Thread: The Fusion Shopping Network

So what exactly is the difference between this and ebates other than ebates doesn't need 'affiliates' to do basically the same thing?

Originally Posted by legoman

I must say K CHANGE and Oz over at behind mlm give more of an intellectual analysis on Comp plans than you two. Your conclusions are quite ridiculous for this not being your first rodeo. Stick to programs who register off shore and hide there identity. Your wasting your time with Fusion Lynn.

First, K Chang and Oz have credibility, you don't. Second, I was just at behindMLM and went all the back to August and could not find the review you mentioned about FSN. Why is that? Please provide a link to the review at behindMLM as I really would love to read it.

I was speaking in comp plans in general. Saying it's a failure is a opinion lynn. Provide the failures in this comp plan and management can address the issues.

Originally Posted by Whip

So what exactly is the difference between this and ebates other than ebates doesn't need 'affiliates' to do basically the same thing?

But if you like, you can be an ebates affiliate.

* A "qualified referral" is a new member of Ebates referred by you that signs up at Ebates.com during the referral period starting January 1, 2014 and ending March 31, 2014 and that complies with the rules set forth below. If a qualified referral makes purchases totaling $25 or more that earn cash back within one year following signing up, Ebates will pay you $5 for each such qualified referral. Ebates will pay you an additional one-time bonus for the referral period if two (2) or more of your qualified referrals each make purchases totaling $25 or more that earn cash back before the end of the referral period. You will receive the highest one-time bonus for which you qualify in the table above. Your one-time bonus will be added to your Ebates account at the conclusion of this promotion. A qualified referral must be made using (i) your custom referral link, (ii) the invitation forms on this page or (iii) other methods supplied by Ebates that allow for proper tracking of referrals. The following activities are not permitted and will disqualify you from earning a referral bonus: (i) self-referral, (ii) posting your referral link on any Ebates merchant's Facebook or forum page, (iii) keyword bidding for the purpose of generating traffic to pages containing your referral link, and (iv) any similar activity determined by Ebates in its sole discretion to be inconsistent with the purpose of the Ebates Tell-A-Friend Program. Ebates decisions are final. You are responsible for any applicable taxes. This referral bonus promotion is open only to individuals who are legal residents of the fifty (50) United States, the District of Columbia or Puerto Rico and are at least eighteen (18) years of age.

Originally Posted by legoman

I was speaking in comp plans in general. Saying it's a failure is a opinion lynn. Provide the failures in this comp plan and management can address the issues.

As presented I don't think the comp plan is a problem. I don't know how well it will work but it doesn't seem to be illegal. I think the more significant question is the revenue stream. That can't be answered today but it is an issue.

Originally Posted by legoman

I was speaking in comp plans in general. Saying it's a failure is a opinion lynn. Provide the failures in this comp plan and management can address the issues.

I will wait for the review by Oz before discussing this further. I don't really care about "others" comp plans, only FSN and what Oz has to say about it. From what I have seen so far, I am not overly impressed and GD has stated it very adequately it remains to be seen since many things are still not disclosed.

Actually I will contact Rod Cook and have him give an analysis of the comp plan as you have presented it. Only one thing you should know is he hates matrix MLM programs, and he is one of the biggest supporters of the MLM industry there is; and he has written scores of comp plans for MLM companies.

Originally Posted by EagleOne

I will wait for the review by Oz before discussing this further. I don't really care about "others" comp plans, only FSN and what Oz has to say about it. From what I have seen so far, I am not overly impressed and GD has stated it very adequately it remains to be seen since many things are still not disclosed.

Actually I will contact Rod Cook and have him give an analysis of the comp plan as you have presented it. Only one thing you should know is he hates matrix MLM programs, and he is one of the biggest supporters of the MLM industry there is; and he has written scores of comp plans for MLM companies.

Lynn, i think this "MLM" is not worth of so much effort, and anything we are doing at this point is only contributing to their promotion,
specifically if you start pushing it for reviews to so called "MLM specialists" or to Oz

Fair enough Lynn. Believe me, I'm not into scams/ponzi, money games, whatever you call it. I'm on your guys side when it comes to helping expose programs who steal from people. The Company that help with the Comp plan is from a credible source ( the name escapes my memory )and has been in the industry for many years. Dr George only deals with top of the line companies with great integrity and honesty.

@Glim, revenue, bonuses, come from the sales of fusebucks. I believe this is in the complan. Thanks for your review.

