Whenever I see hype, it raises a huge red flag for me. It’s a sign of something that is driven by recruitment, and does not have a long term future. In the case of efusjon there was bucket loads of it.
The company began in 2008 and was formerly launched in January 2009. It experienced rapid growth until their Facebook Application Launch failed miserably and a lawsuit was filed against it by MLM attorney Kevin Thomson in late 2009.
The lawsuit was filed in an effort to get the company to change its business model to protect its distributors from promoting an illegal pyramid scheme.
Since then it has been on a gradual decline. In late August 2010, it sent this letter to its distributors…
Dear eFusjon Distributors:
It is with great sadness that we announce today that we must cease the direct sales multi-level marketing business of eFusjon, Inc. as of September 1, 2010.
The independent contractor distributor agreements will terminate as of this date. See Distributor Agreement, Section 7 (“The Agreement shall continue in effect between the parties hereto until either party terminates the Agreement…”). Qualified distributors will receive their last compensation check for the month of August, less offsets against any amounts that are owed to the Company, on September 10th. Any commissions due will be available in your “Hyperwallet” account until October 31, 2010, after which date you will need to contact the corporate office (to access your “Hyperwallet” account please go to www.efusjonpay.com, or contact customer service for assistance). The Company will send refunds of the $30 membership fee to those distributors who became members in August 2010.
This was a very difficult decision for the Company and not one we had hoped to make. When the owners started eFusjon in 2008, we envisioned a unique and successful MLM business with healthy and unparalleled beverage products. The goal was to market these products through independent distributors via the MLM direct sales business model. Distributor performance, however, has been steadily declining for over a year now, and as a result, so has the Company’s revenues. The Company can no longer maintain a marketing model that is not generating the funds needed to grow a viable business. In short, the Company’s MLM business model is no longer a sustainable marketing strategy.
With a certain level of optimism, we also announce today our decision to explore other opportunities for the eFusjon product many of you have come to love. For some period of time, you may continue to enjoy eFusjon products through purchases (without compensation) on the eFusjon website www.efusjon.com.
Lastly, we extend a sincere and heartfelt thank you to all of you for your dedication to eFusjon over the years and for standing by our product and the Company during the height of our success as well as through more recent challenging times. We share your disappointment about the recent turn of events, but are cautiously optimistic about the future of eFusjon and eFusjon’s unparalleled, healthy beverages.
With gratitude,
The eFusjon Corporate Officers
I’m writing my opinion not to condemn the company, but to educate.
This is a drum that I’ll be beating for many years to come because: I want people to be educated about this industry of network marketing and to choose wisely for their long term future.
This is another event that will ruin the aspirations of many people and leave them with a bitter aftertaste of the profession of MLM. It doesn’t serve our industry at all, but there are valuable lessons to be learned.
Time and time again, hyped up start up MLM companies with “revolutionary” compensation plans have proven themselves incapable of staying in business. And yet, the glitter, the dollar signs shine so brightly that greed completely takes over any common sense.
My mentors have taught me that whenever a company explodes and then collapses, it’s because of greed and ego.
efusjon came on to the scene competing in the bloated energy drinks market. The product wasn’t the first of its type, wasn’t really anything extraordinary, and it certainly wasn’t value priced.
The retail commissions were a joke. Distributors would have lost money if they tried to retail the product at recommended retail price, taking into account shipping costs.
Since you couldn’t retail the product, there was no other reason to get involved than to take advantage of the “revolutionary”, 3 x 15 forced matrix compensation plan. And to keep your position in the matrix, you had to order 48 cans of the stuff every month whether you wanted to or not.
The company had clear intentions to expand very quickly with an application that would exploit Facebook to tell the whole world about efusjon. That was promptly and rightly shut down by Facebook itself – the beginning of their decline.
The company never had a long term vision, and the people it attracted reflected that. People got involved in this to get rich quick.
Now it has suffered the same fate as the overwhelming majority of new MLM startups – it did not last the first 2 years.
If you want to build long term wealth in network marketing, don’t be blinded by greed and ego. Choose wisely. Find a true mentor with a servant’s heart…
To your MLM success,
Wayne Wu
P.S. I would love your input! If you have an opinion that would contribute to this discussion, please leave me a comment below.
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{ 40 comments… read them below or add one }
Wow Wayne, that’s a real eye opener. Thanks for sharing.
It can be lonely out there trying to dicpher the best options unless you have great people people around you keeping their eyes, ears and more importantly, their hearts open.
The only option for success in the business is a mentor and a team that REALLY shares and masterminds.
Thanks,
Roisin.
Hey Roisin,
Thanks for your kind support. If only people would take the time to educate themselves about this industry, they would have a lot more success. There are plenty of us out there willing to do that.
Hey Wayne,
Just posted on the same subject although my angle is a bit different.
To be honest with you sometimes I think people have to learn the hard way that there is no success without effort. No doubt many of the eFusjon crowd will be off looking for the next easy overnight promise. Hopefully enough others will have found some common sense.
