Today, I’m going to do a quick review of Equinox International (now defunct). Please keep in mind I have never been affiliated with this company.
A Brief History of Equinox International
Equinox International was founded in 1991 by Bill Gouldd. Its headquarters was located in Las Vegas, Nevada. The company took off like a rocket ship, right from the start. In 1996, it was listed on the INC 500 list as the # 1 fastest growing privately held company in the United States. The company specialized in air and water filtration items and also had some other products as well.
On August 3, 1999 a lawsuit claimed that Equinox International:
- Was an illegal pyramid scheme
- Made deceptive earnings claims
- Violated state securities laws
- Violated Deceptive trade practice laws
- Made False advertising laws
- Violated pyramid laws
- Violated licensing requirement laws
Eight states to include Hawaii, Maryland, Michigan, Nevada, North Carolina, Pennsylvania, Tennessee and Virginia, along with the FTC, filed charges against Equinox International.
In 2000, the company was forced to shut down its operations and pay $40 million in restitution to its distributors. The settlement banned Mr. Gouldd from ever participating in network marketing again, for the rest of his life, and it forced the company to dissolve and liquidate its assets. In addition, he also had to dissolve Advanced Marketing Seminars Inc. and BG Management Inc, and some personal assets. The company was officially closed in 2001.
Source: FTC website
Lessons We Can Learn from Equinox International
First off, my heart is with anyone who joined this company and had a bad experience. While some people made enormous gobs of money, other people were intentionally scammed.
Hopefully, people reading this article can learn something from this story. There are three valuable lessons I can share with you that should be of help.
# 1: Companies must police their distributors
Whether we like it or not, companies in our industry are responsible for the actions of their distributors. From what I have read online, lots of high earning Equinox International reps did some shady things, such as encouraging front-loading, making income claims, and advertising the business as a job. If corporate knew about this (I’m not sure if they did), they should have addressed the issues immediately and “policed” their distributors to prevent it from continuing to happen.
Some reps were encouraged to buy four or five of the $1,000 systems in order to rank advance. This is known as front-loading, and it’s never a good business practice.
Other reps were advertising their business opportunity as a JOB. This is one of my hot buttons. MLM is not a job. It’s a business opportunity. It should only be advertised that way. Promoting your business as a job is not only stupid, it is unethical.
Even worse, many reps made income claims and promised fast and easy money. As a result, it was often promoted as a “get rich quick thing” or investment. Furthermore, many reps did not share an average earnings disclosure with their prospects. This led to broken promises and unrealistic expectations.
My takeaway from this is that ALL reps in a company should read the company’s terms and conditions and follow them AND the company should enforce its rules to ALL reps, so things don’t get out of hand.
# 2: Training should be free or low cost
One of the biggest claims against Equinox International was the expensive training. Some people say that Equinox International only existed to sell the expensive training that Mr. Gouldd sold through his other businesses.
I have been told there was some free training available, but most of the training sessions were $300 to $2500 to attend. I cannot validate that, but it comes up over and over again online.
I don’t think charging for company training is unethical in our industry, but I do think it is stupid. I believe all companies in our industry should offer training, but should not profit from it. If they do their training right, it will lead to more product sales, which is a win-win for the company and the reps.
The same thing holds true with distributors. They shouldn’t profit from training their team via courses, tools or admission fees. They should train their team, so their team can go out and make more sales and recruit more reps. If they do have to charge a fee, it should be a small fee to cover the cost of the training and venue, but shouldn’t be a significant income source for the reps.
# 3: Do Your Homework & Trust Your Instincts
The last lesson we can learn from Equinox International is that consumers and business prospects should always do their homework and trust their instincts. Rather than jumping in with both feet because you are excited and pumped up, you need to take your time, do your homework and be informed. Research the company you are considering. Research the owners. Interview a few people. Do your due diligence so you can collect the facts and make an informed decision.
Yes, you could do those things and still get burned or lose money, but the odds of that happening are substantially smaller than if you just jump in without educating yourself first.
In conclusion, this is all I know about Equinox International. I am by no means an expert about the company. If you spent any time in the company, as an employee, customer or rep, I would love to hear your story. I would love if you can answer any of the following things:
- What were your favorite products?
- What type of training seminars did you attend and how much did they cost?
- What was your overall experience like with the company?
Just leave a comment below to share your thoughts. I look forward to hearing from you. Have a great day.