* * * * *
The only people that get rich with “get-rich-quick” schemes are those that
are selling the “get-rich-quick” scheme.
> From: XXXXXXXXXXXX <XXXXXXXXXXXXXXXXXXXX>
> To:
[email protected]
> Subject: Chuck Stebbins
> Date: Mon, 6 May 2013 12:57:39 -0400
>
> Sean,
>
> Read your "Tampogo" article while researching Chuck Stebbins. Chuck is now
> with a company called XXXXXX XXXXX. Actually the name of the company is
> changing to XXXXXXXXXXX. XXXXXXXXXXXXXXXXXXX is the website.
>
> I've invested some money with this company and awaiting the next step. If
> you have any insight or interest in Chuck's new business, please let me
> know.
>
He's writing in reference to one [1] of [2] four [3] entries [4] about
Tampogo. I haven't really given it much thought since I wrote the articles
four years ago, and it's interesting to note that the company no longer
appears to be around (fancy that).
I can't find any connection between Chuck Stebbins and this “new” company,
which is selling an opportunity to sell some diet-aid product. It's not
coming across completely as a “multi-level marketing” scam, but some of the
numbers the introductory video is showing are misleading.
Okay, the thrust appears to be you “invest” $5,000, and in return you get 10
tablet computers (wouldn't surprise me if they wholesale around $60/piece)
for an “in-store interactive display”, 100 units of the diet product, and
some guides about [DELETED-shilling-DELETED] selling the product. You place
the “in-store interactive displays” in stores (nail salons, doctor offices,
car washes(?!)) and split the profits 50/50 with the store.
Okay, sounds straightforward to me. But here are some numbers the
introductory video is currently showing (not the full table, but enough to
show what's going on with the numbers):
Table: Small POP (Point of Presence) Reinvestment Model, $5,000 Investment, 50/50 with retail partner
Month 1 Month 2 Month 3
------------------------------
Reinvestment 12% 900 1,238
POP Units 10 14 19
Sales 15,000 20,625 28,359
Cost of POPs 240 2,400 900 1,238
Gross Income 7,500 10,313 14,180
Network Fee 50 500 688 945
Retail Partner 2,300 4,363 5,998
Your Gross 2,300 4,363 5,998
Labor Route Help 0 0 1,500
Your Net 2,300 4,363 4,498
Now, the “product” is $50 (okay, $49.95). Month 1 assumes the “starting
package,” that you place them all out on day 1, and 30 (or 28, 29, or 31)
days later. The numbers are largely consistent, although it helps to look at
things slightly differently:
Table: Month 1 revenue on 300 units sold (10 per POP)
Gross Income 15,000
Inventory -7,500
Network Fee -500
Cost of POPs -2,400
Retail Partner -2,300
Net Income 2,300
That makes it easier to see what is going where.
One issue already—the “starter pack” only comes with 100 units; that's still
200 units short of this projection, and so you need to spend (from what I can
determine using these numbers) another … um … $5,000 just to top of the
inventory (ouch) [this company also claims that the “starter pack” is worth
$11,495, but given the figures from this, it's actually worth around $7,500
unless they really expect the POP units to retail at around $500 a piece—in
any case, just looking at the numbers presented in their introductory video
just … yeah … not good].
But the real issue I have is with that 12% reinvestment. $900 is not 12% of
$2,300 (it's more like 40%!). No, that 12% is based off the gross income
minus the inventory (or $7,500). That's before all other expenses! Okay,
let's roll that in:
Table: Revised Month 1 revenue on 300 units sold (10 per POP)
Gross Income 15,000
Inventory -7,500
Network Fee -500
Cost of POPs -2,400
Retail Partner -2,300
“Reinvestment” -900
Net Income 1,400
Ouch. Okay, now let's look at month 2:
Table: Month 2 revenue on
Gross Income 20,625
Inventory -10,312
Network Fee -688
Cost of POPs -960
Retail Partner -4,333
“Reinvestment” -1,238
Net Income 3,095
And already the numbers are in trouble. Not only is that 12% “reinvestment”
pre-net, but it's not even enough to support the additional POPs—it's
actually $60 short! Also, the sales figure is bogus because I can't make it
come out to whole number of units and the number. In fact, the numbers for
months two and three are close but not quite right (averaging a bit under 30
units per POP per month).
And that 12% reinvestment figure is criminal, given how they've defined it,
and the cost of the POPs across the months is inconsistent (some months what
is listed is actually less that what it would really be; other months it's a
bit more).
But the biggest problem I see is the end-game. At the end of year 2, they
“show” you earning over $1,000,000 a year. But in order to get that, you need
to have 332 POPs. That's quite a feat, but maybe doable. But when you start
having two, three, ten, people all doing the same thing in the same area?
Um … good luck?
Really, all I'm doing here is applying basic math to the figures given. That,
and some common sense (which does seem to be in short supply these days) and
personally—this is a business I would give a pass on.
[1]
gopher://gopher.conman.org/0Phlog:2009/07/14.1
[2]
gopher://gopher.conman.org/0Phlog:2009/07/15.1
[3]
gopher://gopher.conman.org/0Phlog:2009/07/16.1
[4]
gopher://gopher.conman.org/0Phlog:2009/07/16.2
Email author at
[email protected]
