I will not take credit for this angle--I got it from another forum. However, I did think that it was a good way to look at the YTB program for their RTAs and the compensation plan in particular.
From YTB's financial reports reflecting the first 9 months of the year 2007.
On the income side:
- Online travel stores and monthly fees $ 69,031,218 (paid by RTAs)
- Training programs and marketing materials $10,364,547 (paid by RTAs)
- Travel commissions and services $ 13,930,824 (paid by the travel suppliers)
And on the expense side:
- Travel commissions $ 9,398,036 (paid to the RTAs)
- Marketing commissions $ 55,370,759 (paid to the Reps)
OK, now I have all the standard answers:
- You don't know the system
- You can't look at it like that
- You have to join to know about it
- We can't tell you the real numbers because the FTC will get us
- Some RTAs are also Reps
There is no way to determine who is a double dipper in the RTA/Rep bucket, so let's look collectively and call the two groups one.
Collectively, the group has paid into the YTB coffers $70.4 million dollars. This represents the sign ups, monthly fees, and training. This is an average of $582.03 per person or $64.67 per month.
Collectively, the group has taken out of the YTB coffers $64.8 million dollars. This represents marketing commissions paid (Reps) and travel commissions paid (RTAs). This is an average of $535.50 per person or $59.50 per month.
Now I know we are not talking a lot per person, but collectively it is huge, and precisely why I claim that this program will never work and is destined to fail. The average person in YTB over the past 9 months LOST $46.53. That is $5.17 cents a month.
No one would ever think of suing for this amount. More likely, this is something that would be brushed under the rug as an embarrassing mistake. Certainly no court in the land will accept a case where the plaintiff is suing for $46.53.
The program is flawed. When operating a business--any business, money in, less money out equals your profit or loss. Successful businesses will have profits, unsuccessful ones will have losses. The way I see it, out of 120, 949 businesses all but one suffered a loss. And the one that was able to make a profit, made it to the tune of $2.1 Million Dollars--and that company was called YTB.
You can crunch the numbers all you want at the SEC Filing
I also have to question the nearly $2M in salary taken by the top 5 executives at the company for an average of $377K per year. I do not fault anyone taking a large salary for running a business, but I do fault them when in 9 months they each pocket $282,750 and the 120,948 people that are building this business are losing $46.53. It might make for an interesting Excel graph.