Re Michael Hansen: Once a scam artist, always a scam artist?
This is a response to Tenderfoot’s questions in an older article.
Some of his questions and comments, paraphrased:
What’s your opinion on MLMs, are there any good ones?
Small Businesses vs. MLMs – Why not?
What about bad economic times and tough financial situations? What’s the alternative to DubLi?
Thoughts on gambling.
Do you think MLMs simply have an image problem?
Isn’t DubLi a case of viral marketing?
Getting in early: Microsoft and Starbucks vs. DubLi
What about The Spin Factor’s Bias?
Could DubLi work?
I am not here to argue, but figure things out. I try to have an open mind, because an open mind is like a parachute, if it isn’t open it doesn’t work.
First I would like to know if you think there are any good MLM companies out there.
There are some legal multi-level marketing programs, but the ones that require expensive up-front payments rely on the fact that their distributors will be desperate to earn their money back. These distributors will lie about their economic status.
It’s easy to justify lying that way, because you figure, “once I make a few sales and put a few people down my line, it WILL become true”.
The main problem is nobody is really selling the product; they are selling the opportunity to become rich.
What’s wrong with that? Well, if I was advertising a drink made from mangosteen (a very tasty fruit by the way) and falsely claimed that it cures Alzheimer’s Disease, PMS and improves your intelligence by 120 IQ points, and sold it for 300 dollars an ounce, and diluted it with water and apple juice, most people would agree that that is not just wrong, but very wrong.
It’s wrong because you are advertising value that doesn’t exist (the miraculous health properties); and it is wrong because you are charging an extremely unreasonable price, given the truth.
It would be like selling a brand-new professional-level snowboard on eBay for 3000 thousand dollars but actually sending something you found at a used sporting goods store for 90 dollars.
So when a DubLi representative promises that they are rich, and that you’ll be rich if you join the DubLi Network and pay $700, $1500, or $3000 for a credit-bundled license, that’s false advertising as well.
They’ll tell you that you’ll easily make your money back, but that’s outright false without putting 5 levels of people under you who are able to sell more credit-licenses all the time, every month.
That’s mathematically impossible for 99% of MLM promoters, even if they are the best salespeople in the world.
So if a promoter makes it sound like you have more than 99% percent chance of recovering your investment with DubLi, they either haven’t done the math, or they are outright lying to you.
This is where it gets worse; even if you are the 1% that is making money from DubLi as a promoter, you can only earn 3% of the 97% that goes into DubLi. If you can earn substantially more than that, then DubLi is in effect an illegal Ponzi.
So not only do you need a lot of luck and shameless determination so you can be in the 1% that makes money; you are also limited by the profits from actual product sales – 3% or less.
DubLi’s actual product sales (and not credit-bundled licenses) are barely enough to pay for 2 or 3 average-household incomes. And you have to split that with all the other promoters.
I know not all people will make it in MLM’s and it is probably impossible for that to happen, that is why there is a lot a negativity about them. It is a business model (not a perfect one) that people can try with very little risk that can help make a few extra dollars a month. A few extra dollars can go a long way in a household. I feel people should know what they are getting into and not fall into the trap that this will fulfill all their dreams. The risk to open your own business can ruin a family.
That’s very true.
“Two-thirds of new employer establishments survive at lease two years, and 44 percent survive at least four years.” (SBC) I don’t want to take out a business loan in this economy and I don’t have time for another full time job.
That’s a pretty good start. Instead of having a 1% chance of making money with DubLi, you have a 44% chance of being successful in your own business for four years.
DubLi lasted less than one year in Denmark. DubLi registered in Delaware in 2006 and failed in the rest of Europe in 2007.
DubLi started again in October of 2008, and is due to fail by next October.
If you have $3000 dollars you can throw away in exchange for $90, maybe you can afford it.
Let’s say that instead you spend your $3000 to start a small business (you might need more than that, depending on your business, so you borrow $9000). If your business lasts 2 years, that’s 2 years of feeding your family, even if you have to close your business.
That’s much better than selling DubLi to your mother, wife, and best friend, and earning nothing.
http://www.businessknowhow.com/startup/business-failure.htm
Also, my friend and I were going to do DubLi together because we both have kids and want to keep our wives at home with them, because we feel that is important to us. Plus, doing it together minimizes risk and helps grow it quicker. Yes, we could downscale to a smaller house or apartment, so we can live on one income, but because of the economy we cannot sell our homes without ruining us financially. We are stuck. I know you will comment that this doesn’t have anything to do with DubLi.
