Yesterday afternoon I received an email from someone praising the just launched The Exponent Trading Company. Their recommendation was that I get in now because “there was a lot of money to be made from it for those who got involved early.”
I’d looked at the site and began writing a post about it for The Auction Rebel which I was going to finish today. That’s no longer necessary, because Terry Gibbs beat me to the punch and the opinions he expresses about it in ” Just Say NO To The Exponent Trading Company” pretty much parallel my own.
“………The Exponent Trading Company is basically just a eBay selling management solution wrapped up in a multilevel plan. This is done in order to get people excited about getting something for nothing.“
The MLM approach to eBay and on-line auctions has been tried before and it failed miserably. Will anyone make any money from The Exponent Trading Company? Probably for a short time. But it will be the very experienced MLM people who have already developed huge down-lines from other MLM programs and those who currently write about eBay that will plug any eBay opportunity that comes down the road as long as the affiliate pay out is large enough.
If you are even remotely thinking about getting involved with The Exponent Trading Company consider this:
- No matter what anyone tells you, it takes work to build a successful full-time or part-time eBay business
- It takes even more work, and a special kind of person, to build a successful full-time or part-time MLM business
- If you are working hard at building an eBay business, devoting part of that time and energy toward building a completely different type of business, will only dilute your chances of succeeding with eBay.
I agree with Terry - Just Say NO To The Exponent Trading Company.
The only thing beneficial about this opportunity is that, over the next month or so, you are going to have an opportunity to see who is really interested in helping people succeed on eBay and who the “affiliate sluts” are.
By the way, at the end of his article, Terry is offering a free copy of his excellent book about eBay consignment selling. If you are at all interested in this aspect of eBay, I recommend you grab a copy. It’s totally free, not even an email address required. All he asks is that if you like it, and use it, you make a contribution to The Shriner’s Hospital Network.
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June 27th, 2007 at 9:55 am
Gary,
I bet I got the same emails about this next great thing
I also feel strongly that “The Exponent Trading Company” is more MLM pie in the sky and not for the average person looking to build a viable eBay business!!
I’ve dabbled in MLM, and while I’ve had marginal success at best, it required LOTS of work!!
It’s not for me!!
June 27th, 2007 at 2:54 pm
Hi Gary.
Terry has a right to his opinion but he has factual errors in his post. And the errors are so glaring that it seems to me that he didn’t throughly check out Exponent Trading before bashing them.
I responded to Terry’s post on my blog if anyone would like to read a different point of view:
http://www.whatreallysellsblog.com/
James
June 27th, 2007 at 8:25 pm
Hi James,
I’ve read through everything on the Exponent Trading website twice, Terry’s review, and now your blog post, and I still see no valid reason why I would ever touch this program.
In my opinion, this is first and foremost, nothing but another new MLM program. Here are just a few of the things I’m basing my opinion on:
1. While their video does provide glossed over, somewhat optimistic pitch for eBay, Craig’s List, and consignment selling, once it gets down to talking about how someone can make money, it’s 100% MLM. There’s nothing about eBay.
2. Why in God’s name would anyone in their right mind pay $80 a month (the way I read it, it’s not $60 as Terry says, but rather $80) plus a commission to sell their own stuff on top of eBay and PayPal fees?
3. The video mentions 100+ years of direct marketing experience founders have. Nowhere does it say anything about how many years eBay experience they have. I take that to mean either they have no serious experience, or eBay is not the focus of the program.
4. The video talks about residual income and the site itself talks about passive income. I don’t believe either of those terms is applicable to selling on eBay.
5. On the Our Leaders page, they present nine people. Only one of them appears to have any real experience on eBay. The rest all seem to have MLM and/or direct marketing backgrounds. That tells me a lot.
As stated in my original post, “The MLM approach to eBay and on-line auctions has been tried before and it failed miserably.” In each case, the primary reason has been that everyone involved was more interested in signing up people underneath them than they were in selling on eBay. Exponent Trading will fail for the very same reason.
