We came across an interesting article written last week by Kevin Horrigan of the St. Louis Dispatch that was worthy of sharing. The following is Kevin’s personal perspective of YTB and his own personal experience with J. Lloyd Tomer.
There I was, reading Tim Logan’s excellent story in a Sunday’s Post-Dispatch about YTB International when a name from the past jumped out at me: J. Lloyd Tomer.
Why, just a couple of weeks ago, I’d been regaling my colleagues with a story from my days as a young general assignment reporter, and the time I found this small-town preacher who’d bought Elvis Presley’s airplane. And suddenly, there he was, on the front page of my newspaper. To quote Logan’s story:
YTB was launched in 2001 by three Alton-area veterans of the multilevel marketing industry: J. Lloyd “Coach” Tomer, a former pastor from Benton, Ill., who became a high-level salesman for insurance company A.L. Williams; his son Scott, who’s now YTB’s chief executive; and longtime business partner Kim Sorensen.
YTB (for YourTravelBiz) is based in Wood River. It is a multi-level marketing organization that sells folks a chance to become online travel agents. For $450 up front, and $50 a month thereafter, YTB members sell vacation packages. They also sell other YTB franchises. California Attorney General Jerry Brown says it’s a pyramid scheme, where only the people who get in early are likely to make any money. As Logan reported Sunday:
YTB’s 8,500 agents became 22,000 by the end of 2005. Then nearly 60,000 a year later. At the end of 2007, they had more than 131,000 agents and claimed 303,000 sales reps. Revenue boomed, too, nearly tripling to $141 million last year, when the company earned its first-ever profit. And a major trade publication ranked them the nation’s 26th-biggest travel agency.
“And it’s going to get better and better and better,” Lloyd Tomer said a weekly conference call this month.
Along the way, the Tomers prospered. Scott Tomer and Sorensen each earned $2.3 million in cash, benefits and stock last year, according to filings with the Securities and Exchange Commission. Lloyd Tomer earned $3.5 million. Top salespeople made out well, too: A couple earned more than the top execs last year, and 11 sales directors topped $800,000, according to the company’s publicly available income disclosure statement. Dozens more earned six figures.
YTB’s defenders say it’s more like like Amway and Mary Kay Cosmetics, multi-level marketing plans that deliver useful products, in YTB’s case, exotic travel and vacations. Illinois Attorney General Lisa Madigan has launched her own investigation, and two class action lawsuits have been filed in East St. Louis against YTB on behalf of disgruntled members.
But here’s the thing: If it is a pyramid scheme, it’s not the first one J. Lloyd Tomer has been involved with. Nor, for matter, is it the most unusual one.
When I met him, back in May, 1978, “Coach” Tomer was “Pastor” Tomer of the First Church of God in Benton. I drove over to visit him after reading that his church had bought a half-interest in Elvis Presley’s airplane, the Lisa Marie. Elvis had died the previous August, and the good pastor, then 44, was convinced that folks would pay $300 apiece to tour The King’s refurbished Convair 880.
Visitors would also get to hear the plane’s crew share stories about flying Elvis and his posse around the country, including the time he woke everyone up at 2 a.m. to fly to Denver where he could get his favorite fried peanut butter and banana sandwiches.
And as if the tour and tales of The King weren’t enough, Tomer told me, each and every visitor would get 12 $30 kits containing a gasoline additive called “Add-a-Tune” and a chance to sign up as a distributor for the product. Tomer’s partner, a Dallas businessman named Robert Philpott, claimed that treating your car’s engine with Add-a-Tune would boost its mileage by 2 to 6 miles a gallon.
“At times,” Tomer told me, “God says to me, ‘Go get ‘em, Tiger,’ and I go get ‘em.”
He figured the promotion would easily pay off the church’s$800,000 building debt within a year. Plus, church members would get on the ground floor as Add-a-Tune distributors, selling more distributorships and becoming wealthy. I told him it was the most elaborate church fundraising scheme I’d ever heard of. “We could have had a chili supper, I suppose,” Tomer said.
Alas, the 50-state tour that Philpott and Tomer planned for the Lisa Marie never got off the ground. By June of 1978 the Texas attorney general had quashed the marketing plan as being in violation of the state’s deceptive trade practices law. Philpott was discovered to have had problems with the IRS and the SEC. By July the Lisa Marie had been repossessed (it’s now parked near Graceland in Memphis). And a lot of people were stuck with dozens of cases of a useless oil additive.
Pastor Tomer became Insurance Man Tomer, and now is Coach Tomer. As Logan’s story recounts, he and his son are wheeling and dealing on a massive scale, renting out the Edward Jones Dome for rallies, buying and selling mansions doing lots of business with firms owned by YTB insiders.
I don’t know whether YTB is a pyramid scheme or not, but I’ve met Lisa Madigan and I would not like to have her on my trail. Maybe the Coach should have stuck to chili suppers after all.
We welcome anyone’s own personal experience with any company. Our reason for profiling YTB was based on the recent news for the embattled company and the high level of attention they have been getting as of late.
Popularity: 3% [?]
Ignite, the direct selling arm of the Dallas based energy company, Stream Energy has just announced that they have been received their coveted acceptance into the Direct Selling Association. Their membership was approved last week after a rigorous approval process. The Direct Selling Association is of course the leading organization for the network marketing/direct selling industry.
Ignite is the first direct sales company in the energy trade business to become an active member of the Association. Ignite had to go through the obligatory one year review before being accepted into the Association. The DSA requires all companies to go through this to ensure that each company is in full compliance with the high ethical standards of the DSA’s Code of Ethics.