Originally Posted by legoman

I must say K CHANGE and Oz over at behind mlm give more of an intellectual analysis on Comp plans than you two. Your conclusions are quite ridiculous for this not being your first rodeo. Stick to programs who register off shore and hide there identity. Your wasting your time with Fusion Lynn.

Hate to break it to ya, but almost everybody here is doing a much more intellectual analysis of your scheme than you are defending it! Oh, well, continue, the entertainment is priceless at least.

Originally Posted by NikSam

Lynn, i think this "MLM" is not worth of so much effort, and anything we are doing at this point is only contributing to their promotion,
specifically if you start pushing it for reviews to so called "MLM specialists" or to Oz

I appreciate your comments, but to be fair they need to have a fair review and who better than Oz and Rod Cook.

Something that legoman continues to overlook is: it does not make any difference if the comp plan is legal or not, it is the number of people they get to join. For those who do join the issue then becomes can they get enough "retail customers" to make the MLM legal? If they don't have 51% of their revenue from "retail sales," they are not a legal MLM, no matter how legal their comp plan.

Originally Posted by EagleOne

Actually I will contact Rod Cook and have him give an analysis of the comp plan as you have presented it. Only one thing you should know is he hates matrix MLM programs, and he is one of the biggest supporters of the MLM industry there is; and he has written scores of comp plans for MLM companies.

A short blurb by Mr. Cook on the subject:

The Matrix is really a bad pay to try to make money with It limits BOTH Width and Depth! In the long run the money that comes out of a Matrix is ½ of other MLM Pay Plans and it takes twice as much work.

The Binary and the Unilevel have become the major pay plans of growth MLM’s. Why? The Binary pays unlimited depth. The Uni-level pays unlimited width. They don’t fence in leaders and restrict income so they have won the titles of top growth and income pay plans.

Today there is only one major MLM company left that is a Matrix and that is Melaluca started in the late 1980’s all the rest died! There is Extreme Research that is an unlimited width matrix that is working. Those are the only two solid running matrixes out of 1000's come and gone (see list below) New Matrix companies live about 8 to 14 months and fade out. The Matrix is sold on “Spillover” and when the lazy people join looking for free handouts you have a “rotten wood” at the center core of the pay plan. In Europe there is one MLM Matrix telephone company surviving Tuscali, however if we look behind the scenes it just borrowed 150 million Euro for debt financing so we can’t say that it is too hot.

The “LAW” (Regulators) around the world hate the Matrix because it is used for about 80% of the scams on the Internet. It not only has a bad reputation, but any company using it makes themselves a target to be investigated by local and national governments. The UK Office of Fair trade just listed the “Matrix” itself as a Scam. Meaning that if it is a Matrix don’t join!

Link to Rod Cook's MLM Watchdog Website.

Originally Posted by EagleOne

I appreciate your comments, but to be fair they need to have a fair review and who better than Oz and Rod Cook.

Something that legoman continues to overlook is it does not make any difference if the comp plan is legal or not, it is the number of people they get to join. For those who do join the issue then becomes can they get enough "retail customers" to make the MLM legal? If they don't have 51% of their revenue from "retail sales," they are not a legal MLM, no matter how legal their comp plan.

They have no participants, no offers, no victims, not even started.
Therefore not gonna have much criticism exposed.

There is a specific category of MLM pimps who look specifically for this type - which got an exposure by a review and looks as a low risk (for the lack of real activity).
They constantly follow critics, and when there is not much really to talk about is great signal for them to jump on.

It will be a free promo for this MLM

Originally Posted by GlimDropper

Last I looked most major merchants offer some level of discount when you buy enough of their gift cards in bulk. Without any negotiations or agreements you can get $100K in WalMart cards for $95K. I am not suggesting that this is remotely close to how FSN conducts business but mention it for a sense of scale. I hope what ever relationships FSN has give them more than a 5% margin on sales and for sake of argument let's assume it's 10%.

Legoman, I sincerely hope you or the management team can address the economics of what Glimdropper presented above.

I am too much of a simpleton to do comp plans, and never enough of a people person to want any more of a team than necessary. Do likey numbers, and this is where I am sincerely not seeing how this gets pulled off.

