Is Southwestern Advantage a Scam Business Opportunity? – Discovering its True Form
College memories serve us with some of the best days a man could have in his entire life: sports games, movie nights, fraternity parties and endless flow of booze. However, in the middle of those fun perks, there is one terrifying thing about this segment of our lives that we truly despise – student debt! With an average student loan debt of $29,200 for members of the Class of 2018 (Institute for College Access and Success), it is undeniable that life at college is no picnic at all. That is where various opportunities come knocking offering “chances'' to these desperate students. One of them is the Southwester Advantage. Nevertheless, is it really a company that aims to help students or is it just another piece of crap that pushes individuals to get all the work done for them in exchange of unfair compensations? Lastly, is Southwestern Advantage a scam business opportunity?
- Company: Southwestern Advantage
- Founder: Rev. J. R. Graves
- Products: Educational Books, Software and Website Subscriptions
- Website: www.southwesternadvantage.com
With the dedication of “helping young people build character, gain life skills and reach their goals,” Southwestern Advantage, formerly known as Southwestern Company, was founded by Rev. J. R. Graves in 1855.
The company uses a direct selling program by recruiting university students. In its program, it offers opportunities to its prospects to work as interns or independent contractors to sell educational books, software, and website subscriptions through door-to-door direct selling of products.
Southwestern Advantage is one of the oldest companies in the market that still uses the archaic method to make sales. Nevertheless, the company continues to strive and even received some recognition.
In 2019, Dr. Ralph Brigham (Southwestern Advantage Global Director of Campus Relations) and Southwestern Advantage itself were selected as recipients of the 2019 Charles F. Kettering Award.
The company is also a proud member of Charter Member of the Better Business Bureau of Middle Tennessee, National Association of Colleges and Employers, and US Direct Selling Associations (DSA). Southwestern Advantage is also accredited by Better Business Bureau (BBB).
The company also prides itself with names of its prominent alumni like Rick Perry, U.S. Secretary of Energy and Marsha Blackburn, U.S. Senator from Tennessee.
Nevertheless, in spite of the mark made by the Southwestern Advantage in its years of journey, a lot of individuals still express dubious impressions about it. Critics, on the other hand, air their concerns about the company. One of the concerns being raised by its critics is the company’s methods that it imposes among its independent contractors.
The company offers a 12-week long internship throughout summer with the student contractors working 8 AM to 9 PM from Monday to Saturday (that is 72 or more hours per week which is twice the upper limit imposed by the Fair Labor Standards Act) while everyone is expected to attend meetings and training sessions every Sunday.
Once recruited, the recruits would be sent to Nashville, Tennessee for a week-long training. The expenses would be shouldered by the recruited individuals themselves. After the said training, the contractors would then be assigned to other states. According to others, the objective of the company for such an arrangement is to allegedly help the contractors focus on their commitments without the distractions of their relatives and friends.
While having the 12-week internship, a contractor is expected to carry all the expenses from food to transportation fares. They are also given host families as accommodation in particular areas where they would be sent. These hosts, who are commonly alumni of the company, agree to rent interns rooms for the summer in exchange of minimal charges.
This raised concerns among other individuals fearing the possible dangers for the youths working far away from their homes. According to Robert Lawrence FitzPatrick, Pyramid Scheme Alert President and an expert in multi-level marketing schemes, pyramid schemes and direct selling, the Southwestern Advantage is exposing its young contractors to numbers of risks by sending them to unfamiliar places and vulnerable positions. FitzPatrick said, “You’re picked up, taken away from your home turf, away from friends and family. There’s nothing else to do but keep working. They can impose all sorts of psychological pressure on you … because you’re physically stuck.”
That said, is it really worthy for the youth to take such a risk just to gain bits of experience of the real marketing world and earn some cash in summer?
Southwestern Advantage offers educational books, software, and website subscriptions through a door-to-door method. Some of the book partners of the company include McGraw-Hill, Princeton Review, and National Geographic.
The company also brags its Advantage Learning System that blends learning through using the company's various media such as websites, apps, and books. Its Learning System is divided into six: Skwids (preschool to grade 2), Homer (Learn-to-Read program for children ages 2 to 8), Advantage4Kids (math and reading skills for grades 2 to 6), Advantage4Teens (topics and practices in all core subjects for grades 6 to 12), Adv4Life (expert life and leadership advice to teens about friends and family, money, health, college and success), and Advantage4Parents (education-based resource for all stages of parenting).
Also, Southwestern Advantage offers sets of books such as My Books set, My Fun With Words set, AskMe set, Explore and Learn set, Advantage Volume Library, College Entrance Advantage and Family Bible Library.