I would have probably said that, and it is basically true. But I wanted to really think through your questions, because they were very challenging and very interesting.
Many networks you also have to spend large amounts of time away from home at night, with DubLi it gives you a chance to work a lot more at home.
Yes, DubLi is gambling, but it looks they are trying to find a niche in the market. No, it will not replace ebay, but maybe it can get a 5-10% of ebay customers. I don’t have the statistics to back it up, but I have heard that ebay had 30 million customers in the last year and that number is growing.
That’s possible, but if you don’t think DubLi will replace eBay (and I don’t either) it would be safer to work for eBay.
eBay also has an affiliate-style program and they don’t even charge you to advertise for them.
https://publisher.ebaypartnernetwork.com/files/hub/en-US/howitWorks.html
I honestly don’t think anybody will make more money off DubLi as a promoter than by advertising eBay at no cost.
You might make 50 dollars a year with a program like eBay’s. But you will certainly lose at least $700 with DubLi. Even if you made 75 dollars for recruiting someone else with DubLi, you’d come up 625 dollars short.
If you think gambling is bad, then I understand.
Gambling is only bad if you are consistently losing money you need to survive; or if you mislead people into gambling by calling it an auction.
In fact, I recommend traditional gambling at Las Vegas instead of joining any MLM that requires as much money upfront as DubLi.
If you happened to genuinely like DubLi’s gambling products, then I recommend the Xpress auction because it’s the safest and the most like a real auction.
If you watch the World Series of Poker on TV you will notice it is a fast growing and major place for internet advertising (poker sites). Yes, DubLi is calling it a reverse auction, but that is their marketing campaign to rival ebay. I took some marketing in college and part of marketing is being unique and putting a twist on things.
Certainly. And the Xpress auction is close enough that “auction” is good marketing. The other two games by DubLi are clearly not auctions whatsoever.
For instance, why is your website call The Spin Factor? Great name by the way.
Thank you. It was chosen (among many other reasons) to satirize Bill O’Reilly’s No-Spin Zone and FOX News, by presenting lies as outrageous facts. But we inadvertently forgot about Bill O’Reilly.
One definition for spin is: Slang. to cause to have a particular bias; influence in a certain direction: His assignment was to spin the reporters after the president’s speech.
One definition of Factor is: one of the elements contributing to a particular result or situation
We are hoping to put other definitions into practice as well.
It seems like all MLM’s never have everything worked out in the beginning and it takes the while to work all the kinks out. Everything is always hearsay and it looks risky. Yes, it is true that getting in earlier with a MLM is better because of a more open market and in the early stages it seems risky because it always looks like a scam and sometimes is.
I also have found that you can find negative on everything in the internet. It is like the bathroom wall anyone can write on it. I also have noticed that the MLM’s that are consumer based seem to make it. Companies like Mary Kay, Herbalife, Primerica provide something that the consumers are still buying.
Those seem to be some good exceptions to the “rule”. However, the chances of success as a promoter with those companies is still pretty bad.
Don’t quote me on this, but the statistics for Quixtar seemed to indicate that even the top earning promoters (full-time, hard-workers) were barely making a living, and generally losing money.
I know I maybe me wrong, but DubLi seems like they are using network marketing to get thier business started faster than ebay.
Even if that’s true (and it probably is), would you give $3000 to a stranger who can only promise 90 bucks a year?
In theory the ends could justify the means. But what if DubLi gets big with your $2910. Seems like an awful investment. Unless they can promise that you’ll break even and they can show your their business plan (for example, what they will invest your money in), you’d basically have to trust not only their honesty (which is seriously lacking), but their ability to grow their “business”.
Word of mouth (or by internet), especially when they are paying people is fast and cheap advertising. That is also why so many companies have outside sales reps. It seems like it would be good to get in early, help promote it and then eventually if will just become consumer based like ebay.
That’s an ends-justify-the-means attitude. The problem is they have to guarantee the ends or explain your odds because you have no control over how they use that money that you have invested in them.
It would be similar to buying stock on Starbucks or Microsoft before they became big. Who would have known a small little coffee shop in Seattle would turn into the McDonalds of coffee. Shareholders got in early and benefited, but they took a risk.
Excellent point. Just remember that you don’t get to be a shareholder. You don’t get an official vote on the direction of DubLi, whereas if you had invested in Microsoft or Starbucks, you would get a vote or dividends, or both; and it would be in writing.