I like to believe that I’m a pretty open-minded person, and somewhere down-the-line someone may provide some information that makes me rethink my opinion on this and change my mind. But until then, not only wouldn’t I recommend it to anyone, I would recommend they stay completely away from it.
All in all, in the end, it’s all just my three cents worth. But I offer it with no secret agenda nor any personal product of my own that would be in competition with Exponent Trading.
Gary H.
June 27th, 2007 at 9:16 pm
Hi again Gary. I’m still in the information gathering phase so your insight is very helpful.
Terry mentioned $60.00 monthly fee and now you say it’s $80.00. Gee I hope not! Can you tell me where you’re getting that number from? My understanding is the monthly fee is $20.00.
James
June 28th, 2007 at 1:05 am
I’m not to sure about Gary or James’ math skills, but I can do simple math in my head.
30% of $200 a month in minimum personal trade volume is sixty dollars.
Maybe Gary and James are seeing a monthly fee of $20?
That would be Gary’s $80, and James $20.
My impression is the $60 is the commission.
There are also yearly renewal fees, and other minimums your downline must meet before you get paid commisions on their payments.
While I am a GENIUS - that’s capitalized like the word GOD or IVES - I think Gary and James are as bright as I am. So if we cannot agree on the total cost and benefit, who can?
(James called me a genius earlier on his blog:
http://www.whatreallysellsblog.com/?p=61 )
Gary and I are saying the benefits whatever they may be are less than the cost whatever they may be.
James is saying Gary and I are being too quick to pass judgment, and we should give it some time. Let them actually produce some eBay selling videos and get their listing thing to work and maybe it will be a good deal.
I can’t speak for Gary, but I think they’ve gotten so caught up in selling the opportunity, they have forgotten the eBay training aspect. Based on that observation, I doubt whatever they produce will meet even my low standards. I say low standards because I spend very little time making my materials pretty. I concentrate on only two things - the information itself, and accessibility of the information.
Terry Gibbs
June 28th, 2007 at 1:08 am
Hi James,
I’m basing the $80 figure on the following:
I become a Trading Agent and pay a monthly service fee of $20. (I’m guessing that’s the $20 monthly fee you are talking about.)
However, it sounds to me as though I have to maintain monthly eBay sales through the program of $200 to qualify and maintain that position. Of that 30%, or $60, goes to Exponent Trading for distribution to my sponsor and their sponsors - ad naseum. (I’m guessing that’s the $60 monthly figure Terry is using.)
If I add those two figures together they equal $80, the figure I’m using. Actually, it’s more than that because sales volume over $200 a month is commissionalbe also, just at a lower rate which isn’t specified that I see.
So the more I actually sell, the more it costs me each month.
I look at this and what I see is an eBay trading assistant (Exponent Trading) who has taken the concept to the next level. They don’t even list the item as most TAs do. What is in effect taking place is that I’m consigning all my inventory to Exponent Trading to sell for me and they are making me list the item, answer customer questions, take the pictures, handle any shipping, etc. In other words, I do all the work, but they still collect their consignment commission.
Does that make one bit of sense? Certainly not to me. I may have fallen of the turnip truck, but it wasn’t yesterday.
I’ve gone back and watched the movie and read the site a third time, and every time I do so, it gets uglier and uglier.
Gary H.
June 28th, 2007 at 5:15 am
I got some information from people who joined. It’s good to know people.
Pricing is $300 membership fee, plus $20 a month, plus 30% of first $200 in sales. Then 5% up to $1000, and 2.5% above $1000. (This is from multiple sources. I don’t know exactly what they signed up for, but this is what everyone who joined thinks they paid.)
So Gary was right, but none of us saw the $300 fee to join.
I got some other comments from actual people who signed up and have been inside:
Ebay Sales training seems to consist of recommendations to purchase books? I don’t know what books. Probably not mine.
There is also a promise of future training conference calls and videos. One person mentioned viewing videos, but said they seemed to be geared towards how great the system is rather than teaching anything usable.
