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Multi-level Marketing Madness

August 24, 2022

There is a relatively new Multi-level marketing (MLM) company starting called Elomir. It has only recently launched which gives us the unique ability to watch the destruction and manipulation starting from the ground floor.

What does Elomir do?

The company developed a mouth strip (sort of like a Listerine strip) that you put on your tongue and it dissolves. Its “diffusion technology” apparently means you absorb vastly more nutrients then you would if you ingested those ingredients any other way. The ingredients are vitamin B1, turmeric, and NAC (which is the supplement form of cysteine, which the body produces naturally and turns into glutathione, an antioxidant). So you get some vitamin B, some turmeric, and some antioxidants. But when you use their mouth strips diffusion technology, the results are OuT oF tHiS wOrlD!!!

Take a read through some testimonials I found online. It’s amazing how varied these accounts are. We have reports of eliminating knee pain, reduced anxiety, increased smiling, an urge to vacuum, reduced road rage, a smaller appetite, a loss of desire for caffeine, and a sensation of being hugged. Amazing! I’ll get into this later, but it’s important to note when reading, that the only people who had been allowed to purchase this product at the time of writing these testimonials were brand partners, which are the people who have joined Elomir in an effort to make money from selling the product. So these are not unbiased reviews.

Though the results vary greatly, I have also seen cases of exactly the same result from two unique testimonials. What a strange coincidence. These ladies even use the same emoji’s! They should be friends in real life.

I watched a video on Facebook where a guy said he went to Lowes to look at plants after taking the strip, and he said with tears in his eyes that the colours of the flowers were brighter. Is Elomir just LSD? You expect me to believe that turmeric and vitamin B makes colours more vibrant, on top of the huge list of other things we listed above? I stumbled on the same guy in a separate video that was talking through the “opportunities” at Elomir. Since he wants to be a brand partner, he has a lot of incentive to hype up the results of the product. In yet another video I found of him, he says he is a physician. I wonder if there is a conflict of interest with a physician recommending a product that they earn commission on?

Below is Elomir’s first official YouTube video which is entitled “Why Elomir”. The title makes you think that you will hear about the claims of the product, and why they should be believed. Instead we get an obnoxiously hyper “CEO” telling us the random story of how and why she started the company and vaguely references the fact that this product is going to change peoples lives, but of course doesn’t say how. She says near the end that she will pass it off to others to explain what the ingredients of the product is and give more detail, but the video cuts off, and there is no follow up. There are no other videos on the channel that explain the ingredients of the product or what it officially claims to do.

The website provides a fact sheet on the product and lists some of the supposed benefits, though they seem intentionally broad and vague, possibly so it could attempt to cover the massive range of these testimonials.

Note that the product is not FDA approved, or even reviewed.

The Founders

The founders of Elomir are Van and Toan Nguyen. Both are longstanding MLM employees. Toan is also involved in a crypto and NFT business, which appears to operate like an MLM, and many have suggested is a ponzi scheme. I also saw some people suggest Toan is under investigation from the FBI for his crypto business. I haven’t been able to officially verify this on a site that seemed trustworthy though, so I will just provide some links I found. Link 1. Link 2. Link 3. There is also a bunch of chatter about it on social media.

How is Elomir structured?

I won’t keep you in suspense. It’s shaped like a pyramid.

The company publicly launched in July 2022. Prior to that, they have been building its base of “brand partners” who buy the product from Elomir in order to supposedly sell the product to customers. But there are more incentives to earn by adding brand partners then there are for selling product. So most people are primarily incentivized to recruit for their downline. A requirement to join as a brand partner is to purchase the product for $75, plus an annual enrolment fee of $50. Most leaders encourage their team to sign up for the three pack though because it gives you more product to sell. The three pack costs $250, and the enrolment fee is waived.

Below is an overview of their compensation plan. As with all the MLM’s I have come across, it is overly complex. There are five ways to earn money at Elomir. The first is to sell the product. The other four involve recruiting people under you.

Compensation plan

The reps on zoom videos who explain this compensation plan always say it is so transparent and easy to understand. Now, I don’t want to brag, but I am literally a finance/accounting professional and I have no idea how I earn money with Elomir after reading this plan.

The easiest part of the compensation plan to understand should be part one, which says that you get some commission on all sales you make. However, even this section is not clear.

The plan says that I get 35% of the “CV” of every order I sell. I had to go to the glossary to learn what a CV is. They define CV as “Commissionable Volume, this volume is assigned to a product.” But this definition still gives me no information on what my earning potential is. What is the CV assigned to a product? If the product is $90, is the CV $90? Or is it $50? What amount do I get 35% of? I was only able to learn how much I could earn by emailing their support team directly. I learned that one box is worth 45CV, so I would earn $15.75 in commission off of it.

