Update: Yevo changed it’s compensation structure awhile ago which made it appear to be less like an MLM or a pyramid scheme. In a post on July 27, 2016, BehindMLM reveals that Yevo will shut down due to a “lack of success”. In my opinion, Yevo wasn’t viable without the MLM/pyramid scheme component. I don’t think people were interested in paying that $5.00 serving price for oatmeal.
Back in October, 2014 I wrote an article: How To Start a $500 Million Company the Easy Way. It was meant to be satire of the MLM/Pyramid schemes out there. I outlined how they worked and how you could pull off the same scam with misinformation.
So imagine my surprise when a friend wrote me the very next day saying, (paraphrased) “Did you see that Paul Myhill is starting a new MLM company?”
It turns out that this company is Yevo.
A Little Background on Paul Myhill and MLM
Previously readers could read more about Paul Myhill and LifeVantage, but this happened. Fortunately, he’s not very important in the Yevo story.
Enough of Paul Myhill, let’s talk Yevo
Yevo looks to be an attempt to bring a bunch of people who left LifeVantage back together. Yes, the people who pushed drinks through an MLM company called Zrii went an MLM, LifeVantage to sell pills, and have now moved on to a new MLM company, Yevo.
In my experience, this is what happens when the growth of recruiting new people into the pyramid stalls at one company. It really isn’t logically that the same group of people would go from one to another.
So let’s cover a few of these people. Unfortunately, because many of the top people at Yevo is
- Peter Castleman, Founder and Chairman of the Board – His claim to fame is being involved with Herbalife. Yes, the same Herbalife that is being investigated by every regulatory agency you can think of for being a pyramid scheme… FTC, SEC, DoJ, and FBI, check, check, check, check.
I guess they were unable to get someone from Enron or Madoff’s schemes?
Quite literally almost any other human on Earth would be a better choice. In fact, they’d have more credibility in my eyes if they named Curious George as Founder. As far as I can tell, he hasn’t been involved with anything even questionably a pyramid scheme. Maybe he turned down the job ;-).
- David Brown, CEO, Kirby Zenger, Chief Architect Officer, Gene Tipps, COO – They are all formerly from LifeVantage.
- Ben Seeman – Chief Sales Officer – Prior to LifeVantage he was associated with the pyramid company Metabolife with David Brown above. Here’s what Wikipedia says with citations about Metabolife:
Metabolife International, Inc., was a multi-level marketing company based in San Diego, California which manufactured dietary supplements. Metabolife’s best-selling product, an ephedra-based supplement called Metabolife 356, once generated hundreds of millions of dollars in annual sales. However, Metabolife 356 and other ephedra-containing supplements were linked to thousands of serious adverse events, including deaths, which caused the U.S. Food and Drug Administration (FDA) to ban the sale of ephedra-containing dietary supplements in 2004.
Subsequently, Metabolife’s founder was convicted of lying to the FDA and concealing evidence of ephedra’s dangers, and the company and its owner were both convicted of income tax evasion. A congressional investigation found that Metabolife had received thousands of reports of serious adverse events, many occurring in young and otherwise healthy people, and that Metabolife concealed the reports and acted with “indifference to the health of consumers.”
So Yevo’s management company has ties back to Herbalife and the stunningly illegal acts of harming consumers of Metabolife.
- Jason Domingo, Master Distributor – The term “master distributor” is given to someone at the top of the pyramid. This person gets partial credit for the sales of every other salesperson. If you were to describe a pyramid scheme a master distributor would be the guy at the top.
But What About Yevo’s Products?
One of their first products is oatmeal. It comes in at a wholesale price of $5.00 per serving.
A friend sent me this video showing just how ridiculous it is.
It’s true, you can buy the premium Nature’s Path Organic Oatmeal for around 50 cents a serving on Amazon.com (it’s even cheaper if you Subscribe and Save.)
So why pay ten times more than you have to?
Perhaps one of the reasons is that there’s deceptive marketing involved. For example, there are a number of results on Google pointing to marketers claiming: “But our oatmeal has 26 grams of protein (equivalent to a 16 ounce Rib-eye).”
Yet according to SparkPeople (and any other legitimate nutrition website) a 16-ounce Rib-eye has 79 grams of protein.
In this case, it isn’t just deceptive, it’s straight-out fraud.
And let’s not get into how it is easy it is to create processed foods with high protein… simply look at any protein bar. And let’s not get into how cheap rice protein is.
And then there’s the marketing of Yevo being part of the “trillion dollar food industry.” That’s the equivalent of putting on my son’s college application that his lemonade stand was part of the “trillion dollar beverage industry.” How much weight do you think that would have with admissions?
As my friend wrote me, “No legitimate business person would ever make such a ridiculous marketing claim. However, if your intention is to deceive people about a business opportunity it makes sense.”
Is Yevo a Pyramid Scheme?
There’s a great video about pyramid schemes from billionaire Bill Ackman’s company, Pershing Square:
When I watch that video, I see a lot of similarities with Yevo. However, let’s dig a little deeper:
Reviewing Yevo through the FTC Guidelines
For this section I’ll quote from the Federal Trade Commission’s advice on MLMs/pyramid schemes
“Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”
If you looking into run a legitimate business, you MUST ensure that you can sell a lot of the above product over your own wholesale cost to balance the amount of money that is made by recruiting. Thus far, all the marketing I’ve seen for Yevo by Yevo distributors has been around recruitment. In fact, they started recruited people before they even announced products.
Red flags do not get any more red than that.
“Many companies that market their products through distributors sell quality items at competitive prices. But some offer goods that are overpriced, have questionable merits, or are downright unsafe to use. Find out what will you be selling. Are similar products on the market? Is the product priced competitively?”
Well, clearly the products aren’t priced competitively.
The reason why this is important is because pyramid schemes use the lure of the business opportunity of recruiting others to get people buy their overpriced product that they normally wouldn’t if it was sold in their grocery store. In this case, it looks like Yevo makes at least $4.00 per serving than it would otherwise. Most of the money it pays to distributors goes to the top 1%.
The people at the bottom end could end up paying $1825 per year for oatmeal that would ordinarily cost them around $180 (using our example above). The end result is that the consumer at the bottom loses $1645 per year.
That’s a lot of money that could be spent on better health choices or even giving to charity to help others.
“Many of these “quick cures” are unproven, fraudulently marketed, and useless.”
The video covering the oatmeal that I linked to above covered one such deceptive practice. The marketing of the amount of protein compared to a rib-eye is another.
“Find — and study — the company’s track record…. Find out: how long the company has been in business”
Well Yevo has a soft launch in a few days, so there’s no company track record to speak of.
I’ve covered the individuals leading the company above and clearly their track record is horrendous.
Conclusion: I could probably go through the FTC document in more detail, but even before this company officially launched it’s managed to hit many of the FTC’s red flags.
Summing It All Up
Given the above information, I don’t how anyone can claim that Yevo is NOT a scam. Any one area should be enough of a red flag, but when there is evidence after evidence, the conclusion becomes clear to me.