~Marcus
Marcus Baker@network marketing internet business´s last [type] ..eFusjon Network Marketing Business Opportunity Closes – So What
Hey Marcus,
Yes, very true, especially for those who haven’t had the goodness of experience. If they stick with it, they’ll learn – the hard way (the only way?) – that there is no short cut. Unfortunately for those who don’t, they’ll go crying to their friends about how much of a scam this sort of business is. And yes, then there are the heavy hitters who will move to the next shiny thing and leave in their wake a trail of devastation.
Yep Wayne, how many more times is this going to happen?
There are a few things one can do to check if the business opportunity is OK – but how do you really KNOW that it will be a success?
I guess one way is to choose a company with real, useful products that you buy anyway…without them being part of a MLM.
That would be a good indicator for me – then commissions that I would be earning would be based on actual sales of an in-demand product, not paid on the recruiting of suckers who pay for an autoship of over-inflated priced products they don’t need nor want.
Stay inspired.
Michael
Michael B Wilbraham´s last [type] ..How easy is it to “take off” in Network Marketing
Hey Michael,
Yes, the product is the backbone of this business. It doesn’t have to be revolutionary, but it does have to be high quality and value priced and consumable. And yes, you’re absolutely right, people have to want to buy it even if there was no MLM.
But these things will happen because there are naive people who start these things. They don’t have the experience and they don’t have the leadership to get them through the rough waters. Always look at the leadership – make sure you have a good head on your shoulders.
Hi Wayne,
thanks for sharing this story. Well, I find the expression “MLM direct sales business model” pretty telling, even contradictory. Or am I mistaken ? MLM isn’t direct sales and direct sales isn’t MLM. I have to agree with Marcus that most of their marketers don’t have a clue what really happened to them and will probably fall prey to next over-hyped scheme. On the other hand, there’s no alternative to constantly educating folks about business models and their underlying motivators. Thank you for doing so Wayne.
Take care
Oliver
Oliver Tausend´s last [type] ..Lessons From Robert Kiyosaki’s “Cashflow Quadrant” For MLM Network Marketing Pt 3
Hey Oliver,
Thank you for your support my friend. I agree. MLM isn’t direct sales, and direct sales isn’t MLM. And it certainly isn’t get rich quick, but that was the image efusjon was creating. The timing was ripe to, the economy was, and still is in shambles, people are desperate, so they will fall for these things. I will do my best to educate people.
Wayne, I have just shared this on Facebook!
This a wonderful post and you are so right! You are a very good and clean writer, straight to the point and passionate and sincere! Love it! Which is why I have subscribed to you!
Too much hype in MLM, when individuals need to view it as a LONG TERM BUSINESS INVESTMENT!! There is one company doing the rounds at the moment…I shall mention no names, which I feel die the same death this time next year!!
Best,
Lavinia
Hey Lavinia,
Thank you for your support. A little bit of delayed gratification can go a long way. Perhaps I’ll contact you personally to find out what this company is.
Hi Wayne!
I remember the e-fusion launch and how many people were pushing it through social media. I agree that people need to really investigate the company they decide to join and look for a company that has a proven track record of growth and longevity. I know that there could be some potential benefits of getting into a start-up, but for me (maybe I’m just conservative) but I would much prefer to join a more established company that has been in business for 10+ years.
Heather
Heather C Stephens´s last [type] ..Social Media Tribes and The Power of a Network Marketing Team Online
Hey Heather,
Thanks for you input. I don’t think you’re being conservative, I think you’re being wise.
Well written. Well said. Couldn’t agree more. I feel compassion for the people who put their reputation on the line by endorsing the company to their friends. It happened to me several times over the years.
Hey John,
Compassion. That’s why I want people to know about these things. If you’re a wiser man from these experiences, that’s a good thing.
Hey Wayne,
Great review of what happened with this company, I have not been around near as long as many of you have and wasn’t really educated on this company. I do see where they went wrong though, this should be a read for anyone thinking of oining a “hyped” up company with a very low amount of years in existence!
Hey Robert,
Thanks for your input. Yes, to be on the safe side, join a company that has been around for 4 years or more. But if you insist on joining a startup, you have to make sure the company execs know what they’re doing. A lot of the time, people who start these companies haven’t got a clue!
Hello Wayne
Great recounting efusjon story.
One problem with many mlm’s is that there is no meaningful retail sales. If there is no opportunity for retail sales then all you are left with is recruiting a consumer downline.
Peter
Peter Fuller MBA´s last [type] ..Just Smile
Hey Peter,
Too right… Retail sales are the backbone of a network marketing business. Building a consumer downline is simply not sustainable.
Great review on the demise of yet another company’s online program. It’s a good reminder about how crucial due diligence is before committing to any business venture. Thank you for sharing.
Karen Newman´s last [type] ..Transitioning to a Career Online
I think it’s always sad to hear news like these, that MLM companies have folded their businesses. Now it’s eFusjon.
When companies fold, no more residual income for them. All distributors just have to start all over again. Wayne, you did a great job by providing the right education for networkers out there
Bro, I also agree with what you say too. There are really too much hype about eFusjon on their products and compensation plan. Then they boasted about their incredible Facebook apps. Some time then, eFusjon seems like a company that will never go out of business cos’ of their product and growth claims.