The management system is a simple affair with no ability to insert HTML into your auctions - No centered text, no links to your other auctions or me page.
Currently people are listing items with the system and then revising the auctions on eBay to get HTML.
Shipping is through UPS only. System doesn’t support USPS.
To me the system sounds like something someone who knows nothing about selling on eBay would design.
I still don’t know about the money aspect. I mean payouts. A large portion of the membership fee must be split among the upline. I did hear something about 20% of the first $200 being split among the upline. I don’t know the splits.
For those that think this is still a good idea because of the promise of those splits consider this.
Retention. The average membership website has a monthly fee of $20-30 and manages to retain it’s members for about 3 months. With a $300 initial investment people will probably stick longer. Maybe six months while they chase a return on their “investment.”
I’d have to know the exact splits to figure break even, but don’t. Oddly this number isn’t anywhere I can see and no one who knows it has said it.
That would be my first question if I were to jump in. “How many people do I need immediately below me to break even?”
Terry
PS as for Gary’s last comment about consigning all his inventory. The principles are telling people to just do $200 a month on the eBay account tied to their system and then sell the rest with other accounts. This way they get the 200 minimum to collect from your downline and don’t have to go through the hassle of using the system or pay the fees.
June 28th, 2007 at 9:37 am
I also have checked this Exponent Trading thing out…like I said before, it’s full on MLM, which isn’t a bad thing!
The compensation is based on “getting others to join” (MLM) and not actually selling products!!
(they can’t be calling that video a viable product, can they??)
If it walks like a duck, and quacks like a duck…it ain’t a buffalo!!
There is nothing wrong with MLM, but folks don’t say it up front, they try and make it look like something else which I thinks makes people think something is “fishy” is going on.
I’ve been involved in a few MLM programs and I actually made some good $$$ with a couple (they said right up front it was MLM, and they ALSO had a great products)
I currently have a nice eBay consignment business, so I ask myself, “what is the benefit of The Exponent Trading Company to me??”
Why would I join a “service”, and pay additional monthly fees for the “privilege” to pay out a commission on merchandise that I’ve gone out and found, photographed, wrote descriptions on, listed and sold??
Where is the fiscal responsibility in that??
I try and keep my overhead low and paying out additional fees seems totally unnecessary!!
June 28th, 2007 at 11:30 am
I’m not sure exactly who Terry is referring to in the PS to his last post when he says “principles”, but if people who sign up are being told ” to just do $200 a month on the eBay account tied to their system and then sell the rest with other accounts. This way they get the 200 minimum to collect from your downline and don’t have to go through the hassle of using the system or pay the fees”. that pretty much says in a nutshell what Exponent Trading is all about, and it certainly isn’t eBay.
They aren’t promoting it as an eBay opportunity but rather as a MLM opportunity.
In the imortal words of Stephen, “If it walks like a duck, and quacks like a duck…it ain’t a buffalo!!”
Terry, I also find it interesting that although some people are “putting the heat” on you and making some accusations about your motives, none of them, that I see, are answering the questions you pose. I though Skip McGrath’s post on his blog was particularly uncalled for. Then he goes on to say, we don’t know all that much about it yet, but sign up under me. I wonder which category that puts him in?
Gary
June 28th, 2007 at 12:20 pm
Gary, Terry, and Stephen, you guys bring up some excellent points. Thanks.
Gary, I did answer the question Terry posed in his original post about what benefit ET brings to the table. It’s in my blog post. You may not agree with my answer but I addressed it.
As for the cost — you make it sound like there’s an $80.00 per month charge to be in the program. It’s $20.00 a month. You’re not paying $60.00 to the company. They take that out of your earnings but if you have no sales in a given month you would not own $60.00. If you get in the program and do nothing you are charged $20.00 a month. If you are also signed up as a Trainer (which is optional) you are charged $100.00 extra a year.
I would also like to know who said, “The principles are telling people to just do $200 a month on the eBay account tied to their system and then sell the rest with other accounts.”
