Tuesday, July 14, 2009
What do you get when you cross Amway with Amazon? Get rich while feeding Africa, or a Ponzi scheme?
Update at 9:30pm, July 16th, 2009
Well, the TamPogo Compensation Plan has changed since I quoted it yesterday which makes some of my points here moot. I'm doing some extensive editing of this entry to reflect not only the changes TamPogo has made, but also because of some very strong feedback a couple of people have made on these entries.
I'm still skeptical of the company (especially since I still can't find any substantial information about them)---that hasn't changed. What has though, is some of the information the company is providing. But by all means, do your own research …
Normally, I would have ignored the email as spam, but since it came from someone I've known for a long time, I decided to take a look at the TamPogo site and see for myself just what the excitement was all about.
What if I told you that the brains behind MySpace.com has developed a network marketing concept that is free to join, does not charge more for products than you would find in the general market, and has a comp plan that can be done on the back of a business card-no kidding-8 level simple uni-level pay plan with really low requirements and no break-away.
No meetings, no inventory, a laptop is all you need.
From an email I received
It sounds like a standard MLM scheme—you recuit some people, and they recruit people, and so on, and you market products to the people you recruit. If any of your recruits buy products from the TamPogo site (and they claim to have thousands of different items for sale, everything from clothing to toys, but they have yet to list anything on their site). The compensation mentioned in their introductory video makes it sound like you get a $1.20 commission per item , but when you really start digging you find how their compensation actually works:
- Each Fast Track Product purchased by an iRep provides a minimum of $10.00 payout as Network Commission.
- Each of the 8 iReps above the member who made the purchase receives 12% of the Network Commission . The remaining 4% is paid out as monthly bonuses, at Tampogo's discretion [emphasis added —Editor].
- iReps can sponsor an unlimited number of people on any level.
iReps must personally sponsor 8 active iReps to be paid on all 8 levels of their network.
- If an iRep has less than
eightpersonally sponsored, active iReps for a given calendar month, they will be paid commission only on as many levels as they have active iReps. For example, if an iRep has three personally sponsored active iReps, they will earn commission on the first three levels of their network.
- An iRep must purchase one Fast Track Product each calendar month to remain active.
If an iRep does not purchase one Fast Track Product in a calendar month, they will not be eligible to receive commission or bonuses.
- If an iRep remains inactive for a period of six months, they will be removed from the Network and lose their position and downline and rollup will occur.
- Commission and bonuses will be paid out on the 5th of each month for iReps who have a minimum of $25 of commission .
iReps agree that a minimum of 50% of all products they purchase will be sold to a Retail or Direct Customer.
- TamPogo commissions are paid based on a Unilevel Network with dynamic compression.
- Direct Customers are assigned to an iRep and given a Member ID.
- When a Direct Customer makes a purchase, 50% of the Network Commission generated is paid as Sponsor Commission and 50% is paid to the network.
Retail Customers purchase product directly from an iRep.
Retail Customers do not register on the TamPogo website or receive a Member ID.
Once approved by TamPogo, a Non-Profit Organization can enroll as an iRep.
A Non-Profit Organization is exempt from the monthly purchase requirement.
A Non-Profit Organization will not be allowed to make purchases.
[If you aren't reading this on July 16th, 2009, be aware that the TamPogo Compensation Plan may have changed yet again. Your best bet is to check the source directly. —Editor]
The video concentrates so much on how much you could make that
they tend to gloss over the little details shown above. You only get
commission on sales to your “network partners” and “direct customers”
(who have signed up under you).
Make a sale to anyone not signed up—no
commission. And the commission doesn't appear to be exactly “flat”
That kind of takes the excitement out of the video.
[The following paragraph is struck because of extreme bias against multi-level marketing. —Editor]
So it seems that the people at TamPogo found a way to “cushion” the
Ponziesque feel of your typical MLM plans,
as well as one of the major problems I see with
companies like Amway (the ever filling garage). Plus, given the free signup
and ongoing requirement to buy at least one “fast track product” per month
(and TamPogo indicates which products are “fast track”—which means “a
product priced between $20–30”) it will at least limp
along without getting too imbalanced.
Anyway, the real problem I have with the company is that I can't find any reliable information about the company. Those “brains behind MySpace.com”? The “brains” behind MySpace are Brad Greenspan, Chris DeWolfe, Josh Berman and Tom Anderson (according to Wikipedia) and as much as I tried, I couldn't find any associations between them and TamPogo.
I did eventually get a name: Chuck Stebbins. And it came with the following information about him:
- Mr. Stebbins is one of the most profound internet marketers who has ever lived, having sold over $1½ billion in products over the internet.
- In the 90's Mr. Stebbins launched his own e-commerce company called Intermix.
- In 14 short months, he grew Intermix to a staggering 34 million people, and then sold it to MySpace for a whopping $250 million dollars.
Now, I've never heard of the guy, but then again, there are any number of Internet marketing gurus I've never heard of. But you would think his name would at least show up on the Wikipedia page of Intermix. But no, it does not.
It is especially odd that Intermix was supposedly sold to MySpace, given that Intermix developed MySpace; someone is confused about who bought whom.
Also strange is that Intermix was an Internet Marketing company; the notion that they had 34 million people is curious. And, according to BusinessWeek, MySpace only had 22 million users when it was sold in 2005 (for $580 million, but I digress).
And nowhere on the site do you find any information about the company itself, who owns it, who runs it, nothing.
And I have to ask myself, why?
Update on July 15th, 2009
The store opens! Or maybe not.