From the DubLi distributors I have met they are getting in early and promoting it with that hopes that it will grow and eventually they will make money off the consumer base. If DubLi is still around in 10 years people will probably never know it started out as a network.
That does seem like a great idea, but again, you don’t have the same rights as an investor, or shareholder.
On the other hand, if DubLi offered you legally-binding shares, that would be a very different story; and I might even come with you to a shareholder meeting.
Network marketing can be a way to change some things in your life (hopefully for the positive) with little risk. What would be you suggestion for making more money with small risk, especially in this economy.
If you mean making a little money on the side, there are several affiliate programs on the internet that do not require any money upfront. On average your chances of making substantial amounts of money are still pretty small, but you are better off with referral programs than with an MLM like DubLi. And as always, you should still watch out for scams.
I want to ask you a few things and I am not doing it to make you mad. I am really curious because I know there is bias in everything we read or hear. Does the spin factor make money off of its advertisements and how many people visit the site?
We are mostly hobbyists. Our best day was in August of 2007 with 28,000 visits (probably more, but we unexpectedly exceeded our processing allowance). And we do get compensation for advertising.
Also, do you get more feedback on negativity or positive information?
The article that generated those visits was relatively neutral. The amount of feedback is usually more a matter of whether an article is popular or not, and whether we respond to it regularly.
I just want to know if your comments to the DubLi distributors are intended to throw more wood on the fire? It makes for interesting reading.
Definitely. More than anything I wanted to clear my name from false and unfair accusations. I also thought I was talking to DubLi confederates, so I was a bit angry. Great comments/questions like yours are much harder to respond to, especially if you sound genuinely interested. But I get bored if I don’t throw more wood on the fire every now and then.
I have to say I think a couple of these DubLi distributors have a good outlook and good intentions, but the majority of them are very angry and those distributors are just making me less attracted to it.
I honestly didn’t think they were distributors. I thought maybe Michael Hansen was “trolling” the site, but about 15 days ago, I learned to that Michael Hansen sent out a private letter to his distributors on Oct. 13th accusing us of libel.
So, indeed it was real DubLi distributors posting all those angry messages. But Michael Hansen deliberately embedded the letter inside an image so that search engines wouldn’t pick it up. Therefore, I didn’t know about it and couldn’t respond to it; and the lies that were being posted seemed very suspicious.
Fortunately somebody with the alias “Sam Jones” brought those images (which were inside a flash movie) to my attention; and I could finally respond to Michael Hansen’s lies.
The great thing about the whole situation is that Michael Hansen thought there was no way to verify whether he had actually declared bankruptcy or not in the past, so he falsely claimed he hadn’t.
We already knew he had declared bankruptcy but we hadn’t published hard evidence. It was quite fun to expose his hypocrisy with documents from his own government.
I am trying to have a healthy outlook on this situation, but from what I have gathered you think DubLi is doomed. Isn’t anything in the back of your mind that thinks this might work? Once a scam artist, always a scam artist?
After reviewing the law, there is a chance that DubLi can redeem itself; Only if it can stick to its implied promises and if it can shift focus to emphasize the gambling and lottery more.
If they choose to emphasize the gambling, they will need to become more transparent, either by finding an independent and trustworthy agency that will oversee the gambling, or by promoting real auctions.
eBay is getting a lot of flak for their counterfeit and bootlegged products. If DubLi finds a model that can guarantee legitimate products (through real auctions), they might stand a chance; but they have a terrible image problem with so many scam artists being associated with DubLi.
Another thing they should do is stop charging so much to join the program. A website costs no more than $75 a year, and they are charging $700-$3000 not including renewal fees. Sure, you get “credits” and access to their gambling modules; but that benefits them more than it benefits you. It’s a veritable rip-off.
It might also help if Michael Hansen admits to the bankruptcies. But at this point I would say he is still a scam artist, mainly because he recently lied about so many things that can be fact-checked.
It is true we had to work with very educated guesses at the beginning, and one or two assertions about DubLi were false or probably false. But DubLi made things worse by lying about true assertions we had made. If they had stuck only to the truth, I would owe DubLi a small apology. But it turned out better this way, because it exposed them further and very, very clearly.
One issue I see is when there becomes so many consumers that the odds of the prices dropping to 50% below retail price it will be slim odds, because there will always be someone out there who will buy it for only 10% off. I am talking about the express auction.
