Arun is Bringing You...Your Daily Remedy

Tuesday, September 16, 2008

YTB: To Join or Not To Join?


Recently (the last couple of years) I've noticed a surge in people I know getting involved with YTB. In fact, in my last post, I got two comments requesting that I do a little ditty on YTB.

For those of you who are clueless as to what I'm talking about, YTB stands for "Your Travel Business." Basically the way it works is that you pay $500 plus $50 a month afterward, and you get an already designed webpage that acts like Travelocity, Expedia, Orbitz, or any other online travel agent. That's right, you basically become a travel agent. Also, when you sign up, you basically do so "under" whomever you heard about YTB from, by going to their travel page, signing up, and paying up.

I'm going to give you an unbiased yet personal view of YTB (and similar companies like Traverus, or World Ventures etc). They all operate pretty much the same with slight differences in sign up fees, compensation plans etc.

So for the last year, a friend of mine has been telling me all about how great YTB is. He's signed up and has been trying to convince me to. I've resisted because I'm a natural skeptic of a plan that is "too good to be true." Also, he's not quite making beaucoup bucks yet, so I had no tangible proof that it's legit.

Then, to satisfy him, I spoke with his "mentor," (the guy he signed up under) a ridiculously rich and successful guy named Maurice Maio and he was pretty convincing...but he also came off as "sales-ey" and since we only spoke briefly, I dismissed the idea of going to a seminar.

Recently though, my friend Heather decided to join YTB full boar, and invited me over to her place for a going away/YTB presentation party (very clever to combine the two) where her "mentor," another ridiculously successful person named Sabrina Dagostino did a full presentation on YTB. Obviously, I was skeptical.

After leaving Heather's house though, I was seriously ready to sign up.

Sabrina is an extremely compelling speaker and it's obvious why she's done well. In the presentation she outlined all of the great benefits in joining YTB:

- As a travel agent, you get free upgrades on travel and hotel.
- Owning your own business means you can write off tons of things for taxes (gas, eating out, etc)
- When people book travel through your site (which is marketed to be as cheap or cheaper than expedia), you make a commission
- When people sign up under you, you make a commission
- Any money that the people under you (and the people under them) make, you get a cut of.

Sounds amazing doesn't it!?! Again it was a very compelling presentation, and my knee-jerk, in-the-moment reaction was, "Where do I sign up!?!"

Luckily, I'm a rational, think-stuff-through-and-research type of person.

First of all, let's think about the presentation. Why is she doing a FREE presentation? Well, it's because anyone who signs up under Heather, is money in the bank for both of them!

Cha-ching!

And if you're thinking this is a pyramid scheme, you'd be essentially right. In her presentation, Sabrina mentioned multiple times that Pyramid schemes are illegal (she's an attorney which added to her credibility), and that YTB is not a pyramid.

Well, if I made a Peach Pie with Nectarines instead, sure it wouldn't be a peach pie, but it sure would taste, smell, and do everything pretty close to what a normal peach pie would do. It may not be "technically" a pyramid scheme, but it damn sure acts like one.

In the presentation, it sounds like you'll be making EASY money for the rest of your life! Well if it was so easy, then why is it that something like 94% of YTB agents make less than $90 per year? (By the way, some of my numbers might be slightly off since I didn't write any of my research down, but they are pretty close).

Another interesting statistic is that only about 14% or YTB's total revenue comes from booking travel. Pretty astounding for a travel business, eh? So where does the rest of the revenue come from? Well 72% of it comes from sign up fees and monthly dues! Hmmm....smells like a peach pie to me.

So in order to make any serious money (or even semi-serious money) you can't really rely on booking travel, unless you book a TON of it. People aren't going to find your webpage on google since there's about 200,000 other YTB travel pages (unless you get tons of people to shamelessly link to you). You might be able to convince your family or friends to book through you, but if you're like me, you like to check a few different websites to get the best deal. I usually check a few (including a friends YTB page), and although they're competitive, I can usually find cheaper rates elsewhere.

