The intent of this Shop To Earn review is to perform a 2009 update on the ShoptoEarn/ShoptoEarth business model, share my unfavorable experiences and those of friends/visitors to my blogs (favorable or unfavorable experience) and to revisit what’s changed at STE since my last posts in mid-2008. I was initially approached about joining Shop to Earn/Shop to Earth in 2008 and underwent some soul-searching and quickly decided it wasn’t for me. Loyal readers jumped all over me as well for even considering it. While I had a blog with a fair amount of traffic and an extensive social network which would have facilitated quick signups, I just didn’t feel like it was the right way for me to earn money and I passed. I actually lost sleep over the implications of signing people up for something that I didn’t believe in, and I also felt kind of skeevy trying to hype this thing to friends and family and just determined that it wasn’t for me. Some people can do it, I couldn’t. So, I passed.
Subsequently, I started thinking more about the business model and inherent flaws. My initial thought was, “Is Shop To Earn a Scam?” and while I wouldn’t classify ShopToEarn a Scam, several factors left a bad taste in my mouth. I did a post on Shop to Earn shortly following my decision and in it, I highlighted several red flags and concerns I had with the model, the way the program was being administered, the lack of transparency and legitimacy in the program, as well as findings from my contacts that were current members and my experience in calling in to teleconference/webex-type meetings. I was especially concerned over the mathematical quirk that I felt would lead to unbalanced legs and difficulties in achieving actual payments due to the way the pyramid was structured to favor more and more new members on the outer leg (of which you’re on the guy’s above you and above him, etc.). At the time, there was nothing in the way of an FAQ or actual examples as to what happens under different scenarios like a completely unbalanced left-right leg situation. Evidently, they’ve been explaining things in more detail since it seems like some of the commentors have more answers and actually agree on the mechanism of payment, etc.
Anyway, I posted my concerns, along with my thoughts on the junk that was being peddled through the Shop to Earth part, of which you had to spend $100 a month for things with little to no value to me personally. Therefore, breakeven was over $1000 a year, most of which coming from signing up new suckers. I quickly started receiving threatening cease and desist emails from the general counsel of Shop To Earn. While I had replied with multiple inquiries into what in my posts were actually deemed inaccurate or defamatory, rather than render a useful response or help set the record straight (as I always offer to immediately correct any errors or omissions), he just upped the ante with more aggressive legal threats. This is great…He actually demanded that I take down my entire website due to one article out of hundreds that discussed the STE business model. Talk about bullying tactics? I had a site with hundreds of posts and at the time, 1 dedicated to Shop to Earn – and he demanded that I relinquish the entire site – because he said so. I did get some legal advice which basically indicated that they had no case and no reasonable court would look favorably upon their tactics, but as I wasn’t really interested in a cyber-pissing match and covering multi-level marketing schemes isn’t a core theme for me, I ended up removing the majority of my analysis since it wasn’t worth the aggravation, but there’s no liability in me relaying historical fact here, as well as other independent data which can’t be misconstrued as “disparaging and libelous references to ShopToEarn”. (original cease and desist post)
2009 Update on ShopToEarn
As I had anticipated, there are evidently a few unhappy members who were unable to resolve their complaints with Shop To Earn and as such, the Better Business Bureau currently lists ShopToEarn as a big fat F. Now, granted, in reading the report, the number of complaints actually seems to be rather low and it isn’t clear what other criteria earned the F, but I’ve investigated multiple outfits before for various reasons and they’re usually either unrated or a C or better. This is the first time I’ve come across an F in something I was considering.
UPDATE 6/3/09 – A Reader pointed out that they are now rated a B-. At the time of initial publication, STE was an F.
Interest in STE Dwindling?
As I had also predicted, it appears as though interest in the Shop To Earn business model is dwindling. The way MLMs usually start up is a bunch of hype and cheerleading from initial members where they brag about making $10,000 a month, all the members in their downline, etc. The high member signup fees entice newly registered members to draw even more new members to the party and so on. What ultimately ends up happening is when the music stops, someone’s left standing. I don’t know when that is any more than the next guy, but for an independent analysis of keyword search trending for interest in ShopToEarn, I like to use this method via Google Trends to both guage consumer interest in a good or service and sometimes correlate that with stock market investments as outlined here.