If I were currently doing Consignment Sales I would not sign up for this program. I see it as a way for beginners to get in and get trained for a LOT less then some of these ebay Training programs that I have been approached to sell — which I declined — that costs several thousand dollars.
I do feel there is a hole in the market that comes from people not knowing what to do after reading the courses and ebooks. They get stuck on “what do I do now” and I think ET COULD be the product to feel that hole.
Whether it actually lives up to that expectation is another matter.
If this turns out to be just another MLM bait and switch then I’ll fire up my torch and bring it to the witch burning party.
I’ll give them til September, and then decide if this is something I want to continue with and promote or not. But, for now, I’m just going to set back and see what happens.
Thanks again Gary. I enjoy your blog and appreciate you allowing me to express my opinions here.
June 28th, 2007 at 2:40 pm
Gary,
Am I ashamed that I am able to both protect my readers from harm, and attract new like minded readers?
While Skip thinks I should be, I am actually PROUD of it.
This is called being good at what I do.
I’ve spent years honing my skills. As long as I use them in an ethical manner I have nothing to be ashamed of.
As for me knowing nothing about this, I can read, and I can even think.
I said in my original article:
“The Exponent Trading Company is basically just a eBay selling management solution wrapped up in a multilevel plan.”
Well now I know more about it and can say what it really is.
It’s a MLM pipe dream with a eBay selling management solution laid on top of it in order to meet minimum federal standards about pyramid schemes.
If it was an eBay management tool the principles wouldn’t be telling people to only do $200 a month in sales through the system.
Terry
June 28th, 2007 at 4:33 pm
I also talked to Jan Johnson (their corporate trainer). She went on and on about how special they were, how eBay “allowed” them into their computers and they were able to launch auctions. After listening for awhile to this “we are the only ones doing this”, I asked whether this was the eBay API, which thousands of vendors use? There was silence on the other end of the phone.
I had been involved in something similar before (which is dying a slow death), FoundValue.com
Very similar, but not as scammy and all the fees and no substance.
I mentioned about consignment selling, and was told, “oh no you don’t want to do that, you can’t make any money doing that”. To which I replied that it was right on their website, to which she replied, “oh you can do that if you don’t have things to sell, but we are de-emphasizing that”.
All of the principals seem to be from Excel Telecommunicatiosn, which looking at ripoffreport.com shows as having all sorts of problems and issues.
A LOT of fees, no substance,
and then only 1/4% commission on your downline sales, that is going to add up to NOTHING, nil… nada…..
I think the 7th level gives you 10% ??? Why all the way down there…??
This whole things smells badly, I would be very very cautious, and wait and give it a year and see what evolves, and see if they still exist…
Good Luck.
If it seems like it is too good to be true, guess what????
June 28th, 2007 at 4:46 pm
Geeze…this thing sounds so “secret” and hard to understand, I’m surprised ebay isn’t pitching it themselves!
June 28th, 2007 at 5:39 pm
Wow, they just launched this week, and already have Global Trading Directors, Presidental Directors, an whole page of people who supposedly have done mega with the business, and for a business that is only a few days old… Very interesting….
Must be old Excel Telcommunications Cronnies…
They supposedly just got the Auction Launcher working yesterday, so how did these people get their volume????
Sounds like the typcial pyramid scheme, a lot of hype, make it sound too big to be true (and it actually is…) get a bunch of people to spend big bucks, then fold when things start falling apart.
June 29th, 2007 at 2:51 pm
steve49 Says:
June 28th, 2007 at 4:46 pm
Geeze…this thing sounds so “secret” and hard to understand, I’m surprised ebay isn’t pitching it themselves
Now that made the coffee come out of my nose Steve…thanks I needed that laugh today more than you know..
all the best,
Doc
June 30th, 2007 at 9:33 pm
I just saw this complaint about the exponent trading company:
Craigslist expressly prohibits paid posting agents.
Can I post ads on craigslist on behalf of others as a paid posting agent or posting service?
Absolutely not - acting as a Posting Agent is forbidden by our terms of use.
