New energy drink sales an investment opportunity



Some students at The University of Alabama are working to sell Verve, a new energy drink product with nutritional benefits, to the fertile consumer base of the Capstone.

Max Rubenstein, a junior majoring in psychology, has been working with Verve for about a month and has made roughly $400 by selling it to his friends and fellow students.

“Someone that I know back home from high school contacted me over Facebook message, something as simple as that, telling me about an opportunity, something that was getting large at Tennessee and thought that I would be a good person to get it started at Alabama,” Rubenstein said. “I Skyped with him that night, got enrolled immediately, texted around and within a week I had 11 people enrolled and then a week later we had 60 enrolled.”

The product is not sold in stores and instead grows via a multi-level marketing strategy, which gives incentive for individual sales from its brand partners like Rubenstein. In order to sell Verve and earn a chance to make your own fortune, you have to pay roughly $140 a month for two cases of the product.

“You have to treat this like a job to be successful at it,” Rubenstein said. “We’ve been making sure that people know when they get into this, that is not something that you just sign up for and then let things happen.”

Craig Armstrong, an assistant professor of management, said the business model makes sense for the person at the top.

“It becomes a multiplying network effect because the more people down-line you have, the more money the first rung gets. It’s like a pyramid scheme,” Armstrong said. “The potential downside is that there is going to be a limit to how far down the line you’re going to be able to get. You can get too many people involved in selling it.”

Armstrong also said it would easy to get caught up in the potential opportunity but that it was also incredibly difficult to make much money from it. Armstrong gave some advice to students who want to start their entrepreneurial careers in college.

“Be the first guy in, get as many guys to sell for you as you can, and then convince them to go find other people to sell for them,” Armstrong said.

But Vemma, the company that owns Verve, does not outline any potential risk in its pyramid-shaped business model.

According to the website, “If you are ready to achieve your financial dreams without any barriers, now is the perfect time to join Vemma as a Brand Partner. Simply choose your Builder Pack to maximize your opportunity so you can start earning immediate income. You’ll see how this tiny investment in your business is pennies compared to the huge earning potential this opportunity can afford you.”

Unlike in pyramid schemes, where no tangible product or commodity exists, Verve is a real drink. One of the most prominent endorsements of the Vemma brand of products is Dr. Mehmet Oz, Rubenstein said. The celebrity doctor says in a video on the Vemma website that his charity, HealthCorps, has received nearly $1 million in donations from Vemma.

According to a company press release, Vemma is growing rapidly, with 2012 sales sitting at $117 million. The release also said the largest sales growth occurred in the U.S. market, with a 46 percent increase over 2011, and that the U.S. market also saw an 85 percent growth in recruiting.

Vemma spokeswoman Lynn McGovern said the company could not provide an average amount that brand partners receive in compensation. However, a corporate fact sheet provided by McGovern said the business has so far given $500 million to its brand partners.

“In terms of average earnings, I cannot give you an exact figure as each Vemma Brand Partner is an independent contractor, and like any other independent business person, his or her success or failure depends on his or her personal efforts,” McGovern said.

 

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