Trek Alliance: "Not Quite" Lies (cont'd)
With 40% discount, there's lots of profit.
Nope -- it's 40% off of the Commissionable Points which are lower, and the tax and shipping are figured on the full retail price. And they glossed over the fact that you place your initial order at only 20% discount, even if you are buying at the volume to qualify for 40% discount. Small details.
They said I make 20% of what the people I recruit sell, that's GREAT. You only make 20% of the Commissionable Point volume, (not sales) of orders from recruits who are at the Associate (lowest) level of the pay plan. As soon as they get promoted, you make only a few percent. 80-90% of the people sitting in a presentation don't grasp that distinction and the presenters know it. In reality, you're stuck in permanent recruiting mode to make a living. To keep income flowing, they have to recruit enough new people to cover the 97% attrition rate. To even get close to covering typical expenses, you have to sign 3-4 new people a week and get at least 4 people a month to place $2000+ orders. To get to that point, Trek trains you to schedule 10 appointments a day. Since a lot of people don't show up, you have to book 15-20 ppl a day, 5 days a week. To book 15 people, you have to have 20-25 people call you off of an ad, so that means you need to have at least 2 ads running in the newspaper or on the internet. That's why these "leaders" who are supposedly so rich work 60-70 hour weeks and barely see their families. And remember, no sick days. When you're down for a few days from one of the many colds and viruses that seem to proliferate in Trek affiliate offices, your paycheck for the month will reflect it.
But the training is what makes the difference. They are going to teach me how to make money.
No, the primary purpose of training is to get you to like the people and have a good feeling about the company. They want to fill you with warm fuzzies so you're comfortable with purchasing a lot of inventory. You're going to quit within a few months anyway, so they need to get your money right away before you start really asking intelligent questions they can't answer. The training programs are 48 hours of getting you to see that the only way to get rich is to jump in big and make the $4,000 purchase. Once you do that, they still push you to go to more trainings because every time you go it's another $250 in their pocket and you'll have an injection of "bonding" to the company that will keep you recruiting, keep you buying product for a few more weeks. It's all about putting you in front of "millionaires" and making you think that if they made it, so can you. If the transcripts of the Equinox hearings are any indication, most of the trainers are lying about their net incomes. The heartwarming fuzzy stories you hear at training are either completely fabricated or wildly exaggerated and "improved" to fit the purpose. You'll have a lot of fun because these people are excellent entertainers, but just remember that the purpose is to get you to fill out order forms and reassure other reps that spending all this money really is a good investment.
Because I'll own my own business, the tax benefits will more than make up for the investment in inventory, right?
Much of the tax "advice" given in the offices will get you in trouble with the IRS. And having really high expenses doesn't help you if there's not enough cash to pay your bills. Your sponsor has been carefully trained to make sure that negative information doesn't "click" until the get-rich dream has fully taken hold in your brain. They don't want you to realize up front that you have to pay to use the office. They haven't told you that you pay for your own phone line and you have to contribute to the snacks provided for office training meetings. You'll pay for your own recruiting ads -- a fulltime person spends $100-300 a week on advertising. You'll even be asked to help pay the airfare of the visiting execs who come in to rally morale and close new prospects. They don't tell you in the first meeting that you pay for all of your own samples, buy your own sample bottles, make your own sample labels. You buy all of your brochures and even the training booklets for reps you recruit. You'll pay for every fax and there's no toll-free number when you call headquarters to check on the unending problems with shipments and paperwork. You pay an inordinately high shipping charge (compare it with online companies) on the full retail amount of the sale. They charge tax on the shipping. You'll pay $400-500 out of pocket to drive to a training weekend once a month in an RV and stay in a room with 3-5 other people. If you refuse to go to monthly trainings and national advanced trainings, you'll be kicked out of the office and excluded from events.
But I'll be making 4-5K a month by my 3rd month, right? That will more than cover expenses.
Theoretically. If you're working the business fulltime, you'll have between $1,000-3,000 expenses. The problem is that the 4-5K check figure you hear constantly in Trek briefings and trainings is simply not the norm. They are careful not to lie outright, so the figures you heard in the testimonials at the front of the room were probably their best month check (NOT net income). What they don't tell you is that the vast majority of people working full time in the sales co-ops earn checks $600-$2,000 a month, so the good months subsidize red ink from bad months. Several of the people who told you how fabulous their business is growing didn't mention that they live with their parents and take the bus because they can't afford a car. Ask your sponsor for copies of his/her check stubs for the last 6 months. Do the same to anyone who gives you a "testimonial" about how successful they are. Ask for and read the income disclosure statement and ignore reps when they tell you the income disclosure is artificial because it includes part-time and inactive people. The figures on the income disclosure statement give very accurate measures. That's how the company defends itself against complaints of misleading income information. . . THEY TOLD YOU IN WRITING AND YOU IGNORED IT.
But I'll be able to "come and go as I please, set my own schedule."
Except that the office leaders determine the requirements for using the office. If you want their help, you'll be there for 2-3 briefings a day (1 pm and 7 pm), one weekend a month on the road at a training program, and most Saturdays. You'll be pressured to spend a LOT more time in the office than you thought.
But The People I Met Have Such Huge Sales Teams. With all those people selling for them, even just a little bit, business must be good.
Representatives count anyone who ever signed the form as a rep under them or anyone in their downline. Most of those new reps they signed never bought any product -- they found a website like this one or talked to someone who knew the whole truth and never came back. So it's perfectly common for a full-time person to have 200 people on their team, yet only have 3-6 people who are actively working the business. Everyone else quit.
