Three months ago I promised you I would review Exponent Trading in September.? I wanted to give them some time after their launch to see if they appear to be a legitimate company or just a MLM scheme.?
First off, for those who don’t know, Exponent Trading is a Network Marketing Company centered around selling on eBay and CraigsList.? When you sign up to Exponent Trading you get access to an auction launcher software that supposedly automates much of the listing process.? You also get access to some training materials (more about that later) and of course you have the opportunity to earn money by recruiting others to sell and ebay and helping them with their business.
It sounds like classic MLM but there is an interesting difference:? With most MLM companies you buy some product or service and recruit others to do the same.? ? The promise is usually something like, “you’re already spending money on long distance (or dog food, or vitamins or whatever) you might as well buy it from yourself and earn a commission and then you can show others how to do the same and earn a commission from their purchases as well.”
It sounds like a great idea.? But, as you probably know it rarely works as promoted.? The commissions are so paper thin it takes 100s of people for you to earn even a part-time income.? The products are so over priced even with your discount you’re still paying more for the product then regular retail.? The drop out rate is huge so you’re constantly having to find new people to replace the ones that don’t make it.? And since the focus of the business is almost always on the recruitment of new members the core business itself suffers a slow death because no one is focused on the actual mechanics of running the business.?
Exponent Trading appears to be? different:? Instead of spending money to buy a product, members EARN money selling stuff on eBay and Exponent Trading takes a percentage of the revenue received to fund the commissions.
But, what exactly is Exponent Tradings role?? Why would anyone want to use Exponent Trading to sell when they can go directly to eBay and save the commissions?? (which are 30% of the first $200.00 sold and a declining percentage for sales over $200.00)
The idea is that Exponent Trading will provide 3 things:
1) The tools to help you list your items.
2) Continuing training to help you with your business.
3) Access to (or at least training to help you find) products to sell.
Let’s see how Exponent Trading has done in those 3 key areas three months after launch:
1) The Auction Launcher tool.? This is the tool that you use to list your auctions.? When I first tested the tool three months ago I thought I was using a prototype of the tool.? ? It was extremely basic.? No HTML. Only 3 and 7 day auctions.? No listing enhansements offered.? You had to ship everything by UPS.? If you wanted to change anything you had to go to ebay and edit the auction.?
So now, three months later has it improved?? I logged in yesterday for the first time since July and I see no noticible difference in the tool.? ? I don’t think they have made any improvements at all.? The ONLY reason ANYONE would want to use the Auction Tool is so the sales can be tracked so Exponent Trading will know what commissions to pay.?
2) Continuing training to help you with your business.
The ebay related training materials are a joke!? Exponent Trading has a couple of videos about titles and descriptions. That’s all they have now and that’s what they had when I joined three months ago.
3) Access to products to sell or at least training to help you find products to sell.
They have a 7 minute video about consignment selling.?
Now, they also have training teleseminars every Saturday.? I attended one and the focus was 90% on recruiting people NOT on selling products on eBay.?
About a week after I joined Exponent Trading I emailed one of the leaders and asked her some questions.
I’m going to print her answers verbatem because I think it will allow you to better understand what Exponent Trading is really all about…? but, I’m not going to print her name because frankly I think some of her answers are incriminating.
My questions are in Bold, her answers are in italic and my follow-up comments are also in bold.?
Question 1:
How exactly does Craigslist fit into the exponent model?? I don’t see any way of tracking sales of exponent agents through Craigslist since there is not a centralized payment processor.? I heard on the call that agents are supposed to report their Craigslist sales but a) I don’t see any mechanism to do that and b) since the tracking is on the honor system the only reason anyone would report a sale is to use that sale to qualify for PTV.? Once the PTV requirement is meet (which as I understand is $100.00 per month for trading agents) they will realize that all they have to do to keep 100% is to not report the sale.? And it doesn’t affect their organizational earnings.