However, compared to other companies’ products online, the prices of the books of Southwestern Advantage are not available. According to the company, the reason behind this is due to varying products’ prices. It states:
“Our prices are available by calling us directly. The reason for this is that prices may slightly vary depending on the location and cost-of-living/business expenses incurred by a student rep as they run their own independent business. Southwestern Advantage supplies the products to reps at a wholesale rate, and they sell it at suggested retail prices. These prices also vary based on what lines of products are purchased, the packages selected, and shipping/taxes. For example, products purchased in Nashville near the warehouse may be priced differently than products purchased in Alaska or Canada. If you have a question about pricing, you're welcome to call our Customer Contact Center.”
With the company’s success in the field, its products also continue to gain positive feedback among its users. Nevertheless, there are also some issues being voiced out by various individuals against the company. On its BBB profile, the Southwestern Advantage has at least 113 complaints. Some of the most prevalent issues the company faces are refunds, damaged product, customer service, advertisement issues, and product problems.
One complaint stated:
To which the company replied:
Though that particular complaint made by the said consumer was resolved, a lot of clients are still expressing their grievances about the company’s customer service and various unknown and unpermitted charges for product subscriptions.
Compensation: How Do I Earn?
If there is one thing that we really commend about Southwestern Advantage, it is the company’s initiative to provide training to its recruits before letting them make their way into the actual world of marketing. This is truly helpful for these young contractors as they need proper guidance to identify possible customers and to present the products in the simplest possible way. Though the expenses for the training sessions in Nashville are all shouldered by the contractors themselves, the company claims that the entirety of the internship would help these youths be prepared and equipped in the industry.
Just like other businesses in the field, starting the journey at Southwestern Advantage also requires its interns to invest in some products that they would be selling. With this, the young contractors need to buy their own books to get them started with the standard set that costs around $350.
The company could also require interns to provide letters of credit endorsed by two people (who are usually their parents) if interns owe any amount to the company. In the letters, there is an agreement that in any case the young contractors fail to pay the company with the amount they owe, each of the endorsers would pay $500.
Compared to other opportunities, especially other typical multi-level marketing (MLM) companies that openly discuss their compensation plans, Southwestern Advantage doesn’t openly discuss in public the ways a contractor earns. Though the company mentions in its public disclosure the various sources of earnings of contractors, the percentages and the exact clear ways these commissions and bonuses affect their total gross and net incomes are not mentioned. The only clear thing about the compensation being offered by the company is its 60-40 rule wherein the company gets the 60 percent of an intern’s sale while the intern receives 40 percent.
According to Southwestern Advantage, here are the ways interns earn their income.
- "Personal sales profit is from the products students sell to retail consumers while running their business."
- "Team and organization income is received from the company for team production."
- "Residual income is from paid-for online subscriptions participants’ customers purchase."
- "Income from prizes won from achieving various sales or recruiting levels."
Without the company’s full availability of its compensation plan in public, many claim that Southwestern Advantage is not an MLM. According to Southwestern Advantage President Dan Moore, the company uses a direct sales model which helps college students develop their own businesses.
“The model is that people are independent businessmen. They buy products from their company at a wholesale price, and then they resell those products to customers at a retail price. It's just like any business,” Moore said.
On the other hand, Senior District Sales Leader AJ Skalsky said that the company grants “dealer discount” to those sellers who manage to recruit others. He further states that the company pays the recruiter based on the recruit’s performance instead of the number of people hired. Nevertheless, it wasn’t stated whether such “discounts” would come from the earnings of the recruits or not.
Furthermore, according to the company’s profile on Wikipedia, “some dealers are invited to return in subsequent years as managers, who recruit their own teams during the school year and earn a percentage commission on the sales of their team, as in multi-level marketing.”
With that being said, is Southwestern Advantage an MLM, a direct sales company, or a scam? What should you believe? Statements or obvious facts? And why does the company keep on insisting that it uses a direct sales model instead of MLM? Is there a catch for being an MLM company?
How Much Do I Earn?
Seventy-two hours of work a week. An unknown land. Expenses for food, gas, and accommodation. Student debts and loans waiting. Pressure from recruiters and superiors.
With all those staggering weights laid on your back, it is no doubt that anyone working as a Southwestern Advantage intern would do anything to make sales. With this, it is no doubt why the company boasts of promising possibilities of income whenever it is trying to recruit students in various universities. Nevertheless, how close are those promises to reality? How honest are they? Can interns really earn these enticing income within 12-week of work and pay at least half of their university expenses?
According to the disclosure of Southwestern Advantage on its website, the “average gross income for 2019 by year of participation was as follows.”
Though the provided figures speak for themselves, I feel the need to clarify the things that seem to be hidden behind each number.
