an eye at paying me $35 per for a service fee. That's 7 times what YTB gets for charging clients possibly more....
Oh, and on international airfare I do get an actual commission (typically between 4% and 12%), not just a $10 service fee.
When we book through our back office vendors, we are free to charge whatever commission we want (this does not include domestic air), but YTB does not want us to charge more than 10%. It just wouldn't be right.
ReplyDeleteWay to be...proud to be
ReplyDelete