Vemma was founded in 2004 by BK Boreyko and is based in Arizona, USA. The company offers a line of energy drinks and other health-related products.
The Vemma business model is multi-level marketing (MLM), where distributors earn commissions not only on their own sales but also on the sales made by their recruits. This model has been criticized for creating an over-reliance on recruiting new members rather than selling products to end-users.
Vemma's products include energy drinks, protein shakes, and other health supplements. The company claims that its products are high-quality and made with natural ingredients.
Recommended read: Bega Dairy & Drinks
Business Structure
Vemma was a multi-level marketing (MLM) company that operated from 2004 to 2015. It was founded by BK Boreyko.
The company's business structure was designed to reward distributors for recruiting new members and selling Vemma's energy drink and other products.
Vemma's compensation plan was based on a binary tree structure, where distributors earned commissions on their downline sales and recruitment efforts.
If this caught your attention, see: Family Office Legal Structure
Distributors could earn up to 50% commission on their sales, and up to 10% on the sales of their downline.
The company's compensation plan was complex and involved multiple levels of commissions and bonuses.
Vemma's business structure was criticized for being overly reliant on recruitment and not providing a sustainable income for most distributors.
A fresh viewpoint: Diamond Comic Distributors
Products and Services
Vemma had four product lines, all based on their core Vemma nutritional formulation: Vemma, Verve, Bod-e, and Next.
The name "Vemma" is an acronym representing: vitamins, essential minerals, mangosteen, and aloe.
Several of the company's products contain caffeine, with some drinks in the Verve line being similar in caffeine content to energy drinks.
The "Verve" line was one of the official drinks of the Phoenix Suns, which also acted as a distributor.
Regulatory Issues
Vemma was fined €100,000 by the Italian consumer protection agency in 2014 for operating as a pyramid scheme.
The FTC launched an investigation into Vemma's practices in 2015, alleging that the company was a pyramid scheme and that its marketing materials were deceptive and misleading.
Expand your knowledge: What Is a Pyramid Scheme
Vemma was ordered to pay a US$238 million fine as part of a settlement agreement with the FTC in 2016.
The FTC accused Vemma of misrepresenting that its affiliates could earn substantial income, up to $50,000 a week, and of giving its affiliates promotional material with false and misleading representations to recruit new members.
Vemma's CEO, Benson Boreyko, and distributor Tom Alkazin were named as defendants in the FTC's lawsuit, along with the company and Alkazin's wife, Bethany.
The company's assets were temporarily frozen by the court in 2015, and a monitor was appointed to oversee its business.
Vemma was required to restructure its compensation plan and forfeit certain company assets as part of the settlement agreement with the FTC.
The Alkazins were fined US$6.7 million as individuals as part of the settlement agreement.
Vemma was banned from involvement in any pyramid, Ponzi, or chain marketing schemes as part of the settlement agreement.
Here's an interesting read: Federal Trade Commission V. Vemma Nutrition Company
Frequently Asked Questions
What are the ingredients in Vemma Verve?
Vemma Verve contains a blend of natural ingredients including carbonated water, fruit extracts, and plant-based nutrients. To learn more about the specific benefits and functions of each ingredient, please refer to our detailed ingredient list.
Featured Images: pexels.com