The disclosure clearly states that the figures are formed “by year of participation.” There is a vague message about this. Without clarity about how interns earn their personal sales profit, team and organizational income, residual income, and prizes, we can’t tell whether the figures above were a product of an intern’s 12-week of work made by his or her OWN pure hard work or from somebody else’s. What do I mean? Well, let’s answer that question with the realizations we could get from other questions. Here they are.
- Is it possible for interns to earn $64,703.17 on their fifth year of participation just by doing the SAME OLD THING of selling books and website subscriptions?
- With the company’s claim that it is not using MLM model in its business, is it possible for those tenured participants to reach such great figures of income?
Why am I asking these questions? Well, because we are trying to extract the truth about these things. Seeing six figures as an income of an intern is truly enticing. That’s true. However, how possible is it to get such income? Could you truly get it just by selling books alone? I think not. Instead, you could have it through “recruiting levels” as stated by the company itself. Let’s face it; no matter how skilled a person is in the field of marketing, making sales of at least $60,000 would be impossible without the help of getting commissions from your recruits. You need to knock on every door of the state you are in just to make such sales. There is only one way to make your income grow as you continue your journey in this business: MLM. Unfortunately, the company itself denies it.
Also, the stated figures are, let me quote it again, “gross income.” Hence, the figures show the entire sales of individuals including the 60 percent share of the company from the sales. So, let’s say that you as a first-time participant would receive an “estimated” amount of $7,749.67. Doing the math, and if we would just consider the personal sales profit, you would only receive its 40 percent which is equivalent to $3,099.868. Oh, don’t forget that you would also shoulder your all expenses in that 12-week craze. Crazy.
Is Southwestern Advantage a Scam Business Opportunity?
The answer for this question would be simply “no.” Nevertheless, there seems to be a bigger question that needs to be answered besides that previous query: is Southwestern Advantage an MLM? Personally, and with my own opinion, I think it is. Is it legal? Yes, MLMs are legal. But why does the company dismiss the idea and claim to be a direct sales company? Because MLMs have tainted reputation as compared to the so-called term “direct sales.” Most of all, MLMs often equate the concept of scams. Why?
Though an MLM is considered legal, the structure that makes up its entirety is based on the concept of pyramid schemes.
Just like pyramid schemes, an MLM compiles the recruits in a pyramid structure. Though an MLM generates income through the sales of products and services, the way it grants commissions to the participants at the upper structure is quite problematic. In this system, the ones at the upper part of the pyramid structure earn “commissions” that are being taken from the sales of those at the bottom. Though commissions are perceived as one of the perks in the MLM industry, it serves as a burden for those individuals at the bottom of the pyramid. This oftentimes causes the fall of the system since most of the new recruits earn little to nothing.
The Southwestern Advantage doesn’t clearly imply that it uses such a system but with the bits of information and hints we witnessed, we know what the answer is.
Weighing Things: Pros and Cons
We all aspire for an opportunity that would grant us the earnings we dream of. Southwestern Advantage is one of the opportunities out there that promise green pasture. Nevertheless, before you dive into this opportunity, let us scrutinize the following facts again.
- The opportunity would help you to learn new skills that could be of great help to you in the future.
- It only lasts for 12-weeks! Imagine spending your summer doing this to earn!
- As a student, such an offer could be of great help financially.
- The company offers training before putting you in the real world of marketing. Not all companies do it!
- The products have been receiving a lot of positive feedback so it shouldn’t be hard for you to impress customers.
- You have to pay for everything from the training up to the 12-week internship.
- You would be sent to another place. This sounds cool for youths trying to get away from their families for the entire summer but, let’s face it, you don’t know what tragedy could strike at any moment while you are in a land you’re not familiar with.
- It uses an archaic way of selling products. Knock! Knock!
- You have to work from 8 AM to 9 PM from Monday to Saturday and attend meetings every Sunday! That’s a lot of time!
- It doesn’t have a clear career plan and detailed income disclosure in public. That’s a red flag for you.
- The company claims it is using a direct selling model when everything is obvious. You don’t want to join a company that can’t even recognize its own nature and identity.
Conclusion: The Verdict
It is no doubt that Southwestern Advantages is legal. Nevertheless, no matter how desperate your situation is, you deserve an opportunity that’s honest, certain, and compassionate. You need a company that would consider your wellbeing as an individual instead of putting boulders of pressure on your back in exchange of unfair compensations.
Southwestern Advantages has been in the business field for quite a long time now. It has already built its shining reputation and has earned the attention of the world. Nevertheless, are all those things enough to prove its intention in ““helping young people build character, gain life skills and reach their goals”?
Thank you for stopping by and reading this article. I hope that you gained a lot of information and realization about this company. Nevertheless, if you are someone who’s still looking for better ways to earn, be it summer or winter, we could help you! We have been doing it since 2015 at the comfort of our homes! Click here to discover it!