So far (as of Aug 11th writing), all of Elomir’s sales have been to people who want to be sellers for the company, it hasn’t made any sales to people who simply want the product and don’t want to join the company as a brand partner. The site currently shows “sold out” for purchases. Of course, there is a huge amount of internal hype at the sales volume. I have heard several times from people within the company that this is the biggest launch in network marketing ever.

“We’ve sold this many before launching y’all, can you believe how many we will sell once we launch to the public?!!?!”

These types of posts give potential brand partners and people who are looking for an opportunity to earn extra money the impression that the product is in high demand, and once retail sales are allowed, the floodgates will be open and money will pour in. I believe it is manipulative and predatory.

I think it is much more likely that most of the demand for this product is confined to the brand partners. These sales reps have an incentive to hype up the product as much as possible. The hype isn’t even necessarily to sell the product, but to add people to their downline. As we see in the compensation plan, most of the earning potential is tied up in recruiting people, not in selling the strips.

Below is a video giving us an overview of the amazing opportunity at Elomir. Jessica (highlighted green) tells everyone how blessed they are for the opportunity and that the earlier they get in, the better. Jessica educates the team of the five ways you can earn as a seller. She spends exactly thirteen seconds on the first way, (actually selling the product) and the rest of the time is spent hyping up the earning potential of recruiting people. At one point, around seventeen minutes in, while telling everyone how great the opportunity is, Jessica says that everyone on this call will probably have 5,000 people under them. There is a maximum of three people allowed under each person, and bonuses are paid when a new leg under you forms (once the three people is full, a new leg forms, and three people go under those people, all the way down). So Jessica says the earlier you start, the more likely you will experience “spillage”, ie – new legs forming under you, which earns you money.

Thought experiment. Assuming the twenty people on this call are the very top of the pyramid, which they are clearly not. Jessica is above them, and the CEO is above Jessica, so there are at least two legs above them already. But for simplicity, assume these are the first twenty people. If all twenty people recruit three others, then the sixty recruit 180, and so on, Elomir could only support eighteen tiers of people before it surpasses the world population. Assuming everyone is told they will have 5,000 people under them, Elomir could only support ten tiers before every person on earth would have to be buying the product.

In a video hosted by a rep on July 4th, 2022, the rep told her team that she learned from her CEO that morning that: “There are going to be no customer orders allowed at this point. When the site goes live publicly on the 6th, it will show, and only shows right now on the site… sold out”.

This is interesting because, according to the SEC, a pyramid scheme typically displays the following traits:

When considering joining an MLM program, beware of these hallmarks of a pyramid scheme:

  • No genuine product or service. MLM programs involve selling a genuine product or service to people who are not in the program. Exercise caution if there is no underlying product or service being sold to others, or if what is being sold is speculative or appears inappropriately priced.
  • Promises of high returns in a short time period. Be leery of pitches for exponential returns and “get rich quick” claims. High returns and fast cash in an MLM program may suggest that commissions are being paid out of money from new recruits rather than revenue generated by product sales.
  • Easy money or passive income. Be wary if you are offered compensation in exchange for little work such as making payments, recruiting others, and placing advertisements.
  • No demonstrated revenue from retail sales. Ask to see documents, such as financial statements audited by a certified public accountant (CPA), showing that the MLM company generates revenue from selling its products or services to people outside the program.
  • Buy-in required. The goal of an MLM program is to sell products. Be careful if you are required to pay a buy-in to participate in the program, even if the buy-in is a nominal one-time or recurring fee (e.g., $10 or $10/month).
  • Complex commission structure. Be concerned unless commissions are based on products or services that you or your recruits sell to people outside the program. If you do not understand how you will be compensated, be cautious.
  • Emphasis on recruiting. If a program primarily focuses on recruiting others to join the program for a fee, it is likely a pyramid scheme. Be skeptical if you will receive more compensation for recruiting others than for product sales.

The SEC has taken emergency enforcement action to stop alleged pyramid schemes that violate the federal securities laws, including schemes disguised as MLM programs.

Did you notice the one about not selling to the public, but only within the pyramid?

From the videos I have watched, I have seen pushy sales pitches promising an amazing financial opportunity, buy in required, complex commission structures, and an emphasis on recruiting.

It seems to me that Elomir is currently operating as an illegal pyramid scheme.

Can you be successful as a brand partner at Elomir?

Unfortunately, Elomir is too new to have an income disclosure statement (which is a requirement of MLM’s to disclose how much people within their companies earn). So we cannot see how much their reps are earning. However, if we extrapolate data from a number of major MLM’s, we can probably use that as a good guess for what Elomir will be as well.