ANSWER 1:
a.? You are right that agents report their earnings on the honor system through Craigslist and that the only reason to report them is to qualify for their earnings below them.? The honor system does entail them filling out a sheet indicating who the purchaser is, etc. These sheets are subject to IRS audit so if someone forges them they will be subject to IRS audit etc and if discovered by Exponent risk losing their position.? b. Once you really get a handle on how huge the numbers become (as far as how many people end up in your group)it will become apparent that anything? more than the $200 per month in trades really doesn’t matter to you.? Let’s talk about the $100.? A trading agent is a new agent who has no team.? The new agent is only required to trade $100 until they have 4 people under them.? Therefore, until they actually HAVE a group that will be trading as well they only have to trade $100 per month.? We of course will be teaching and encouraging all of our agents to trade $200 regardless.? Now, once a new agent has 4 people trading and a few of those get people they will be missing out on potential residual if they don’t trade $200.? They don’t HAVE to trade $200 but they will miss out on their monthly money if they don’t.? I know you got this since you were on the training, but to reiterate. Let’s say someone (Bill) sponsored 4 people, who sponsored 4 people, who sponsored 4 people, who sponsored for people.? That would be 256 people on Bill’s 4th level.? If all of those people (just on his 4th level) traded just $200 per month then Bill would get 10% of all those trades.? 256 x $200 = $51,200 x10% every month.? That’s $5,120 per month.? All Bill has to do to earn that $5,120 per month is trade $200 per month himself.? I am sure that Bill will do whatever it takes to trade $200 so that he doesn’t miss out on the $5,120 per month.
Bill may even? sell a $400 item for $200 so that he doesn’t miss out on $5,120.? That’s good business sense for Bill.? And you (who happen to be above Bill) don’t really care that he is only trading $200 because you have the same scenario going on. You also don’t care that Bill sells his $400 item for $200.? The whole model is based on that $200.? That’s all we care about.? Now of course the numbers won’t work perfect like that.? But let’s say only 10% of that happened then Bill would be earning $512 per month by selling only $200 per month. But let’s look at reality.? You are in this very, very early.? There are glitches in the system.? No doubt.? We are working on those glitches.? ? You will see them, your team will see them.
You will want to do damage control with your team and be on the offensive rather than on the defensive.? Let them know that they will run into problems and that comes with the territory of being in this early.? Tell them to make you aware of problems so that you can report them up and we can get them resolved.? Make them feel good for being a part of formulating the company.? The benefit of building fast and operating as a leader in this way will be beyond your wildest dreams.? I have one guy in my group who is very excited because he just brought a person in on his team that was under him in the Excel company.? This person that? he just brought in has done networking all of his life.? This person brought 434,000 people in under him on my guy’s team in Excel.? They did this without any internet.? Now with internet and the fact that we are going global eventually….this is huge.
The numbers become staggering and YOU are in the first week.? If you climb on board and package this right and support your team, you will be amazed what not only what will happen for you, but what will happen for your team.
You have the opportunity to change lives.? It feels great when you can do that.? I know because I have done it.? The amount of money that can potentially be made can be figured by putting a number of reps that are possible on your 4th and 7th level where the largest percentages are generated (4% and 7%).? Being in this early should keep you awake at night.
Comments:? My “team” consists of me, myself and I.? I did initially tell two of my affiliates about Exponent Trading on the recommendation of Skip McGrath but after I got a wiff of what this was all about I called them and told them how to exercise their right of rescission to cancel the contract and get their money back.? They both exercised this option.?
The whole Craigslist thing is just one big hoax.? There is NO Craigslist aspect.? Exponent Trading’s software doesn’t work with Craigslist (hell, it barely works with eBay) and there is no way to track sales (not that anyone would want to)? The entire Craigslist component is just a link from the members area to craigslist. Their promotional video makes it sound like Craigslist is a partner of Exponent Trading.? Nothing could be further from the truth.? In fact, if you list on Craigslist as a consigner (which is what Exponent Trading recommends you do) you will be in violation of Craigslist terms of service and they could remove your account.?