That means if I want to make the dough, I need to get people to sign up. This is the biggest problem for me.

I hate salespeople. Actually, I don't hate salespeople, but I really dislike people who try and sell something to you, be it a car, a religion, or a travel business, as if they are just looking out for your well being. Nope. I'm personally a super social person and get along well with everybody, but I would hate to start telling my friends about my travel business to get them to sign up.

Hell, even if it's people I don't know, I find it totally disingenuous to talk about something where their participation nets you a commission.

I suppose it wouldn't be so bad if it was MY company or product (ie the ebook I'm releasing pretty soon), but peddling someone else's product just to make yourself money isn't my cup-o-tea not what I think of as a positive social interaction.

Hell, even with my book, I might mention it in conversation, but I wouldn't try to sell it to anyone I'm socializing with. I'm going to sell it via online marketing. You might see an ad, click on it to get information, and if you like it, you can buy it.

BUT, I wouldn't call YTB a scam by any means. You know EXACTLY what you're financial risk is when you get involved, and in all fairness, it's not that much. What is a little misleading, is how easy they make it seem to get rich. It's not. To make money, you need to really sell the product to people. But as far as I can tell, nothing they claim about the compensation you are awarded is false.

At the end of Sabrina's presentation, I remember she said something like, "you have an option now to change your life. In one year, you can be in the same place you are now, or you can make a change that will affect the rest of your life." Convincing indeed. But you have to keep in mind that 94% of us are not going to be any different except maybe a few hundred bucks in the hole, but we WILL be contributing to her retirement fund! That's not a knock on her, but she's not doing this presentation to change YOUR life...she's doing it to enhance hers.

If I were to sign up, I'd probably give a similar presentation. In fact, she, like other mentors, WANT you to succeed. It behooves them financially if you do well, so they offer all types of free coaching. But, as I mentioned before, it takes a very particular personality type to succeed.

If I were to sign up, I might reap some tax benefits, and travel benefits, but it wouldn't offset the amount of money invested. (Although, once you get six people signed up under you, the $50/month fee is waived. But, again, you have to SELL six people your business plan)

Sabrina Dagostino has enough people signed up under her, where now, she can travel doing presentations, getting people to sign up under her understudies, and add to her riches. She's good at what she does.

It's certainly not impossible to make a lot of money through YTB, but it's very tough. You need to have a charismatic personality and be willing to talk about your travel company all the time. I actually think I could make pretty good money by joining YTB. I'm social, love giving presentations, and have been told I'm charismatic, but I'd be selling myself out.

When I worked at Tennis Warehouse, we used to get incentives if our order averages were high (dollars spent per order). They never encouraged us to try and "sell" stuff to people, but rather to inform them of the special deals that are available with they're order (essentially a "win-win" since the customer gets a special deal available only with that particular order, and Tennis Warehouse makes a slightly higher sale).

However, many times I was tempted by people calling wanting to get the "latest and greatest" racket technology to start playing tennis. Now I could have sold them a $300 racket, and they would've been happy to get the newest and best! Plus, my order average would've gone way up. But, I couldn't do it. I usually convinced them to get an older yet comparable model for like $60 because, in all honesty, as a beginner they wouldn't feel the difference. Sure my order average tanked, but the customer always appreciated my honesty, and I felt a lot better about being so.

Similarly, this blog is popular enough where I could start writing sponsored posts on different products for money on here, but if you saw my monthly earnings in my adsense account, you'd realize I don't write this for money. I'm not willing to dilute my amazingly insightful content :) with review drivel, just for money.

I'm also not willing to sacrifice my genuineness and social freedom, to make a buck.

I suppose I could join YTB, write a post on how awesome it is and why you should join, then put a link up to my YTB page so you can sign up under me and make me rich!