Google Trends shows a pretty significant decline in the search for keywords related to ShoptoEarn.
As you can see, following the launch in mid-2008, the trend reached a peak of about 12.5 by fall and has since continued a downward trend, now less than 5.
Do you want to be on the downward slope of an MLM?
Comments are welcome. As I had done at EverydayFinance, I accept rational, objective and reasonable comments from both members and critics of Shop To Earn/Shop To Earth. I delete cheerleading and grandiose claims. There are plenty of outlets from members on that stuff; this is meant to be a legitimate dialogue on the business model to assist prospective members in determining whether this is an appropriate venture for them.
Bullying Tactics from Anonymous Shop To Earn Members
Based on the comment stream below, you’ll see several posts from members that are obviously being fed complete nonsense in some sort of forum or other higher-ups that are tracking any dissenting opinions on the internet. The claims are actually quite laughable. For your viewing pleasure, here are some of the claims and a factual rebuttal. I can’t fault an overly enthusiastic newbie who just drank the Kool-Aid for coming here and trying to defend the mother ship too much. I do question the motives and tactics of people who claim to be “website owners” in this wonderful new technology platform that can’t even articulate how Google Adsense ads are served up – they’re either ignorant or they’re lying – both of which are unfortunate.
This comment Thread – Comment #24 takes on some of the outrageous assertions out there about my blog, my motives and who knows what else. Topics span the notion of my trying to “bait and switch” people into some other MLM with ads elsewhere on the page (it’s called Google’s contextual ad placement of which I have no control – the ads only pop up because this is an MLM article – offended by the company you keep?) to… get this – an allegation (I don’t know if this is true or not, but it was posted here by an anti-Darwin commenter) that the Federal Authorities have been contacted in the context of banking licenses in an attempt to retaliate against me personally – will these people stop at nothing to quell dissent? Talk about desperation? And stupidity. Because some mortgage company bought some ad space on my blog, one of these baffoons thinks I need to have some sort of banking license? Try checking out “the internets” dude. Ads are everywhere. Do I need to own a car dealership to put a Honda ad on my site? My god, what is so damaging about my opinion that would force such retaliatory behavior?
To address doubts in the comment section from STE advocates over the validity of the data presented on the entry page Google Trends chart, I downloaded the raw data in both the Relative Scaling (top chart) and Fixed Scaling (bottom chart) and unless I’m missing something, I interpret this as a DECLINE in both relative and fixed search traffic for the term “shop to earn” through Google over the past several months. This to me, puts to rest any doubt over whether the search volume for “shop to earn” is accelerating or decelerating.
Now, the question is, “Does search traffic = Interest/Signups”? It is my opinion that there’s no reason aggregate human behavior changed over a few months from a) researching an MLM outfit on the internet before forking over hundreds of dollars up front plus the ongoing fees and commitments to b) deciding not to check it out on the internet and sign up with no further internet research. By the way, again last month, Google’s share of the U.S. search market increased as its growth outpaced that of the market overall, according to new statistics from Nielsen Online putting to rest any doubt over Google’s relevance.
If Online Shopping’s Your Thing…
Regardless of whether STE is right for you or not, you’re obviously doing a lot of spending with your credit card. If you’re not getting cash back for your purchases, you’re leaving money on the table. I rely on cash-back credit cards for as many expenses as I can and NEVER carry a balance (that’s the catch!). But, by doing so, we get back hundreds of dollars per year in tax-free income for doing nothing but carrying less cash around and exercising discipline. The Discover More Card is actually the 2008 Consumer Reports top cash back card and is worth checking out.
Additional Reading, if for nothing other than the shear entertainment value, and of course, points raised that I didn’t rehash here:
You All Disgust Me: Litigious Bastards
Tech Dirt: just-because-you-don’t-like-it,-doesn’t-mean-it’s-illegal dept
White Collar Fraud: STE Bullies Bloggers
Great Legal Marketing: Handling Criticism
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