Question 2:
What exactly is a sales rep?? This is an option listed on the Sign Up form at a fee of $49.00.? How does a sales rep fit into the organization?? This position isn’t listed in the Compensation Plan PDF Document or the Compensation and Promotions PDF Document.? Also, is Sales Rep a new position?? It wasn’t an option when I joined.
Answer 2:
A sales rep position is required by the government.? You have to give someone an option to just “take a look”.? The sales rep will not be able to launch auctions through our launcher.? They will have to do everything with physical checks, not on line.? There is no reason why ANYONE would want to be a sales rep…but it’s there because we have to offer it.? I wouldn’t recommend it to anyone.? It wasn’t available when you signed up because you came in during Genesis at a pre-promoted position and you couldn’t sign up for that position and get a promotion.
Comments:
I almost fell out of my chair when I read that statement.? Essentually, it’s a made up position in order to make it look like they’re legit.? ?
Question 3:
How can someone become a retail client of Exponent Trading without joining up as an agent for the opportunity??
Answer 3:
The only way someone can be a retail client is if they know someone who is an agent and they ask them to sell goods for them through consignment.
Comments:? I’m not an expert in MLM but isn’t that a violation of the FTC regulations that require network marketing companies to allow people to buy their products without signing up as a rep?? ?
Question 4:
On the training call Bob said that for existing eBay sellers they should only channel $200.00 worth of volume through Exponent Trading in order to qualify for the seven level commissions. If this is the case then what exactly is the benefit of using Exponent Trading over just going straight through eBay?
Answer 4:
I think this is covered in the answer to question #1.? The benefit is fulfilling the requirement to receive the percentages of trades below you.
Comments:
I think that pretty much sums up what Exponent Trading is all about.
Question 5:
The Auction Launcher is very basic.? In fact, there are free versions that are much more robust.? Why would anyone want to use the auction launcher then have to open the auction up in ebay and edit it when they can just create the auction in eBay to begin with??
Answer:
Again, I think this was answer in question #1.? However, what appears to be basic to you actually is VERY detailed on the back end.? Our launcher ties into tracking all of the agents that are in your organization to infinite levels below you and what your agents trade as well as how much you get paid for each.? Granted the front end of the launcher is basic but we started out this way to allow for very simplistic trading to be done and tested.
Exponent is working diligently to clear up things from the first week of company launch and has major enhancements in the launcher planned.? You are right this is very basic.? I have had numerous conversations about this with Andy Thornton and so has Skip.? It will not look at all like it does not in weeks/months to come.? The same is true of the training part of the site.? Remember you are here in the first week of launch.
Comments:
Remember what I said above: “…since the focus of the business is almost always on the recruitment of new members the core business itself suffers a slow death because no one is focused on the actual mechanics of running the business.”?
That’s exactly what’s happening here.? The auction launcher (which should be the backbone of Exponent Tradings business) is so basic it’s a joke.? But notice, they make damn sure that the backend tracking of the commissions works.? ? Because THAT is all their business really is:? A MLM scheme with an ebay wrapper to? make it look pretty.
In conclusion, I know this post seems in stark contrast to my prior post about Exponent Trading (see prior post).? But, after getting recommendations from some people whose opinions I trusted I decided to give it a chance. (Plus, I really enjoy pissing off Terry Gibbs and any opportunity for a good argument with him is a welcomed event 
I still think there is an opportunity for someone to step in and do this right.? Focusing on helping people get started with eBay and then showing them how to earn money teaching others.? Someone could create a Mac Daddy auction launcher tool that TRULY made the listing process easier and then charge a monthly fee to access it.? That monthly fee could be used to fund the MLM aspect.? Then give people training and support to help them grow their business and bring more people in.?
I’ll be the first to sign up.
James
P.S.? Terry you were right (damn it!)
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