I am curious though to here about people who have signed up and had a lot of success, like Maurice Maio or Sabrina Dagostino. I suspect you're few and far between. If you'd like to convince me to sign up, give me six understudies (since I don't want to "sell" the business myself, nor do I want to pay the monthly fee), and I'll see how it goes, and write an honest first hand review. In fact, if I knew six people who really, legitimately wanted to get involved in this type of plan, knowing how difficult it is and all of the sales aspects, I'd probably sign up and have them under me. But I'm not going to "sell" it to people.

In the meantime though, I have no interest in joining. Hopefully you can make an informed decision as well. And if you think I'm wrong, feel free to let me know about it! (although, really...am I EVER wrong? :)

12 comments:

Mark said...

Your grammar needs work:

> You know EXACTLY what you're financial risk is when you get involved...
your

> I am curious though to here about people who have signed up...
hear

You know that I'm not the grammar police, but I hope you hire an editor for your ebook. (Or at least have a critical person read it for you.)

Other than those, great post. I had never heard of YTB before and from the sound of it I'm glad that you are smart enough to stay away. I would hate to stop reading your blog because you became too preachy.

firemedic227 said...

Fair assessment other than a couple of things.

The concept behind networking is to leverage your efforts with the efforts of others. With that being the case you must be able to build and maintain relationships. If you cannot then you need to work on your personality first. If you don't truly care about people and truly care about their success, then you will most likely fail. Heck, that really goes for about everything in life. People can tell when you are not truly sincere. If are always focused on yourself then yourself is mostly what you will get.

Your comment about not liking to be sold is interesting. Funny how we don't like to be sold to but we like to buy. This too comes back to whether or not someone really cares about the customer or just themselves.

The failure/quitting/nonperforming rate amongst the networking industry is the same as that in EVERY industry. As humans we fail at about 95% of everything new we try. Diets, workout programs, relationships, new projects, sports.... The 80/20 rule is no different for networking as it is for any other industry. Over 80% of new realtors never sell a house but they invest quite a bit more to get started.

Many people will get started in a networking business and they won't do anything, therefore they don't get paid anything. I believe it to be the fairest industry in the world in that it doesn't matter what your race, education, religion, family, age,sex... If you do "A" you get paid "B". Period. It has absolutely nothing to do with odds since it is purely based on performance.

I think one of the biggest reasons people quit and don't take the business seriously is because of the low start up cost and low overhead. They fail to take it as serious as a business where more is invested.

I liked your article but I wouldn't actually call it unbiased. Pretty fair coming from someone who doesn't seem to understand much about the industry as a whole but still okay. We all are biased usually in one way or another in just about everything.

Brendan said...

Thanks really enjoyed the post!

Arun said...

@firemedic:
You make a lot of good points. I do disagree with point about "if you don't truly care about people, then you will most likely fail."

I think I DO truely care about people which is exactly why I would have a problem trying to get them into the YTB system. I couldn't hook them in if I KNEW most of them would fail.

That being said, I suppose if I truly believed in the value that YTB is offering, then the benefit to getting other people involved is two-fold. I make money, and they have the potential to make money.

Again, the biggest problem I have is having to comprimise my normal social interactions by talking about "my company" and having to be a salesperson.

firemedic227 said...

I understand what you are saying Arun. If I truly didn't believe in my product or my opportunity I would feel the same way.

Because I took the time to meet the principles of the company, met the leaders, read the pro's and cons before I got involved, I was able to get started without feeling the way you described. I met the founders face to face. I feel I am a good judge of character and that is what sold me. Truly men of character.

As far as the failure rate...YOU can't decide who fails and who succeeds. THEY get to chose that. I mean, the people that teach people how to sell real estate: How can they do that knowing that 80% will never sell a house! And they will pay a lot more to get that license.

Like I said before, we fail at about 95% of everything we ever try. But WE get to chose what things we want to be successful at. Networking is no different. It's not based on odds so one can't say "the odds are against you". Because it's soley based on performance, the individual gets to decide. I believe that is the fairest system out there.

John said...

Very fair analysis and I likely will include an excerpt in my blog later this week.

