News just in (As of 8th July 2016)- The DSA have not approved LTW for membership. They are no longer on the list of prospective members on the DSA website.
On the 11th July there is a petition in the Manchester courts for LTW to be wound up. This move has been brought forward by a perfume company who are owed money. https://www.thegazette.co.uk/notice/2565024
I have been informed by people from LTW that my last calculations were misleading and do not show how people actually earn money in their scheme. I have re-examined the payment plan and found that I was mistaken in the requirement to do three months shopping to be eligible for bonuses. Here is an updated version of how you are supposed to make money. Update to the update (27 May 2016), I have seen the official compensation plan for April 2016. I will write updates in red, to reflect this document.
I cannot access the official information on the compensation plan because the official website has no reference to it at all. This is still the case. If you were about to sign up to this ‘business opportunity’ you would be doing it based on what bloggers and Facebook members told you it was like. This must be concerning and a red flag. I would not take up a job or business opportunity where the only financial information provided was what some random people promised me on the internet. Especially when these people would profit from me joining.
This clause still seems to be active.
This is from this LTW website which looks official but has a different logo.
Relevant to any discussion on earnings is this statement from the ‘earnings and income disclosure statement’ from this website.
The highlight from this bit is where you are warned that testimonials you hear about are not representative and will not apply to the average purchaser. The ‘average purchaser’ presumably being those people that think they can earn money just by shopping with this company.
Let’s have a look at some of these websites that don’t seem to be official to see what they think the compensation plan is. We will apply this to the Average Purchaser.
First of all there is the £35 joining fee. It has been described variably as a one off payment, but also, on more than one occasion, it has been described as an annual fee. Without official information, it is difficult to tell. It is referred to as an ‘application fee’ on the official document, so it sounds like it is a one off payment.
So you join up and spend £35.
Total spent £35
Then you need to do some shopping. You need to get 100 PV points really if you want to make any money. 100PV means you have made the company £100 in profit. To do this in the cheapest way you would buy a ‘hamper’ for £165. This contains all sorts of things that you probably would not normally buy. But hey, it is cheaper to do it this way and you are in it for the business aren’t you? Not for the shopping.
So this arrives.
Great. Now you don’t need to buy any Yazoo for months. It was sent by Royal mail and took 3-5 days. You may well have had to go to the post office to collect it if you were at work when they tried to deliver it. You can’t take time off work to sit and wait for these deliveries. It will arrive in two heavy boxes. I hope you have a car to go and fetch it with.
You will be eligible for 2% commission on your shopping, congratulations! You will receive £3.30.
Total spend balance- £196.70
You would be eligible for team bonuses and a share of their money but you don’t have any downline yet. You have just started and wanted to see if it worked first.
You have managed to persuade your brother and a best friend to join LTW. You promised them a fantastic earning potential even though you do not know for sure that it will work out. You probably showed them pictures of people with big wipe clean cheques for £10,000 and told them that they could get that too. Did you tell them that the payment structure could change? Did you manage to find official details of what the payment plan actually is? Did you tell them that the average purchaser wouldn’t earn that?
You buy £165 of food again. So do your brother and best friend.
This arrives again. But you’ve not finished it all from last time! Better get drinking the Yazoo then. And then go proper food shopping because there isn’t enough there for a single meal.
Apparently you will get £20 for each person you sign up. There is no mention of this bonus in the official LTW comp plan.
And 2% on your shopping. And 1% ‘residual income’ from the money your brother and best friend spent.
Month 2 you get back £3.30 ‘residual income’, £40 sign up fee and 2% from your own shopping. you get £46.60 in payment.
Your total spend balance is now £315.10
Month three you have managed to persuade your neighbour into joining the scheme. Have you been totally honest with them about the ‘opportunity”? Would your brother and friend tell them how great it is or would they be objective? What information are you showing them to persuade them to join?
You order your hamper again. You go for a different one this time because you are running out of storage space for the weetabix and Yazoo. This arrives via Royal Mail-
Still nothing there to make an actual meal out of, but never mind. Some LTW people have suggested just taking it to a food bank. It isn’t about the products/wampum after all, it is about the business opportunity. Although I’m not sure what you would do with the lipsticks, blue nail varnish and perfume. Save them for presents maybe?
You make another £20 for persuading someone to invest in a scheme on the promise of future rewards. Nice one!
Meanwhile your brother and best friend have diligently spent another £165 on their wampum. Also they have persuaded a person each to invest money in the scheme, promising them future rewards for doing so. They get money for doing this and earn money from their shopping.
