What happens when a Yankee (Brent Robinson) teams up with a Rebel (Scott Chandler)… You get an internet-based company called AutoXTen. Then add in an infamous online marketer (Jeff Long) and without a doubt you will drive short-term momentum through the roof. But… is short-term momentum enough?
Since I did the short editorial in my weekly MLM news report, I have been praised by some, and chastised by others. This is not about who is right and who is wrong when it comes to AutoXTen, it is about case law, and facts.
After talking with Scott and Brent, which by the way was very enlightening, I have come to the conclusion these two truly have been on the short end of the stick when it comes to picking the right network marketing companies over the years.
Their goal now is to create a company run “by distributors, for distributors” called AutoXTen. Sadly, in creating what they have deemed as “The Most Powerful Global Opportunity Ever Created”, they have fallen short of their vision, and if they do not correct the red flags below, within the next week or so, they could end up doing to their distributors, the exact thing that has happened to them over and over… leave them without a home and shattered hopes and dreams.
Let me say right now, I will not cover the compensation plan in this article. If in the next week or so, a competent network marketing attorney or consultant is not hired to review and tweak the compensation plan, then I will do a follow-up article to cover this specific topic.
Current Red Flags
1. No Policies and Procedures or Terms and Conditions located anywhere on the public site or back office. This one red-flag alone causes the distributors issues period! As it stands right now, the distributors have NO leg to stand on if there is any type of issue.
What I don’t understand is why guys, who have been hit with a string of company issues in the past where they feel the company has broken promises to distributors, would launch this way. But I also don;t understand how any distributor would join without some form of signed agreement.
2. No US based merchant account. The company is using AlertPay, which in and of itself does not raise red flags. But not having any form of merchant account based in the USA does raise concern of the business model and creditworthiness of the company.
3. The products marketed by AutoXTen are ONLY available to people who join at the $10 level. Since there is NO ability to market any product to a retail customer, the whole business AutoXTen business model falls under the FTC definition of a Pyramid. In other words this is a “pay to play” situation.
And since there are not retail sales, I would question the “Market Value” placed on the products. This is the same thing which got D.N.A and Narc That Car in trouble. The case law is very clear in this area!(See Below)
4. “Completely Eliminates Failure, and Turn one-time $10.00 into $10,000” These phrases are used on the website and could cause a couple of issues. First it may be seen as an enticement or guarantee, second it is not a one-time $10.00. The business model is designed to force an upgrade at every level. Which means, the distributor is paying out of “earned commissions” (income) additional money to have a possibility to earn $10,000.00.
Before you get your panties in a wad, I do understand the distributor is ONLY paying out of pocket $10.00 cash. But, based on FTC case history, this is a red flag.
And, when you tell people you have “eliminated failure”, then expect to be held responsible for those words. Sadly, there is NO way to guarantee anyone from failure. If that were possible I can tell you it would have happened centuries ago, not by AutoXTen.
5. Lack of complete Income Disclaimer and Compensation Plan document. The one line income disclaimer used in the videos and on the website is also a red flag. Due to the fact there is no document fully explaining in details the compensation plan, and the lack of a full income disclaimer, the company is outside of compliance.
Anytime a multi-level or network marketing compensation plan is used with 3 levels or more, then full disclosure must be available to the public for review before joining the company. In most cases the company will have a stand alone document, and also include it in the P&Ps.
In the case of AutoXTen these are completely missing. Yes, the videos are very informative, and come to think of it, the script would be a great place to start in creating the compensation document.
Well, there you have it. Until these and a few additional red flags are fixed both the company and the distributors are at risk.
I can say after talking with Scott and Brent, I do believe they want to make it work for the long haul. And if the distributors will do things right, and the company will correct the red flags, this company may just keep rocking it forward. Only time will tell for sure.
For anyone thinking about launching or using a direct sales channel to build their business, don;t do it on a shoe string budget! Hire a competent MLM consultant or network marketing attorney.
Living An Epic Adventure,