That’s generally bad for DubLi, but good for you.
I can honestly recommend the Xpress auction for that reason. But paying to be a “business associate” is only a good idea if you can afford to throw away your money.
Anyways, I am curious to hear your comments.
Thanks, Rob aka Tenderfoot
Sorry, for the delayed response but you had some difficult questions.
Comment by Chris Malta | December 26th, 2008
MLM programs, Network Marketing Programs, and all the other garbage wrapped up in this kind of thing are pure junk, and always have been. These kinds of scams are not new; they existed long before the Internet was even a concept.
They are simply mathmatical schemes concocted to move money around, and all they do in the end is move money to the ones who concoct the schemes. There are new schemes like this popping up every week, and none is any better than the other.
I’ve spent decades in business, both online and off, and have made millions of dollars. It’s never been quick, easy, or been done for me. I work closely with executives at real internet companies like eBay, Amazon and many more, and I can tell you for a fact that none of these fantasies will ever replace those companies, or even come close to it. As a real live self-made internet multi-millionaire, I can tell you for a fact that if you want to own a business that actually provides a real, stable income, own a business that produces something, educates someone, or makes a real physical difference in the world in some way.
These MLM and Network Marketing schemes never last more than two or three years, and never make any real money for anybody but those who invent them.
Chris Malta
http://www.ChrisMalta.com
Comment by L505 | January 31st, 2009
Christ Malta – that is partly true, I dislike MLM myself
However, there are MLM companies that are solid companies, and have been around for ages and are going to be around for ages to come. For example, Melaleuca. They are obsessed with tea tree oil, and are kind of obnoxious about it – but their business is solid and is not an entire scam. Possibly the marketing they do is bordering scam, but this is similar to how cheap labor in China is a scam and people could then call Wal-Mart a scam since we are supporting a scam operation in China. Dollar stores, similar.
Despite what you say about honesty and ethics, many solid brick and morter hard good businesses, are unethical in some respects. Leather coats are produced by cheap labor too (legitimate drop shipper company) – call this a scam if you want, similar to how I could call melaleuca members scam artists for calling people up on the phone and yapping. Walmart, electronics companies, are all unethical in some respects and they are well known so called “honest companies” to the typical person.
Comment by Tom | March 25th, 2009
The MLM model is not a scam at all. Warren Buffet, Donald Trump, Zig Ziglar and many others have become involved with MLM. To say MLM is a scam or anything along those lines is pure ignorance.
What I will say is that MANY inferior companies use the MLM model to gain traction. Dubli is an absolute joke of a company and a horrible concept. Dubli is a ponzi scheme in my opinion. The commissions being paid are not based on the sale of the product, they are based on signing people up. Whenever there is compensation without a product exchanging hands, then there is high risk the company will be investigated by the gov’t. I would be shocked if Dubli isn’t looked at closely because of this, and we’ll all have to wait to see the outcome.
Back to MLM companies. Of course Amway and some of the old school companies are solid and have created a lot of wealth. But even newer companies like Univera are more than legitimate players. Univera/ECONET controls more then 30% of the worlds aloe vera, they employ 60 full time scientists, they have over 160 patents, etc. I’ve even heard Proctor and Gamble tried reverse engineering their patent for joint relief and had to pay them $25 million in penalties. I use Univera as an example because I personally find that company the most impressive in the MLM biz. I personally don’t consider Dubli mlm, I consider it a ponzi scheme.
The problem with the MLM biz model is when companies sell the product as a opportunity for wealth. I am personally always cautious if the MLM company doesn’t offer both Customer orders and Associate orders. If someone can just be a customer without any sign up fees or commitments, then theres a good chance the company is legit. But if you have to pay a sign up fee to order products, then you should probably run the other way.
Comment by Steven | April 3rd, 2009
This is right here, in the present, not the future.
Comment by DubLi forum | April 25th, 2009
Come on people. The guy writing this stuff doesn’t even believe himself. This weak argument is nothing more than an attempt to create controversy.
This “eagle scout” obviously has an agenda here. To say that network marketing is not legitimate is plain foolishness. The “social” business model is the way of the future.
The entire Internet has become social. Sites like Facebook and MySpace have become some of the most popular sites online. The social model just makes sense.
Eagle scout, if you are so smart, let’s see some proof of your success. This blog? I don’t think so. Let’s see something that shows you have the business acumen that you claim to have.
There are plenty of millionaires and high-caliber successful business people getting on board with DubLi. These are people that understand business and money. How about you. What have you accomplished that is so great?