I wish all eFusjon distributors to be the best they can be. eFusjon have failed you, but network marketing has not. I believe you will make a greater comeback.
Ding Neng
Ding Neng´s last [type] ..Collapse of eFusjon – What’s Next For ex-eFusjon MLM Distributors
Hi Ding,
Welcome to my blog. Thank you for your valuable contribution. Great words – efusjon failed you, network marketing has not – thanks for sharing that with us.
The lesson we all need to learn here is understand what you’re getting into, because you can’t win a game you don’t understand.
Another MLM company demise! It’s sad that sometimes people get sucked into the hype that the new companies will do wonders for them and make them rich, and forget to do their due diligence.
Thanks for sharing.
All the best,
Mavis Nong
Mavis Nong @ Attraction Marketing Online´s last [type] ..Got Leads
Hey Mavis,
Thanks. A little due diligence can go a long, long way.
That’s why we should never put all our eggs in one basket.
Having a blog that generates leads and income is imperative; and that’s just one way to ensure that your income won’t cease with your company.
Thanks for keeping us updated.
Ana Hoffman
Ana @ Targeted Website Traffic´s last [type] ..17 Traffic Building Tips from Some of the World’s Most Popular Bloggers
Hey Ana,
I do know what you’re say… but I do have an opinion on this subject that I will be posting about in the next week or so
Wayne
A 3×15 forced matrix what??? Another thing why do companies what to try to compete with the health drink crowd. I mean they can go so far with these things there must something more lucrative out there. I’m guessing the people who funded the start up probably made out ok.
Steve Shoemaker
Steve Shoemaker´s last [type] ..Internet Marketing Tools Like TweetDeck
Hey Steve,
I’m not sure if the people who funded this did get so far – it doesn’t seem to be the case from that letter. For sure, energy drinks is quite a hip market right now, but the way they conjured up this thing was to try to expand as quick as possible. I can’t help but think the product was put there as a necessary evil.
Hi Wayne,
For those who wonder why this industry is so frequently thought of in a negative light and slated as ‘scams’ ‘pyramid schemes’ and so forth – the story with efusjon is a wonderful, shining example.
There will always be those flashing the ‘get rich quick’ signs, and those who follow them, unfortunately other legitimate MLM companies and distributors pay the price…
Cheers,
Jym
Jym´s last [type] ..MLM Blog- The Center Of Your Strategy
Yeah, especially in this economy where people are desperate. They will fall for these things. Get rich quick schemes always thrive in uncertain times…
This is the prime reason for wanting to develop my own products first before selling other peoples. if you can establish yourself first then any slide you might experience with other peoples products might be a little less rough on the way down. Well that’s the theory anyhow
I suppose what makes this example harder is the number of people that may never recover from the trauma of losing the “reality” they had built around themselves. A bit like divorce I guess.
Good luck with developing your own products, Dennis!
These are the very people that run around bloating mlm does not work. They infact ruin it for others because of their bad experience. Sad for them.
I’m so glad you have written this wayne it will help others know that yes mlm does work but there could be pitfuls in the COMPANY you choose to run with. People need to do their research on the company and the owners AND most of all make sure you own the list not the company!!
maria eves´s last [type] ..Changing the face of business
Hey Wayne.. great post once again.
Thanks for sharing this with us.. I do agree with Ana on the subject of having different income streams and not relying on one company when you can easily create several income streams that you have more control over.
I’d like to hear your thoughts on this..
talk soon
Hector
Hector Cuevas´s last [type] ..8 Tips for Writing Blog Comments That Get Approved
Hey Hector,
Yes, I will give my personal thoughts on this in a later post. Basically, my feeling is to set up one after the other in sequence. So build you home business income first, then invest that in something else like property to create an additional stream of income.
Hi Wayne,
This was a very informative post. You’re right, it doesn’t serve the network marketing industry well at all. It’s no good to leave many more with a bad taste in their mouths and horror stories to spread.
You also make a great point that people need to find a good mentor and educate themselves.
Great post, I really enjoyed it.
Susanna
Susanna Hess´s last [type] ..Online Marketing Inspiration- Do Thoughts Really Matter
Thanks for your support Susanna,
Hey Wayne,
That is why it is important to not solely get sold on hype. You see so much hype on social sites on companies. I know some people get sucked up on it. I would prefer to do business with companies that have stability and longevity.
Chat with you later…
Josh
Josh @ Generate Free Leads´s last [type] ..Who Else Wants to Increase Their Online Traffic
Stability and longevity also means half of the work is already done for you.
Hi Wayne,
I have no doubt there will be more letters like this being sent out to distributor of other companies over the next few years and beyond. The way that efusjon distributors went about business was a joke. I would get 10-20 emails a day promote this last year. Look for a company with a good track record and that has been in business for a least 3 years. Marcus Baker did a post a while back about the top 10 MLM companies and all of them were 10 years old or more. Great post and thanks for sharing.
Tristram Lodge
Tristram Lodge´s last [type] ..The Science of Thinking
10 – 20 emails a day? Wow! No wonder why Facebook shut them down real quick!