Luckily for you, your neighbour has immediately signed up her sister into the scheme. She promised future rewards in return for a payment. The neighbour and her sister pay their £200 each into the scheme.
You get paid more money. You get £20 for signing up your neighbour.
This chart is reproduced in the official document. It goes upto ‘infinity’ apparently. WOW!
You get 2% on your shopping (£3.30). You get 1% on your neighbour, brother and best friend’s shopping (£4.95). You also get 1% on the shopping from the people that they signed up. (£4.95). This totals £13.20 in commission.
Because you have now been the catalyst in persuading 6 people to part with £165 on wampum and you are at the top of a little pyramid you are eligible for a team leading bonus! Yay! This is for £200. Finally, this is what you have been waiting for.
This month you get paid a £20 sign up fee, £13.20 commission and a ‘senior star’ bonus of £200. Total income this month- £233.20. But you spent £165 on wampum.
Your total spend balance is now £246.90
This is you-
Ooh, hang on! You have been active now for three months! This makes you eligible for the pool!
If you don’t get 100 points one month, you get no pool money until you have spent 100 points for three consecutive months again. LTW illustrate the 2% pool as a pie chart. It’s just a small point, but that is not 2%.
LTW’s 2% Everyone else’s 2%
What does this actually mean? Do you get points so you don’t have to spend as much money? Is it actual money? Let’s assume it is actual money that you get paid.
You would have to know how many points were purchased and how many people were active.
Hmm, well, we know that there were 6650 people in LTW in Dec. Let’s pretend it is March.
Over that period of time there will have been a churn rate which means that 90% of those 6550 people will leave over the course of a year. This will equate to 1,474 people leaving over three months. They will be replaced of course so the overall figure will increase. How many of these will have spent 100 points ? Let’s be generous and say 80% have spent their required amount.
This means 4060 people are in the pool. We are told in March there are about 9000 people in LTW. Let’s be generous again and say 80% spent 100 points this month on £165 hampers. This means that £1,188,000 (and 720,000 points) is given to LTW. 2% of these points are added to the pool. This is 14,400 points. Presumably these are converted to £14,400 for sharing purposes. £14,400 divided by 4060 is £3.55.
By month three then, your Total spend balance is £243.35.
By month 4 you really need some different types of food. The only other available hamper for purchase that doesn’t involve trips to Saudi Arabia or drinking strange juices is this one-
I suppose you could have a tin of Heinz spaghetti for tea? Or rice with tinned tomatoes? It might be interesting to try different food from round the world. After all, it isn’t about the product / wampum is it? By now the people at the local food bank will be wondering what delights you have for them next.
You spend your usual £165. Your neighbour and best friend have spent their £165, as have their downlines. They haven’t recruited anyone else. Unfortunately though, your brother has packed it in. His wife was getting sick of all the false promises and is angry he has become involved in another ‘get rich quick scheme’. His best friend and downline has backed out as well.
Never fear though, you can get the residual income from your two downlines and their downlines. This will equate to £6.60. Don’t forget the 2% for your own shopping! Your ‘cashback’! Thats another £3.30. In total these payments add up to £9.90. And you are still eligible for the pool. That’s another £4.43 coming your way. You are not a senior star distributor anymore though so you won’t be getting your £200 bonus. I hope that doesn’t cause any friction between you and your brother.
By month four your total spend balance is £403.92
To get back up to the dizzying heights of senior star distributor you will need to recruit another person and persuade them to recruit a person under them. In the meantime you will need to be persuading your two downlines to get on with recruiting another two people and getting those people to recruit as well otherwise they won’t be senior stars. They haven’t had any £200 bonuses yet and might be leaving soon if you don’t keep on at them.
Does any of this sound like the adverts for this company?
No sales? No team building? No pressure?
Well LTW people, have I got it right this time? Has anyone been able to find me official confirmation of the payment structure? Are there any bonuses I have missed? I am not interested in hearing from the people who transferred over from another MLM with their 30 downlines and their instant qualification for all the bonuses because that is just not realistic. I have tried to portray here what would probably happen to an average purchaser who got involved in this scheme thinking all they had to do was buy their shopping and get a few others to do the same.
It would be great if some average purchasers could comment below on their experiences. Including any problems experienced. I think it is important to show the realities of this scheme so that people considering joining can make a considered judgement.
One more picture to end on. This graphic nicely shows where all this amazing money and £3.30 commissions come from.