One thing you failed to mention was all of the pending legal actions against YTB that likely will shut them down. The California AG has filed a $25M suit alleging they are an illegal pyramid scheme, and there are at least two class action suits in excess of $100M filed against them. In addition there are several smaller suits filed by individuals.

The stock has taken a beating, and one of their Board members has resigned because he felt the Board was too heavy on insiders and that it was moving in a bad direction.

I also imagine that there are other investigations underway at this point--likely the SEC and the FTC, but possibly the IRS as well for the tax advice they are offering to their members regarding deductions.

firemedic said...

Arun, you now have caught the attention of a small group of people that call call themselves "Professional Travel Agents". They are absolutely OBSESSED with the bringing down of YTB. They spend day and night looking for any dirt they can come up with on YTB or any other travel mlm they can. They mainly focus on YTB. They think they know what is going on with the company but most of them have never taken the time to really get to know any of the founders. They will publish slander and say just about anything for their cause. (Just like the politcal candidates do. Look for the negative and inflate it, don't even think about the positive). John, here, is really a great tabloid writer. He has a daily blog about his obsession. Like the rest of this small band of TTA's (traditional travel agents), John is bitter. They are bitter about anyone that sells travel different than them. In the end, they will make very little difference other than making the competition more resolute.


So get ready. You will read a bunch of dung coming from these guys all wrapped up in a package that seems informed and articulate. When in fact, it's just plain ignorant and bitter.

I encourage you to watch the video on YouTube by TruthandTravel called "Bad Press Sells".

I do commend you on your fair opinion even though it wasn't for you.

Arun said...

firemedic: I know I'm one of the few who is not strongly for or against the business of YTB. From my research and encounters with people, it seems people are either Gung-ho YTB reps, or totally against it.

I did read about a lawsuit or two involving YTB, as well as YTB losing its IATAN accreditation (does this matter?)

In defense of YTB, I haven't heard or read of ANY cases where people joined and found out it was a scam and lost lots of money. I suspect it's because, as I mentioned in the post, YTB is upfront about your financial risk and potential rewards. Most people fall under the charm of the rep who they sign up under and don't realize the hard work they have to put in.

You know what you're getting into. Success in YTB hinges on your efforts. The type of person who does well though, is not who I want to be.

Anonymous said...

And if you're thinking this is a pyramid scheme, you'd be essentially right.

You say that you are a research oriented person, so I will simply ask a question pertaining to "pyramid schemes" whether legal or not. Do you know what a pyramid scheme is? If not, I will give you a very specific explanation which you obviously have never heard before and most people today have never heard that is derived from decades ago definitions created by AG's all over to help define illegal P Schemes from illegal P Schemes. Email me at b@pittmancenter.net if you like.

Thanks,
Ben Pittman
Pawleys Island, SC

Steve Mencik said...

Arun,

If you really want to get into the travel business without all the recruitment angles, there are what are known as "Host Agencies" that will allow you to work as an Independent Contractor. Instead of the 60/40 commission split, you typically get a 70/30 or even 80/20 split. Some of these have no monthy or yearly fees and even give you a website powered by the same booking engine as powers the YTB sites. Even the website is free. So, given that those exist, why would you join YTB except for the potential pyramid-like recruiting bonuses. If you'd like info on host agencies, feel free to contact me, or see this post and the comments to it. There is a comment that gives some URL's where you can find reputable Host Agencies.

Anonymous said...

Firemedic is dead set against anything a genuine, real, legit travel agent says. Once involved in an MLM scam, always involved. The guy is on every blog spamming his own pro-YTB site. I am not certain, but I don't think he is a medic, a fireman, or anything other than a blogger. Don't they call those type of people TROLLS?

YTB is a bad business and a bad company run by bad management and known scammers. Coach is not God but the YTB people think he is. That is why a lot of MLMs are known as being like cults.

My advice to Firemedic and the likes is to find a real job. Not only will you feel better but your friends and family will respect you.

YTB has several lawsuits against it and has lost IATAN. That isn't because someone is picking on them. It is a pyramid scam than is finally crashing.

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