MLM WatchDog Reviews YTB - FTC Investigation Coming?

IMPORTANT YTB UPDATE:

You might want to contact your YTB friends and let them know that Rod Cook (MLM Watchdog Editor & one of the most trusted names in Network Marketing), has begun to seriously question YTB?s business practices, as well as its business model. Having Rod Cook question YTB?s business model obviously isn?t a good thing for YTB, and it?s nearly as bad as their recent loss of IATA certification. The figures and graphs in the below article by Mr. Cook speak for themselves. YTB reps really need to take an honest look at Mr. Cook?s article for what it is, simple reality and YTB?s own numbers. It should be noted that Mr. Cook holds no affiliation with any YTB competitor and is a very respected and recognized authority within the network marketing industry.


QUESTION: What has been YTB?s ?product? for the last 7 years? A person paid $500 and received a YTB/IATA card and a website (Of course IATA?s suspended/terminated YTB?s affiliation, so their core product has disappeared). YTB has no ?stand alone? travel product, so they?re now merely selling a travel booking website to people for $500.00.


Website Link: MLMWatchdog - YTB Your Travel Business A Pyramid?


MLM TRAVEL YTB LATEST PUZZLING NUMBERS AND PAINS

Dec 6 2007 ? >From the latest MLM Travel Company - YTB Quarterly report they have 120,948 are RTAs with active travel websites. With information given below on travel commissions paid out (See bottom number) that is $9,398,036 divided by 120,948 sites selling travel = an average of $77.70 each RTA website received for the 9 months. That ends up $8.63 a month average paid per each site. This is an update from the analysis on the bottom of this page.

As the saying goes, the money is in selling picks and shovels not digging the gold. The reason we worry about good folks in YTB is... traditionally the law goes after MLM companies paying commissions on selling picks and shovels! Evidently the marketplace thinks so too because the price of the stock is down from $8+ a year ago to a little over a dollar ($1.24 today).

Now Phil Piccolo the greatest of money grabbers has joined MLM Travel Company YTB. He has set up a plan to help all the poor folks that lost fortunes with him before in his different scummy schemes. Then they can join YTB! This may be the straw that breaks YTB?s back? On good authority we know there are several law enforcement entities following good old Phil?s activities. Having Phil?s tracks going to YTB is not good for YTB! http://www.worldwides...


Nine months ended Sept. 30, 2007

Sale Volumes Revenue %
NET REVENUES
Online travel store sales and
monthly fees $ 69,031,218 72.0 % $
Travel commissions and
services 13,930,824 14.5 %
Training programs and
marketing materials 10,364,547 10.8 %
Other 2,592,266 2.7 %

Total net revenues 95,918,855 100.0 %

OPERATING EXPENSES
Marketing commissions 55,370,759 57.7 %
Travel commissions 9,398,036 9.8 %



TRAVEL TRADE MAGAZINE REPORTS DIRECT ATTACKS ON YTB

Nov 16 2007 ? See link below for full article by George Dooley Travel Trade Magazine.
Rhode Island Agency Investigates YTB Business Model Summary

The state Department of Business Regulation (Rhode Island) confirmed that it is looking at the YTB business model, according its executive counsel. Counselor Berstein sent an email to John Frenaye, originator of the Anti - MLM petition, "MLM Travel Agents Cheapen Industry," The email confirmed that the Department was reviewing YTB to assure it was in compliance with Rhode Island state law. Rhode Island does require travel agents to be licensed.

Frenaye had asked Rhode Island attorney general's office Rhode Island?s rules and regulations on MLMs, card mills and travel agents. Frenaye has gotten over 2,600 travel agent and supplier signatures, on his petition against MLM Travel Companies. In an interview with Travel Trade (see link below), Frenaye, owner of Travels With Fred in Annapolis, MD, said state attorneys general may be a source of redress for travel agents and the industry faced with the proliferation of multilevel marketing schemes and card mills.

LOW BLOWS TO YOUR TRAVEL BIZ -YTB SEE STATEMENT BELOW
Nov 19 2007 Travel News Magazine - IATA (International Association of Travel Agents) canceled Travel Agent accreditation of YTB and three other U.S. travel agencies for violating accreditation standards forbidding the "improper lending, subcontracting or hiring to a third party of an IATA numeric code by agencies."

Nov 19 2007 Travel News Magazine - PERILLO TOURS no longer is accepting bookings from agents affiliated with YTB Travel Network, a multilevel marketing travel agency. Steve Perillo, president of Perillo Tours, said that when he read a few weeks ago that Royal Caribbean was weeding out "card mills" and that YTB was on the list, he decided to have a look at YTB bookings for his firm. He said he found that "90% of the travelers and booking agents were the same person." He said Perillo Tours might take similar steps regarding similar companies.


YTB SHOUTS ABOUT GROSS SALES, BUT NOT WHAT COUNTS
Let's Look at Past Stock Reports

Total Revenues = $24,178,481

Online Store Sales and Monthly Fees - $17,965,361 or 74.3%

Training Fees and Marketing Materials sold to field - $3,361,152 or 13.9%

Travel Commissions Received - $2,537,694 or 10.5%

YTB is a travel company and their lowest revenue producer is travel commissions. YTB made more from training program fees and marketing materials.

YTB increased in the number of RTAs by 20% in Q1 of 2007 - but, travel only increased 1.2%. I doubt you'll ever see travel commissions received be more than 20% of YTB's income - and I'm being generous.

Of the $2.5 million in travel commissions received, they only paid out a mere $1,608,688 or 63.4% of ALL travel commissions received - TOTAL.

But, of the $21.3 million in other received revenue - it paid out - $16,136,795 or 75.8%.

For a travel company selling websites that people are to be selling travel on, this revenue stream only produced 10.2% in Q1 of 2007 and only 9% in 2006 - and in Q2 2007 - I bet it won't be over 12% - if that. We'll see in August when the filing is released if a filing is released. It might be better if one weren't at this rate. We'll see what happens in Q2 and Q3 2007. Think they will meet the 50% the FTC (Federal Trade Commission) demands (Diagram above for Burn Lounge vs FTC)? Doubt it!!!!!


MLM WATCH DOG-FTC PYRAMID DETERMINATION 50% ?RULE? - YTB IS HEADING FOR TROUBLE