Do you even own any websites that can show you understand Internet business? I have sites in the number one spot on Google in highly competitive markets and can prove my expertise. I get paid a lot of money to give multi-million dollar companies advice on their business models. How about you? What makes you an expert on Internet businesses and their business structures?
I am willing to go head to head with you any time. The “fluff” you wrote above isn’t even worth responding to. Bashing network marketing and the “social business model” is just plain ignorance.
Jamison
Comment by eaglescout | April 25th, 2009
Dear “DubLi forum”,
You may not have heard of “straw man arguments” but your entire post is filled with them:
I’m not bashing the social business model.
I don’t claim to be “so smart”; and success in business isn’t the best way to measure intelligence.
That’s great. No one is saying otherwise.
Whom, for example? Santi Fuentes? Corrupt princes from the UAE?
Thieves understand business and money. That doesn’t mean everyone should emulate them.
You make a lot of claims. Please back them up.
Comment by Matin | September 27th, 2009
Hi There, BEWARE of Dubli. It’s now hit the Australian shores and lots of motivated fools are singing it’s praises. These people are desparate to find a ‘way out’ of their financial gloom, only to find that they are spending money to join a ponzi scheme that will colllapse…another dream out the window.
Comment by Jack Daddy | October 19th, 2009
I am in Australia and I have joined Dubli, but am now regretting my decision big time.
Is there any way I can recoup my $900 AUD that I invested in Dubli?
Comment by rick | November 1st, 2009
Jack Daddy, a family member of mine ” invested ” $3000 in to Dubli. Let me know how it turns out for you? The so called launch in Oz was set for this year and kept being pushed back, now set for March 01 (?)
I know Dubli in Denmark went Bankrupt.
Comment by Make Money on eBay Videos | November 11th, 2009
I’m searching for sites related to making an internet income and yours came up, this is helpful content, even though on a side track. TY.
Comment by kees | November 11th, 2009
Sorry for anyone who ‘invested’ money in Dubli
This has been going on since 2003…
For those interested, here’s some more troublesome facts & figures about Dubli:
http://dubli-unofficial.blogspot.com/
Comment by Tootsie | February 3rd, 2010
Does anyone here know of any government authorities in any country taking action against Dubli or any of it’s promoters? Australia (ACCC) and Canada (RCMP) are fairly diligent in stopping any pyramid or ponzi schemes,or general scams before they take off. Dubli has been around for sometime now and all I can find on the web are just opinions on forums and blogs. If it was a fair-dinkum scam I would have thought some authorities would have picked up on it by now. Please post links.
Comment by JAKE | May 28th, 2010
WHY ALL YOU NOT HAPPY IN LIFE, WILL STREET SAYS THAT DUBLI WIL BE BIGGER THE GOOLE IN 2YEARS
New Search Engine in Shopping Mall
Will search all the shops in the mall plus the DubLi auction.
Integrated with Auctions.
Never been done before.
This will make shopping in the mall so much simpler and easier.
Many personalised features to enable shoppers to be notified on items of interest.
Entertainment Section to be added.
DubLi.com will have two Sections :
1. Shopping 2. Entertainment
Express Music
Unique Bid Movies
Shopping Mall Games
E-books
Initially Customers will be given a free period to try the entertainment options before having to use Credits to pay a subscription to use it.
The Entertainment Section will be launched later in the year.
(Customers will not only purchase credits from BAs to use at the Auctions but also to use for Entertainment. )
who say DUBLE WILL NOT BE BIG…….
Comment by JAKE | May 28th, 2010
WHY ALL YOU NOT HAPPY IN LIFE, WILL STREET SAYS THAT DUBLI WIL BE BIGGER THE GOOGLE IN 2YEARS
Comment by Dominic Rafalski | August 17th, 2010
Almost everyone that makesan income on the internet (even the millionaires) do so through affiliate marketing. Being successful in affiliate marketing involves applying the formula that makes other affiliate marketers successful. For instance, autoblogging. Autoblogging is one of the least well-known forms of making money on the internet for quite some time… primarily because it’s quite difficult to make a good auto-blog. Yet, when done right, it can provide you with a perpetual passive income with the only real work required being the setting up process. Video Marketing, and several other marketing strategies are all designed to drive traffic to your site, can be incorporated organicly in order to raise the position your site appears in the SERPs when any one searches for a term related to your site. And yet, even this can be totally automated.