Using Walmart as a model, according to the link they have a profit margin of 3.36%. At the most base level for every $100 in sales, $3.36 ends up on the bottom line. All accounting gimmickry aside this leaves very little wiggle beyond the discounts they are giving. WMT Key Statistics | Wal-Mart Stores, Inc. Common St Stock - Yahoo! Finance

As a business person, if I could buy $100,000 of gift cards for $95,000 and immediately sell them for $98,000 I would do that all day every day. Reality being what it is, anyone that can pay me $98,000 would soon cut me out of the mix entirely and pay $95,000 direct to Walmart. On the same front, I see no incentive to Walmart to give me 10% as they have their own infrastructure in place to drive sales. Somewhere the real number lies, 5% on the surface seems a reasonable working assumption for a discount on a bulk purchase.

This leaves me the option of breaking down the lot and selling retail. Let's call it 100 cards at $1000 a pop. Even operating in my little home office over the web, 2% transaction fees which seems generous leaves 3% to work with. 3 cards out of a 100 lost due to fraud and I am suddenly break even, before shipping, packing, bare bones office expense, and my time. That is just for me, never mind a team of affiliates, Fusion Bucks, and gas cards. If the economics don't work for a party of 1, adding volume to the mix does not suddenly move things to the black.

http://www.lpinnovations.com/page/86-gift_card_fraud/

This is simple back of the envelope math, would love to see in hard numbers how Fusion plans to accomplish what they claim will be available. Other than that it is all hope and promises that this will all work out.

Some of these profit margins are shockingly low, so I am wondering where the wiggle room is?

SBUX Key Statistics | Starbucks Corporation Stock - Yahoo! Finance
WFM Key Statistics | Whole Foods Market, Inc. Stock - Yahoo! Finance
COST Key Statistics | Costco Wholesale Corporation Stock - Yahoo! Finance
AMZN Key Statistics | Amazon.com, Inc. Stock - Yahoo! Finance
TGT Key Statistics | Target Corporation Common Stock Stock - Yahoo! Finance
ZLC Key Statistics | Zale Corporation Common Stock Stock - Yahoo! Finance
JOSB Key Statistics | Jos. A. Bank Clothiers, Inc. Stock - Yahoo! Finance

When SBM posted the snip from the letter of Frank and Cynthia, it began by saying, and I quote:

"We can take contributions. We can raise revenue through affordable donations from those who believe in our business model and our quest to create and nurture a long term MLM business that we can all be proud of for many years to come. This can quickly provide much if not all the money needed to keep gaining momentum towards launch."

Then later in the body of the letter it stated, and again I quote:

"But, in our case, Dr. George personally invested the funds needed to get our Company started and put all the pieces in place. He has “put the money where the mouth is.” It is now time to open the gates and get launched."

So which is it? Either he put in the money needed to get the company started, which by the way includes launched, or he didn't. These statements are contradictory to each other.

Another contradiction is this statement and I quote:

"If you take a chance and contribute to our company, your contribution will be used 100% to help get the company to launch as soon as possible. These funds will initially be held, and if we do not raise sufficient capital, your donation will be returned."

Now what is interesting in this statement is that it never says what the amount of the sufficient capital it will take. Somewhere this has to be disclosed to anyone who makes their contribution/donation. They must also provide an accounting to all who contribute/donate so they know the required capital has been received or not. One has to ask if anyone who has contributed/donated has ever received such information.

Also troubling is that throughout this entire letter, Frank George is referred to in the third person, yet this letter is supposed to be from him and Cynthia. I have no problem if Cynthia is the one who wrote the letter, but why have Frank's name on it if she did? Did she feel her own name was not credible enough to justify people accepting what was being said. If I put my name on a letter, I would certainly not talk about myself in the third person, even if it was co-written.

No doubt about it this is going to be fun to watch unfold and launch, if it launches.

Originally Posted by GlimDropper

But if you like, you can be an ebates affiliate.

Point is......you don't have to be to get deals. My neighbor does it all the time.

Originally Posted by Whip

Point is......you don't have to be to get deals. My neighbor does it all the time.

Very fair point, we don't know exactly what Fusion Shopping Network's business model will be it isn't like they are alone in offering shopping discounts / cash back offers or coupon codes. I had heard of Ebates but never checked them out before Whip mentioned them up thread. I'm not attempting to make any form of "apples to apples" comparison between them and FSN but a few things to jump out.

