Like Amway and many other direct-selling schemes, WorldVentures compensates its reps for sales made by people they recruit. It’s called multilevel marketing, or MLM, and it’s the legally sanctioned cousin to the pyramid scheme. You can sign up to get access to WorldVentures’ discounted trips, which are of arguable value, for a $199.99 sign-up fee on top of $26.99 a month. But wait—if you recruit just four people, your monthly fees are waived.
“Direct selling is the best-kept secret in the business world,” said Mr. Eggers, claiming to paraphrase Warren Buffett. Join WorldVentures as an “independent representative” for a $99.95 sign-up fee and $10.99 a month, and you’ll have the opportunity to make residual income through WorldVentures’ elaborate, cross-pollinating compensation plan.
WorldVentures says it pays out up to 65 percent of its sales revenue in compensation. There’s a direct commission, a weekly sales bonus and a monthly residual commission. Reps get paid a $20 commission for selling a basic membership to the travel club. But the easiest way to earn “mailbox money” is to recruit new reps.
The rapid-fire pitch made The Observer’s head feel fuzzy, so we sat down with the company’s 26-page compensation plan. WorldVentures has a virtually inscrutable payout schedule comprising seven ranks and two pyramid-shaped hierarchies. The first pyramid is called the “lineage.” You sit at the top and everyone you’ve personally recruited is added directly below you, and everyone they’ve recruited is below them, and so on. Lineage is factored into rank, which is factored into compensation. The second pyramid is the “binary organization.” Here the pyramid spreads out by twos—the top spot sits directly above a left and a right spot, each of which sits above its own pairs, and so on. You can then earn bonuses based on sales made by the binary organization, which is comprised of the reps you recruit, and the reps they recruit.
In order to start earning monthly commissions, a rep must be “30/30,” which means having 30 actively-involved customers and/or reps on each side of his or her binary organization. Reps who achieve this can earn up to $500 a month. The next level is 90/90, which can earn up to $2,000 a month. The top level, International Marketing Director, must have at least 3,000 people in his or her lineage, and must continue to average $56,250 in income in the three preceding months in order to maintain that rank. The list of requirements for each rank goes on for pages, with various exceptions and stipulations.
But multiple lawsuits have alleged that WorldVentures frequently bends its own rules in order to favor a small, elite group. According to one ongoing lawsuit, the top three spots onthe pyramid, which earn the most residual income, are owned by the two WorldVentures founders. The lawsuits claim that lucrative spots are given out as rewards to recruit “MLM superstars” like Matt Morris, author of The Unemployed Millionaire and founder of the distance learning MLM Success University.
The WorldVentures presentation in Williamsburg closed with nine reps who went up to the front of the room and described how they’d lifted themselves out of poverty, as if rising from their wheelchairs after a gulp of snake oil. “My name is Jay, I’m from Brooklyn. Bed-Stuy, Brooklyn. At first I thought it was a scam—I was doing scams, I thought it was a scam,” said one young man who claimed to be making mailbox money and driving a WorldVentures BMW. “When I saw that all I had to do was pop in a DVD and make money, I said ‘let’s do it.’”
WorldVentures reps do have the ability to earn residual income, get credit toward a BMW lease, and even a home bonus; but it’s much harder than the company makes it sound. MLM is a grind. When reps fail to make money, they’re taught to blame themselves. Reps are also heavily encouraged to spend their own money on WorldVentures’ myriad training events, which can range from $29 to hundreds of dollars to attend. WorldVentures has a tendency to sue its former employees who move to competing MLMs or speak negatively about the company, squashing public dissent; Google results for “is WorldVentures a scam” are overwhelmed with pro-WorldVentures websites and videos created by reps to give the appearance of legitimacy. “The reality is, it’s impossible for someone to realize the dreams that they’re pitching,” said one former high-level WorldVentures employee who asked not to be named. “The only people actually making money are the people the founders are manipulating the compensation plan for.”