Is Market America a scam? Is Shop.com a scam? Shop.com and Market America are both scams. Here’s why.
- 1 Summary of Market America Scam and Shop.com Scam
- 2 What is Market America and Shop.com?
- 3 Multi Level Marketing and Pyramid Scams
- 4 Shop.com Scam Recruiting Practices
- 5 Testimonial 1
- 6 Testimonial 2
Summary of Market America Scam and Shop.com Scam
I consider Market America and Shop.com scams because:
1) The main incentive is to recruit others instead of selling their overpriced products
2) I’ve met many of their “independent contractors” who unable to sell the crap products would buy it themselves to inflate sales numbers
3) They use cult-like practices to keep victims engaged.
What is Market America and Shop.com?
Market America Scam Explained
Market America is the latest and most sophisticated incarnation of multilevel marketing, that controversial business scam that exploits the get-rich-quick dreams of every red-blooded American. The basic scam is that members of Market America who want to become “Independent Distributors” or “Unfranchise Owners” (UFO) pay a fee for the right to sell products such as vitamins, makeup, herbal tonics and kitchenware. They also get the right to recruit other Independent Distributors (fellow victims). This upfront fee is part 1 of the Market America scam. Then there’s also the money they gain when victims sell their overpriced products, often to themselves. This is part 2 of the Market America scam.
People interested in becoming a Market America distributor pay a startup fee of $399 along with monthly payments of $129. Representatives, who are independent contractors, are also required to spend $130 to $300 on Market America products offered on Shop.com. Distributors are also required to attend seminars and training events, which cost between $20 and $200. Many people spend thousands on these seminars and other fees.
The founder and CEO is James Ridinger Jr. and is joined by wife Loren Ashley Ridinger. The rest of the executive leadership consists of her family members Marc Ashley and Steve Ashley. Why is there so many family members at the top? Because if you were running a scam, who would you trust to help run it?
Traditionally, they employed classical Multi Level Marketing or Pyramid Scam techniques. They would recruit salespeople, who would recruit sales people who would recruit sales people, and so forth. The sales people (or victims) would be offered a percentage of sales made and more importantly a percentage of sales their referrals make. This incentivizes sales people to recruit a “downline” of referrals to make money off their sales. Each sales person typically has sales quotas they need to make to stay in the system and earn commissions off their referrals. Since the products are so overpriced, sales people would purchase the company’s products to qualify.
Market America sells belief rather than product – SCAM
“JR’s great gift is, well, a lot of guys can sell stuff, but JR sells belief,” says his brother-in-law, Marc Ashley, Market America’s chief operating officer. “JR sells the idea that you too can be a great salesman. He sells that belief in yourself. Only the very top fraction of salesmen can do that.”
The goal of Market America and their shop.com platform isn’t to sell product. The reason shop.com is a scam is because the products are just a charade. Their senior management freely admits that their goal is to sell potential people into believing they too can be rich. This is pyramid scheme recruiting at its most basic.
Shop.com Scam Explained
Enter shop.com, their newest way to scam people into working for them. Market America likely wanted to differentiate themselves from the other Multi Level Marketing Scams and came up with this idea.
The Shop.com scam comprises of two parts. One, they sell the same overpriced products they did before but now online. Second, they refer potential visitors to other websites in exchange for referral commission.
Shop.com did the first part because it saw the movement towards online and internet usage was increasing. So by shifting the branding to an online presence, it could tell victims that they were investing in their own online “store”. Of course, this wasn’t even using their domain name and they didn’t own the platform so they weren’t investing in anything other than giving money to Market America.
The second part Shop.com did was set up referral links. It’s individual contractors would get visitors to their Shop.com webpage and when they click through to buy something from Wal-Mart or Macy’s, that individual contractor would get a commission. This allowed Shop.com to legitimize some part of their business since affiliate marketing, the practice of sending visitors to other websites in exchange for commission, is legit. This also allowed Shop.com to make money by taking a percentage of these commissions. For example, if a merchant was offering 15% of sales, Market America could offer 10% to the individual contractor (victim) and pocket the other 5%. What the independent contractors are usually unaware of is that they could directly partner with Wal-Mart, Dell, etc. and earn the entire commission themselves. More deviously, Market America representatives boast to others how they have these great partnerships with firms like Wal-Mart or Dell, when in reality anyone with a website can fill out a form with Wal-Mart and get even more commission.
Multi Level Marketing and Pyramid Scams
The Pyramid Scam Explained
Suppose someone at the bottom of the line spends $100 to buy an overpriced vitamin pill. The person who referred him gets $5, the person on top of him gets $3, the person on top of him gets $2, and the company gets $90. The pill itself may cost $5. So why would the bottom person pay $100 for a $5 pill? The person is brainwashed to believe that the pill is the best on the market but more importantly he needs to make sales quota to stay in the program and recruit more people. Nobody is dumb enough to pay $100 for a $5 pill so he has to buy it himself. Sounds like a weird scam, right?
Multi Level Marketing (MLM)
Multi Level Marketing is when the revenue of the MLM company is derived from a non-salaried “independent business owners” selling the company’s products/services, while the earnings of the participants is derived from a pyramid-shaped commission system. The participants, or “independent business owners”, are called “Unfranchise Owners (UFO)” by Market America.
Shop.com Scam Recruiting Practices
Market America uses shop.com as a cover to hide their real scam – selling you the belief that you could make it big if only you follow their instructions and fork over your money.
Quotes from Famous People
Market America will use quotes from famous people to lend credibility about their business.
For example, they’ll say “Do you know Bill Gates? He’s a billionaire. Bill Gates said that all businesses will be online businesses”. Bill Gates naturally never endorsed the Shop.com scam. However when people think of Bill Gates and how credible he is, psychologically people lend some of that credibility to what the topic of conversation was. In this case, the topic being the Shop.com scam.
The problem was, MLM’s are not set up for legitimate business, so in order to make commissions like a sales rep, I needed to recruit a team of people buying hundreds of dollars worth of product, while balancing out both sides of the payment structure (a near impossibility) to earn the commissions from my decent sales at the salon. In other words, I was working for free most of that year for the salon (hosting beauty events, spending 3 days a week in the salon promoting it to their customers). I finally approached the salon owner and took a makeup artist position with them in order to make any money at all. I did receive 2 paychecks from Market America which didn’t even cover the start-up costs of getting into the business that year.
Sadly, my salon forgot to make a purchase ($100-$300 required monthly on average) on time from Motives and they refused to send her her $600 commission check. She was furious and guess who ended up looking ridiculous? After running the numbers at the salon, she was break even on profits even though we had sold a TON of products (maybe 10-15K). In order to earn her “commissions” on all that she had sold to her clientele, she had to have a team underneath her–which was a nightmare to deal with if you are running a legitimate business.
After a year in the business, I made at most $450. I went to ALL the seminars, listened to ALL the audios, and spoke to ALL my friends about it. I recently had to go through my whole contact book and apologize to all the damage that I created with this business. I had to really get out of the hole I dug for myself with this business.
Market America makes money off their sales seminar and their “distributors” buying the products in order to stay active.