From the Craigslist FAQ:
http://www.craigslist.org/about/help/faq#repostForProfit
Huh?
July 1st, 2007 at 9:49 am
I have only 2 words for this ETC ‘opportunity’
Marketing scam
If you know anything at all about online auction sites like ebaY you will see that ebaY selling is in serious trouble…so much so that
-the longtime online discussion board OTWA.com (which is home to a lot of very seasoned ebaY sellers and was a wonderful resource for ebaY related information) just closed itself to any new posts as of July 1st 2007 and it’s old content is scheduled to be taken down on July 8th.
- discussions at OTWA.com, powersellersunite.com and pheebay.com show that a lot of ebaY sellers are doing poorly with their auctions
-the Kovels (Ralph & Terry) latest emailed newsletter (dated June 28th) is discussing not only how eBay has seriously hurt the real world venues of antique malls, flea markets, collector shows, etc but that several dealers thing collecting is dying
-the August 2007 issue of Consumer Reports says in a surver of their readers who used ebaY to buy something says that approximately half of them felt they had been defrauded/victimized in an ebaY transaction…would you be enthusiastic about buying from a source where there was a 50/50 chance your deal would go horribly wrong?
Now add in the some facts about the auction consignment business
-Ina Steiner of auctionbytes.com’s latest (May 2007) survey of people running auction consignment businesses with physical locations says that their profitability is “elusive” (the full story is available at http://www.auctionbytes.com/cab/abu/y207/m05/abu0190/s02)
-anyone with a pile of things to sell can either take a chance and sell them himself/herself on ebaY.com, or check ebaY.com for a list of ebaY trading assistants or even consult Ina Steiner’s consignment seller’s list at auctionbytes.com. There are also other online venues at which goods can be sold (Amazon.com, half.com, Craigs List, one’s own website) or disposed of (freecycle, etc)
Now given these facts, why on earth would someone use an ETC seller much less sign up for ETC themselves?
July 1st, 2007 at 4:26 pm
I don’t think eBay is dead. Far from it.
Yes, there has been changes in the collecting fields, but the Kovels are wrong to place the blame on eBay.
Antique malls and stores suck. The majority of the items in an antiques store at any one time are overpriced. This is because people like Gary, Stephen and I remove anything that is under priced within days.
So what happens?
People go into these stores and see the same overpriced every time. Because the average shopper doesn’t understand the good deals are there, but it takes timing, knowledge and luck to find them, he stops shopping there.
And why should he shop there when he can find anything he wants on eBay.
As for collecting dying, this is just as well thought out as chicken little claiming the sky is falling.
The truth is people’s tastes change. This causes collectors to move into new areas, and sell off older collections to raise cash.
Also, eBay has greatly improved the liquidity of many collectibles markets. Items that were once considered rare are available regularly on eBay.
The truth is much of this “rare” stuff should never have been considered rare in the first place. We just didn’t know enough about the market to see how common these items were.
For a collector this new information and the lower prices is a good thing.
For someone who considers his collection a part of his retirement portfolio this is extremely scary. These “investors” are exiting the market, and pushing prices down faster.
As a collector I am changing the way I am buying items. In the past I would have accepted lower grade items. Today I’ll wait until a really nice one comes along. It will probably be cheaper too!
The reason the consignment drop off stores are hurting is because they do a poor job of selecting locations, and they do an even worse job of selling their services.
I say poor locations because they are placing stores based on the cost of the unit, rather than the surrounding area. They are in lower middle class and poor neighborhoods.
Here’s a tip if you’re thinking of opening one of these stores. Find an area where there are NO check cashing and payday loan places nearby.
Another reason these drop off stores fail is the owners don’t know enough about marketing their businesses. To make it worse, they don’t improve their marketing skills. Instead, they blame their lack of success on eBay.
Terry Gibbs
July 2nd, 2007 at 12:25 pm
Excellent points Terry. One thing I have found is that eBay by it’s very nature has exposed price fixing in many collectibles markets.