First, Ebates is a well established website. Alexa has them ranked in the top 2,000 websites globally and top 1,000 in the US. Suffice it to say that a very significant number of consumers use their service and that gives them some degree of leverage with their partner companies. Just a random and not representative sample of their offers:

	Adam & Eve Coupons & Cash Back	15.0%
	Addition Elle Coupons & Cash Back	2.0%
	adidas Coupons & Cash Back	3.5%
	Adorama Coupons & Cash Back	1.0%
	Adorama Pix Coupons & Cash Back	5.0%
	Advance Auto Parts Coupons & Cash Back	5.5%
	Advance Auto Parts In-Store Coupons Coupons & Cash Back	2.0%
	Aerie for American Eagle Coupons & Cash Back	2.0%
	Aeropostale Coupons & Cash Back	2.5%
	Affliction Coupons & Cash Back	2.5%
	AfterSchool.com Coupons & Cash Back	2.0%
	Agoda Coupons & Cash Back	3.0%
	AHAlife Coupons & Cash Back	5.5%
	AHAVA Coupons & Cash Back	6.0%
	Ahnu Coupons & Cash Back	4.0%
	Air and Water Coupons & Cash Back	2.5%
	Air France Coupons & Cash Back	1.0%
	AirportRentalCars Coupons & Cash Back	4.0%
	Airsoft Megastore Coupons & Cash Back	4.0%
	AJ Madison Coupons & Cash Back	2.0%

Now that's just their first 20 offers, listed alphabetically from a very long list. Including the 15% cash back offer from Adam & Eve (which seems like a loss leader) the average cash back for this list is 3.75%. I skimmed the entire list, there's a lot of specialty retail and services (hotels, restaurants) but what I don't see is much in the way of consumer staples (gas and groceries). I may have missed some, it's a very long list.

So a well established "discount sharing" service with a large user and partner base is offering, after their own profit margin, less than 5% in cash back offers to their users. I'm not saying that isn't a good deal but I am wondering if that might be about as good a deal as they can offer. Also, most of their partner companies are very much in the discretionary spending segment of the market, I love Omaha Steaks but without a discount I still buy most of my meat locally. I don't think it's necessarily follows that just because major grocery chains (Krogers, Safeway, Publix) or gas stations aren't making offers through Ebates, that they don't offer these kinds of deals but it does make me wonder.

I harp on things like groceries and gas because the savings margins are always going to be small so "save money on what you are going to buy anyway" really is the only way a company like FSN can work. There are gas and grocery entries in the shopping drop down list on the FSN website but so far none of those entries (or any of the others) have been populated. Time will tell.

I am not in any way an advocate for network marketing. I acknowledge that they can operate legally and some honest and ethical people can and do earn a respectable living in MLM. But it is an industry with a near pathological aversion to accountability and the ratio of people who've tried it and "wish they never had" to "glad they did" is shockingly high. In my humble opinion the key to legitimacy, and not just in the "well it isn't exactly illegal" meaning of the term is how likely is it for an entry level affiliate to make money entirely off of product sales and without recruiting any downline. If you need the income of more than one person (yourself) to better than break even in the opportunity that means the person (or persons) you needed income from will need to find their own people to help them better than break even and so on (in geometrically increasing numbers).

Freely admitting here that not all facts about FSN are yet in evidence and any or all of the following is subject to change but how many "Fusebucks" need to be sold to break even without a downline?

Base costs: $199 start up fee (which includes the first years compliance requirement) and $9.95/month (rounded down to $119/year) for the back office which is implied to be optional but wouldn't seem to be. So year one there's $318 in more or less mandatory fees. We'll call this $26.50/month and with compliance re-certification being only $39/year for the second and subsequent years those years run $158 or $13/month. Now that's a darned reasonable entry point from industry standards but FSN would seem to have extremely thin margins by industry standards as well.

Here is where some perhaps unwarranted assumptions start. Chief among these we're just going to guess at what percentage of face value FuseBuck purchases can potentially be paid to the field. I think it's generous to assume that for every $100 purchase $5 can be paid out in commissions but for sake of argument I want any errors on the high side of the mark so we're sticking with a potential 5% payout but will acknowledge the real number could potentially be significantly lower.

