There are several travel MLM companies out there just now. TVI Express is one that is under serious investigation. According to Rod Cook of MLM Watchdog.com, it is a seriously flawed business model which is nothing short of an illegal pyramid. OK so it’s not fair to tar all similar companies with the same brush, but let’s take a look at what makes for a legal MLM set-up.
Front end commission is fine. This is the cash you earn from sponsoring a new team member. Many companies pay this. But the crucial thing is that it must not be the main source of income. If it is and there is little or no product sale, then you have a pyramid. In other words the money you earn is being generated from the sign up fee paid by new team members. The thrust of the business is to keep sponsoring. When that stops there is no cash in the pot to pay you. You don’t have true residual income.
PYXISM makes great play of the fact that they have no monthly autoship requirement for distributors, just a one-off payment of 349 $US to join. There is also the option to replace that single payment by making 6 product sales. But how realistic is that with the holiday products starting at 600-700 $US? Most people who come into the network marketing industry are not salesmen and are attracted by the fact that it is a referral business.
The 2×2 matrix offered by the company stresses that earnings come from the act of sponsoring and when recycling into another matrix, the cycle of ‘sponsor – earn – sponsor’ is perpetuated. At the higher ‘Horizon’ distributor level, you get paid a $1000 bonus simply for filling the matrix. It does sound attractive but how is it funded?
Take a look at the back end commission generated by the sale of product. Product sale is the foundation of any business – MLM or conventional. The way distributors build in our industry is different and few of us are sales oriented. But make no mistake; if there are no sales, there is no business. You must have a viable product that sells on a regular basis to build long term royalty income.
I recently read an article where the author said that travel products are much more attractive than the health and wellness products sold by many companies. One of his arguments was that in the present economic climate, most people will ditch their regular vitamins but they will still go on holiday. Maybe – but I would suggest that everyone has different priorities. For many, it is a priority to maintain good health for a small monthly outlay. Selling someone a travel package at around 700 – 1000 dollars may not be so easy.
The fact is that people do not buy holidays on a regular monthly basis. They go away once or twice a year. That does not make for regular turnover. Add to that the commission paid by PYXISM of 35$US on a travel package costing 770$US and I don’t think the deal is very attractive. On that sale you will earn 4.5 cents for every dollar spent by the customer. Compared to commission rates that pay out between 20 and 40 cents per dollar for some of the pills and potions deals, that is not much.
When you take a look at some of the websites of independent distributors, they try to give the organisation greater credence by trumpeting the company’s high rating with the Better Business Bureau. They have an ‘A’, and only ‘A+’ is better. The BBB is a USA based company which offers ratings to businesses. Especially if you live outside the US, you should understand the basis of the BBB. It is not government or independently funded, so it is not impartial. Companies pay a fee to be members and then they receive a rating. It is interesting that many highly rated companies are being sued or have had serious complaints upheld against them. Draw your own conclusion as to the value of a BBB rating.
Draw your own conclusions and decide for yourself whether you think this a good and ethical business opportunity. If you are thinking of joining, I urge you to do some very serious due diligence.
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Thanks for exposing the truth Charlie. Pyxism is just a TVI Express copy cat. Several top earners in that scam have already been arrested in China, Australia and USA. Is it worth the risk?
It's just ludicrous, some of the claims these guys put out there. People can't afford vitamins, so their going to go on a holiday instead! Or better yet, buy a $5,000 wealth education package, as one heavy hitter who shall remain nameless as said.
Great post, Charlie.
Wayne
I appreciate your courage in seeing this. It is not easy to lay things like this down but too many good people are having their dreams destroyed by such 'opportunities'.