Founded in 2008, the multi-level coffee marketer known as Organo Gold has managed to stir up a fair amount of controversy and heated debate. In as little as six years, the MLM has earned a somewhat notorious reputation and racked up at least 55 complaints, according to Federal Trade Commission records. The company allegedly makes inflated claims regarding the potential income members can make as independent distributors of the company’s wares. According to the complaints, the British Columbia-based marketer blatantly misrepresents the effectiveness and potential of its products.
The Goods In Question
The Vancouver, BC marketer deals in coffee and personal care products. Earlier this year a rather large debate began to percolate when Organo Gold announced a pending membership with the Direct Selling Association (DSA). The news was huge and immediately sparked a heated debate over the fact that the “who’s who” of direct sales companies (i.e. Mary Key Cosmetics, Herbalife, and others) are members of the DSA. For a company dogged by complaints and shadowed heavily by negatives words like “scam” and “sham” to hold a pending membership sparked a froth of discussion about the company’s credibility.
Pending DSA membership status is granted when the DSA is vetting the applying company to ensure that they operate in an ethical manner. The process usually takes about a year. And according to DSA spokeswoman Amy Robertson, the chances of approval are less than 50/50. Less than half of the companies that apply actually survive vetting and become approved members. In fact, many applicants opt to drop out when they realize their company is either disinclined or incapable to meet membership requirements.
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Is The Pending DSA Membership For Real?
There is no doubt that an approved DSA membership would bring much needed credibility to the brand, which has been plagued by negative complaints since its inception. In fact, it could be a turning point in regards to Organo Gold’s reputation. The question is whether or not the pending DSA membership is for real.
Interestingly, shortly after the story broke, and CBS MoneyWatch contacted the DSA to inquire about Organo Gold’s claim of pending membership, the DSA asked the MLM to remove all mention of the pending membership. Shortly thereafter, Organo deleted the DSA reference.
Legit MLM vs. Pyramid Scheme
We know that the self-labeled multi-level coffee marketer uses independent representatives to sell the company’s products. These independent reps earn income by purchasing products and then recruiting others to work as distributors. Although this appears to be the favored multi-level marketing business model, critics choose to describe Organo Gold as a “pyramid scheme.”
What’s the different between a legitimate MLM versus a pyramid scheme? In pyramid schemes, the operators take home the most profit by recruiting sellers. In a legitimate MLM, profits are more equally disbursed. Organo staunchly denies critics’ claims of their being a pyramid scheme, and holds that they are indeed a legit MLM.
According to a complaint filed through the Federal Trade Commission, Organo appears to be a pyramid scheme that baits sellers by promising thousand dollar returns on an initial out of pocket cost of $149. Complaints against the company grow even more dismal as many allege being charged for products that they never purchased, and then found it next to impossible to receive a refund.
The Better Business Bureau has approximately 39 complaints on record against Organo, all dated within the past three years. Based on the number of disputes and time it took to resolve them, the BBB has issued a C+ grade for the coffee MLM.
A New Development
Although the debate about whether or not Organo Gold is a legitimate MLM capable of delivering what it promises, the company shows no signs of slowing down. In a recent PRNewswire, the gourmet coffee company announced its launch of a new product: the singe serveBrewKupTM. According to the press release, Organo feels the new product will provide needed product options and versatility for their distributors and subsequent customers.
An MLM To Try Or Avoid?
There’s no denying that coffee is a hot selling product. The market is huge. Organo Gold denies wrongdoing and reportedly knows nothing about the stack of complaints lodged through the FTC. As one of the fasted growing networking companies in the world, they have operations throughout 32 countries and sales estimated at $170 million per year. In addition to marketing and selling coffee, tea, and hot chocolate products, they also sell an assortment of personal care items.
Is it a MLM worth trying? Based on the current string of percolating controversy, it might be best to approach this multi-level marketer with extreme caution and watch for future developments.