Now if 5% is the potential payout to the field that doesn't mean the person making the sale receives all of that. FSN has a somewhat needlessly complicated comp plan but there's no law against that. And again we're only looking at commissions from direct customer sales (and personal redemptions) to see what an affiliate may need to do to break even without income from a downline. There is an issue with this. FSN uses a computer autoplacement in the matrix portion of their pay plan and while I give them credit for not using the term or even advertising the concept of "spillover" in their materials it's possible for affiliates to be placed under you if you recruited them or not. So while this analysis excludes any downline income it's fair to say an affiliate may receive some even without recruiting.

OK, so without enrolling any affiliates it looks like the highest rank you can attain is Silver (the lowest). At this point you recieve 20% of your direct sales and 20% of your redeemed personal purchases. Again, I salute them for placing a practical anti-inventory loading provision on affiliate purchases. In addition to the basic 20% there are "milestone" bonuses worth an additional 5% at $500 Personal Retail Volume (PRV) and another 5% at 1,000 PRV. Which is good, you're going to need those extra percentages.

Again, the matrix autopopulates so in reality there is potential income there even without recruiting and I am by my own admission ignoring that income because it isn't exclusively tied to personal sales. Likewise the subsequent bonuses are also either tied to or predicated on recruiting affiliates so is outside the scope of this post.

So where does that leave us. Assuming 1,000 or above PRV per month the affiliate receives 20+5+5 or 30% of their direct sales (or personal redemptions). The comp plan does not make this clear and I'd recommend it be revised to do so but that 30% can't be on the face value of FuseBucks sold but rather on the portion of the company profit that is paid to the field. As stated above we're making the generous assumption that that number is as high as 5% of the face value of fusebucks sold so our Silver Affiliate is netting closer to (30% of 5%) 1.5% of the face value of fusebucks sold.

With an annualized cost per membership of $318 or $26.50/month (first year) and $158 or $13/month the second and subsequent years our Silver Affiliate needs about $1,766/month in direct fusebuck sales or personal redemptions the first year and $866/month* year two and beyond. And that is just to pay their membership costs before actually earning any money.



* The variable on the $866/month number is that it drops below the 1,000/month PRV threshold so lowers the total projected payout percentage to 1.25%. At that rate you'd need to sell $1,040 in Fusebucks to break even, which would return you to the 1,000+/month PRV threshold.



Is $1,766 worth of Fusebucks sold each month an impossible number? By no means. How likely is it for an average affiliate to generate that amount? That is the real question here isn't it? If FSN can honestly and legitimately save you money on the things that you were going to buy anyway it's very doable. If they can include discounts on daily necessities like food and gas this company can have a significant future. If they can only save you money on some range of discretionary online spending however, there will be significant problems.

If the average affiliate can at least break even in this or any other MLM company based only on their own personal product sales then it's a winner of a program. If you need people under you in the comp plan paying a portion up to you just for you to brake even then they will need people under them to do the same and so on. When this is true you have a situation where the only way to make money isn't by product sales but by membership sales and most members will be losing money. I sincerely hope this will not be true in FSN but sadly, it is very true in the industry as a whole.

Someone is paying attention to what is said here, as the link at MMG is now gone. Don't know if there was a thread at TG and all the other Ponzi boards, but if there were, they need to be removed too.

Originally Posted by GlimDropper

I'm not attempting to make any form of "apples to apples" comparison between them and FSN but a few things to jump out.

I harp on things like groceries and gas because the savings margins are always going to be small so "save money on what you are going to buy anyway" really is the only way a company like FSN can work. There are gas and grocery entries in the shopping drop down list on the FSN website but so far none of those entries (or any of the others) have been populated. Time will tell.

Apples to Apples or not your methodology is spot on IMO. I do hope someone from Fusion can shed some light.

On what you said about consumer stuff, I use a rewards card at a warehouse club as I do most of the family shopping there. At 2%, with gas, alcohol and tobacco excluded I usually end up with about $100 or enough to pay for the yearly membership. Through the years I have used some of the "cash back" credit cards to pay my bill. To a card, they have all started out generous and very quickly capped or cut benefits. The last started out at 2% on all purchases and then got gobbled up by BOA, it is a nice bump at the holidays, but certainly not what I would call a second income stream.

This was kind of a cool idea, and a very simple rewards model. PerkStreet, Rewards-Based Online Bank, Is Shutting Down - DailyFinance

As a consumer I would love to see something like this work, why not? Just seems there are still some very hard questions to be answered.

Oz over on his excellent BehindMLM blog has done an extensive review on the MLM aspects of the Fusion Shopping Network: Fusion Shopping Network Review: FuseBucks deals