September 1, 2008
YTB network marketing (MLM) - can regular folks make money?
I still have a travel plan in the works but for now, an article on YTB. One statistic that stood out was that YTB has gotten "130,000 people to pay money to YTB for the ability to sell airline tickets and cruises."
Most of those people don't make any money. They pay $450 = $50/month. This allows a few people to make fortunes but for most people there is no money:
YTB's 45,000 entry-level sales reps — the people who sell new travel agencies — on average earned $90.32 last year. And of the more than 200,000 people who paid the company as much as $1,000 to run a travel website in 2007, nearly 125,000 didn't earn a penny in commissions, according to Brown's lawsuit. Half of the rest earned less than $39. And while YTB took in $103 million last year from selling and maintaining websites, it paid out just $13.4 million in commissions for selling travel.Clearly the company is making money - 100 million in income and 13 million in commission? Someone is getting screwed.
California Attorney General Jerry Brown says YTB is a scam. The fact that so few people make money means it must be a pyramid scheme. I don't think it proves this at all. It proves that some people don't understand network marketing. The whole point is that it allows you to start a business with a minimum investment. $450 + $50/month is more than other network marketing companies (at least the few I've heard of).
It also shows that joining YTB doesn't make someone a travel agent so it's still very difficult for YTB people to sell travel. Most of them don't make money because they don't sell travel and they don't recruit more 'agents'.
I'm not here to tell you what to do, but I will offer some advice. Unless you're confident that you can sell travel and recruit more people into YTB then it is not the business for you. You would need to be convinced that the YTB website is the best place to buy or sell travel. And that makes no sense because there are thousands of identical YTB 'travel agency' websites online... I have thousands of people who want to travel reading this blog, but I am not joining YTB. I don't want to try to sell you all travel.
It's been a while, but some of you will remember that we've talked about YTB and other 'card mills' before. Here, if you read the comments some YTB tool repeated calls me a liar - you still in business Earl? Here I mention another problem with GTI and YTB - since anyone can join you'll end up being in business with some real losers. In the comments Earl claimed that bad travel agents wouldn't last a day in YTB. I think he's full of crap. Here's the October, 2007 post when I first became aware of the issue.
A related post is that untrained travel agents are less likely to provide the kind of consulting many of us expect.
Posted by James Trotta at September 1, 2008 9:44 PM | TrackBack
As a travel agent, I can tell you 2 things wrong with YTB. FIRST - the only way to actually make money is the referral service, which is why it is not truly a travel service for any of those who signed up.. SECOND - let's be honest. If those of us who are bonded had to properly study, intern and earn our wings, what makes someone think there's a shortcut to it? This is a career, and takes a lot of work and commitment. It isn't something you just decide to "do" one day, because you think you'll earn soem freebies or discounts. If you really want to sell travel, speak to an agent and find out how to get started. Then work with a reputable agency till you're familiar with the rules, the vendors, the destinations......
Posted by: Linda Bator at September 2, 2008 10:31 PMThere are too many (far too many) naysayers denigrating something that they know nothing about. First, do they understand what a network marketing company is? Second, have they researched every MLM and know all the interworkings? Most of the comments and accusations being used against YTB have no merit. This statements - YTB requires agents to purchase products until they reach a certain level - FALSE. YTB does not train it's agents - FALSE. Only a handful of people are making money in YTB - FALSE. YTB offers training inhouse, educational seminars, CLIA courses, training manuals, and other industry resources to educate and equip agents. Training resources come with your membership and there are other resources to purchase. YTB works if an agent works. It's about committment and relationships - building people up & the like. It's about hard work and achieving goals. It's not a get rich quick or fly by night. We do sell travel and we do recruit people. We help many people to change their address, to live again. What we're talking about is an idea that maybe there is a better way, just maybe if we'd open our hearts & minds to change, we might just find that way. If you're not an expert or deeply involved, then what do you know?! A person who has done their homework and can speak intelligently on a particular topic because they actually know what the heck they're talking about could possibly know what a company or person is about. Adversity just makes us stronger. We will be the largest and bestest because we have people who care about us, we are a caring people, and we know how to build relationships/networks that work. Start dreaming again America. Who among you have gone to the internet to book travel? What kind of training did you have? Did these people use the traditional travel agency? What are they using - the internet! When a "real" travel agent refers their client to Hotels.com, what did they just do - referral?!!! Ummmmm! Proud YTB Certified Referring Travel Agents
Posted by: Kirk & Marianne Hemphill at September 4, 2008 1:51 PMI'll partially agree with Kirk and Marianne. There certainly are people who bash network marketing without understanding it.
I understand network marketing. To say that YTB does not require a purchase is just stupid. You pay YTB money. Maybe you don't get a product in return but whatever, you still pay.
And I never said that a handful of people make money. I said that most people fail. That's true.
Posted by: James Trotta at September 4, 2008 10:51 PMYTB has had thousands sign up and pay, and got nothing for their money - and I know quite a few who got caught in this. And just a note to Kirk and Mariann ---- a "real" travel agent would never REFER a client to hotels.com. The would book their clients' travel for them. Perhaps YOU don't understand the travel agent biz that well, hmm??? LASTLY - you compare the travel industry to an MLM - and it is not. It is a SERVICE-based industry, not one based on signing up friends for fees. Only a handful of people have had any success - and that's why it is not only California, but several other states as well that have taken legal action against YTB - not to mention airlines, cruise lines, hotel chains....
Posted by: Linda Bator at September 5, 2008 4:22 AMI'll mostly agree with you Linda but I would like to point out that to succeed in network marketing you really ought to be providing your customers with excellent service.
I don't care if you're selling magnets, or skin care, or vitmamins, or plates. You can win customers by providing top notch personal service (you need good products also) that they just won't get in regular stores. This is difficult but it's not even the most diffcult aspect of network marketing. No wonder so many people fail.
With travel maybe it's different. People expect personal consults with their travel agent so it may be hard for a network marketer to outperform the rest of the industry.
Posted by: James Trotta at September 5, 2008 10:50 AMtravel agents get mad at travelocity and orbitz it is not ytb fault your business is gone. They too big to go after because how in the world will you stop ordinary people from booking there own trips with no training. wow
Posted by: t at September 23, 2008 2:54 PM