You see a lot of supposed “collectibles” that have Price Guide prices well above the price that any collector would really pay. Those items on eBay won’t even command the wholesale price because in actuality the market has a glut of these items and few buyers. eBay has allowed the marketplace to set the true price of these item.
A couple of years ago I was “given the opportunity”
to sell some Nascar collectibles for a church who had been left the items in a will. I ordered the Beckets Price guide and then compared the prices with what was actually selling on eBay. The results were very eye opening. You would see a Price Guide price of $30.00 for a certain 1:64 scale car and the same car on eBay was lucky to sell for $3.99. Over and over again I saw the same thing: The Price Guide price was a fantasy.
I ended up selling them in lots of 5 cars and finally got ride of them that way. What a pain in the butt that was.
Terry, I think you had a similar experience with Collector Plates didn’t you?
CGSerin posted almost the exact same comment in my blog. You can read my response to his here:
http://www.whatreallysellsblog.com/?p=61#comments
July 2nd, 2007 at 4:13 pm
James is talking about price guides.
I know people who write price guides.
Some of them write books and the publisher adds prices because it increases sales. Dave Macenfarter for example. His books are great for the material, and the prices were based on survey of collectors.
Dave is a really knowledgeable collector who is a great person to ask about anything relating to prewar trains. I’ve never met Dave, but exchange emails with him frequently.
Some of them write books because they are students of the collectible and include prices as a guide. This is done mainly so there is a basis for comparison between items. (It also increases sales.) This would be someone like Paul Ambrose.
I have Paul’s books, but have only talked with him a few times because Paul and I don’t collect the same items. I used to talk to one of Paul’s coauthors - Harry Lovelock - frequently before he died. That’s probably why I never got to know Paul.
Then there is the third kind of guide author.
Someone like David Doyle. Doyle asked me to provide material for his prewar Lionel book, and I refused. Other than that one email contact I’ve never had any dealings with him. Doyle cannot answer questions or discuss the trains. There is no reason for me to ask his opinion.
Doyle knows people buy price guides so he “writes” price guides. I place quotes around the word writes because Paul Ambrose is suing Doyle for copyright infringement.
I’ve seen Doyle’s books. With the exception of the areas he copied from Paul, the content is worthless.
What I mean by the content is worthless is an advanced collector, or someone who wants to learn more about the trains, cannot learn from the books.
Here’s a link to the lawsuit material:
http://www.ambrosebauer.com/copy.php
That’s interesting reading.
I was thinking I’d buy a copy of Doyle’s book and then have Paul autograph it for me. I bet I’d have fun selling the book on eBay.
Terry Gibbs
July 2nd, 2007 at 10:08 pm
I’m not going to mention his name, but I know a dealer out of Minneapolis who sells antique advertising items, most tins, almost exclusively. He and his wife have been doing the antique show circuit in the mid-west for thirty plus years.
About twenty years ago he wrote three price guides - one about tobacco tins, one about food related tins, and one about medicinal tins. Over the years they have all three be up-dated several times.
Each book is well written, and well illustrated, but he attributed some “creative pricing” to many of the items in the books which has pretty much made both him and his price guides a joke among dealers and collectors in the advertising trade.
His pricing of tins that are considered common was pretty much true to the market. It was beyond that that he became creative.
Tins that most dealer/collectors would consider scarce, he jacked the prices up to nearly double what they normally sold for, and he priced his inventory at just a little under the inflated prices in the book.
If a potential buyer questioned the price he had on one of these tins, he would pull out the price guide, and show the potential buyer the inflated price in the book.
For the really rare tins, he took the opposite approach. He priced them at between thirty and fifty percent of their true market value.
His thinking here was that if someone walked into the show with a rare tin to sell, he could pull out his price guide, show them the deflated value, and then offer them twenty five to fifty percent of the value shown in the book. If he was able to buy it, he knew he could quickly peddle it to a knowledgeable collector for a nice profit.
He and his wife are still doing shows (I saw them in April at the Antiques Spectacular Show) and he still has all three price guides behind their tables, waiting for the next gullible person to come along.
Gary H.