Young Living:

89.6% of the company earned $3/year on average. 7% earned $251/year on average. Not including expenses.

Mary Kay:

83% of Mary Kay reps earn nothing, not including expenses. 98% of the company earn $206 or less a year on average (again, 83% of that is $0).

Monat:

96.6% of the company earns $22/month ($264/year) on average not including expenses.

Herbalife:

These are annual income numbers, and they do not include expenses. 14.6% of the company earned nothing. And the vast majority earned less than $2,200 a year.

It looks like the sweet spot is around $200 a year on average for the vast majority of the sellers, and that is not including expenses. It’s safe to say that the majority of brand partners will lose money.

Of course, as we saw in the video from Jessica, everyone is told that the earlier they get in, the better. Those on the call are assured that this is a once in a lifetime opportunity to get in early. It’s clear to me from this call that everyone understands the real benefit to this business is getting in early and recruiting people under you. There is a silent agreement to manipulate people to join, so they will benefit at the top. You can see several people on the YouTube embed above that are noticeably giddy (and even fist pumping) when Jessica discusses bonuses for recruiting people. This is the predatory nature of MLM’s / pyramid schemes.

I mentioned this with every MLM I posted above, but the income figures shown do not include expenses. You have to buy a product in order to sell it, so there is a margin from selling the product, you don’t simply earn $89 with no expense. Elomir also encourages brand partners to purchase business insurance, as home insurance won’t cover the reps in case of issues.

Elomir encourages Brand Partners to obtain insurance coverage for their Elomir business.
A homeowner’s insurance policy does not cover business-related injuries, or the theft of,
or damage to, inventory or business equipment. Brand Partners should contact their
insurance agent to make certain their business property is protected. In many instances,
this may be accomplished with a “Business Pursuit” endorsement to an existing
homeowner’s policy.

There will be costs to market the product to your friends, usually in the form of home parties or visits which cost fuel, food, and supplies.

The biggest cost however is the opportunity cost. At an average of $200 revenue per year, assuming reps are putting in only one hour per week of work, they would be earning equivalent to $3.80 per hour worked. If we assume more time is spent working on Elomir, the hourly wage plummets even further. At this rate, it would be significantly more profitable to work minimum wage at McDonalds. Just a couple shifts a year would earn more revenue then MLM’s earn in a year, without requiring expenses.

There is a great chart published by the Federal Trade Commission. From the data, you are more likely to turn a profit from gambling, then joining an MLM.

My attempts to contact Elomir

I tried to do some undercover work by contacting Elomir via some fake email accounts. Below is a record of my conversation with them. Yes my alias is Ares, the Greek god of war.

The support team did a good job of covering themselves and answering the questions as briefly as possible. My goal was to get them to say something they would regret, like substantiating a wild product claim, or admitting they are only selling product to people in the pyramid. After they closed my first case, I decided that I was going to just try and annoy the hell out of them with a constant stream of questions that hopefully tie up their support queues a bit.

Arg! These guys are good. I really thought I had them on my question about giving the product to children. I have documentation of people giving the product to children and was going to slap that on her if she said not to give it to kids. Delicious moment lost.

I also found some brand partners through social media and sent them an email via their personalized sites. I used an alias named Janice Macurdy for this one, who is a retired lady with joint pain. Unfortunately, I didn’t receive a response. The person I emailed was the physician, so I had planned to ask him whether he thought what he was doing was a conflict of interest or not.

Eventually, I decided to wrap it up by blatantly accusing Elomir of operating unethically and possibly being an illegal pyramid scheme. Enjoy that email below.

*Note, I removed all Facebook links below that pointed to a full name/picture of a person in order to protect their identity (even though they posted publicly), but in the email I sent Elomir, I included all the links directly. I added some screenshots below so you at least get a sense of what I passed on to Elomir.

I received no response.

In closing

I parsed through a lot of content for this post. It is quite depressing. A lot of hype from the leaders, making big claims and promises, and a lot of people buy it. The messaging is that they are starting their own business, and as long as they visualize/believe, and work hard, their financial dreams can will come true. We know of course that most of these people will likely end up losing money, or they will be actively involved in recruiting people to lose money. Companies like this tend to prey on young women, many of which are stay at home moms looking to make some income on the side to support their family.

I hope, and expect to see a rapid decline in momentum from Elomir. I believe there is much less demand for this product than the brand partners think. Hopefully there is very little demand, and brand partners will cut their losses, enjoy the magical benefits of the strips they purchased, and move on.

I’ll send you off with this video I found on YouTube of Mike, who is excited about new beginnings with Elomir. I sincerely hope Mike finds a way out soon.

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