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No Pyramid For Amway, But What About The Tools?

Amway. Not A Pyramid, But What About The Tools

 

At the very first Amway presentation I attended, the speaker talked about the tools. The tools are books, tapes, and events.

 

These were all designed to motivate and educate you so you will have a successful Amway business. I was in around 1989. At that time, the tape of the week was $5 and all I knew was they came from my sponsor. I picked it up along with my product pick up each week. Even the weekly product pick up was a chance to get together and motivate each other.

 

I remember the big earners saying from stage how rough it was driving to product pick up every week due to kids, snow, sleet, etc. Was paying your dues!

 

 

Once the FTC lawsuit was settled with Amway NOT being a pyramid scheme, the focus moved onto the tools business.

 

To summarize, the tools (tapes, books, rallies) were manufactured by and promoted by the highest level distributors. Famous names are Dexter Yeager & Bill Britt. These tools were sold to certain distributors of lesser, but very high rank in Amway. They were then sold to their respective downlines.

 

At this point, I se  no reason to call it a pyramid. The top guns were just using their downlines as a customer base to sell the tools.

 

The major problem was the constant pressure on downlines to buy the tools. Get on the tape of the week. Go to all the rallies. Duplication equals success. Each person was pressed (so they say) to get their people on the tools.

 

I remember when I was in. I enjoyed tape of the week and $5/week was not that bad. I had a bit of trouble swinging the money to the bigger rallies, but the local ones were not that bad. I just stayed within my budget.

 

After reading a few of the lawsuits, I noticed common threads.

 

  • Claims that only people at the top made all the money! Pyramid!!!!
  • The plaintiffs lost a fortune. What is a fortune? That’s a lot of $5 tapes.
  • The uplines misrepresented where their incomes actually came from. That is a fine line and can be cut either way.
  • Nobody told them, nor did they have any reasonable way to find out, that the average person in Amway makes little or no money.

 

Value For Money?

 

What does $5/week get you? It’s a motivational/educational tape. Now this was way before the internet so you couldn’t listen to Youtubes for free. How much did a music album cost in 1989? According to Mr Google, it was between $8 and $10.

 

How much did record producers make? Millions

How much did the artist get? Millions

 

What was the value of a music album? Up to the user.

What was the value of tape of the week? Up to the user.

 

What were the costs of rallies in the 80’s/90’s? Anywhere between $50 and $300 depending on who you talk to or which lawsuit you read. $300 probably was the weekend long seminar.

 

I’ve paid $2500 for personal development seminars.

 

What’s the value? Up to the user. What they get out of it.

 

What was my value? I met Charlie Tremendous Jones and we ended up doing business together outside of the seminar.

 

I got saved. What’s that worth?

 

 

How Much Does It Cost To Run A Business?

 

Let’s look at Amway. Based on the business model in the 80’s/90’s, here is a rundown of what I think the maximum would be;

 

Sign up fee                               $100 (vague on that one)

Tape of the week                      $260

Quarterly Rallies                      $400

One Big Rally                          $300

Promotional Lit                        $100

 

Total                                        $1,160

 

I did not count the 100pv you have to do as you will be consuming those products yourself.

 

Did not count the excess fuel to run your car as that would certainly be recaptured if you had the correct CPA to do your taxes!

 

SO, let’s round up and say $2,000 / year to run a business.

 

That’s a drop in the bucket for a business. And Amway IS a business. You can make money in it. Is it for everybody? No. Do you have to hustle. Yes.

 

Sour Grapes

 

People generally hate to be deceived. It really is not good.

 

People hate to be taken advantage of. Not good either.

 

I have no idea why the population does not sue big corporations for these things. Listen to the ads on TV. 30 second bull.

 

I didn’t make much in Amway. I didn’t cry that I “lost” some money. I did not let people strong arm me into running up my credit card or buy a garage full of vitamins to get qualified for one month.

 

I did my research on Amway before I got in. I spoke to other people.

 

I took things at face value. Yes, I did buy about 300 tapes. Were they useful, yes.

 

I listened to them for years after I stopped being a distributor and I did buy products after that. I still use SA-8 and LOC. I drink the energy drinks they have.

 

If you talk to these people filing lawsuits, they will come off as strong people. So how in the world did they go hook line and sinker into allegedly spending a fortune on Amway?

 

My take is they are embarrassed. They recruited friends and family (which I found out is a big mistake) and then had a lot of egg on their face so they sued. To me that makes me look even more stupid.

 

Now, in this woke world we all live in, companies have to remove 100% of the risk just to avoid these lawsuits. It piggybacks on the “participation” generation whereby there are no winners or losers. You get the same rewards for being lazy as you do for hustling.

 

Is MLM for everyone? No

Is it for some – absolutely.

 

The world needs all kind of people in it. Diversity, right?

 

Are you entitled to bash MLM? Sure, it’s your right to have an opinion.

 

Good luck in all you do

 

Cheers!

Steve

 

Is Amway A Pyramid Scheme?

Is Amway A Pyramid Scheme

This is the grand daddy of all mlms. This is where it all started and where most people all go back to when something is wrong in the industry.

Amway was founded in 1959 by Rich Devos and Jay Van Andel. It has ranked #1 in the MLM industry for years and years. In 2021 it had $8.8 Billion in revenue from operations in over 100 countries.

Begs the question….how can this be a pyramid scheme?

Let’s look again at what is a pyramid scheme:

1.) High up front cost and inventory loading
2.) Get paid for recruiting new members
3.) No retailing of goods/services or no product at all

In this article regarding Amway, we will address these quickly so we can get to some other important items.

1.) It costs $100/year to be an Amway IBO (independent Business Owner)
2.) There are no inventory requirements at all
3.) You do not get paid to recruit. You get paid based on volume of activity
4.) You can retail many products/services

Conclusion: Amway is not a pyramid scheme.

Amway Lawsuits

The famous Amway lawsuit was brough by the FTC (Federal Trade Commission) in 1979.

I do not think many people really read the actual lawsuit. Maybe just summaries. The understanding that most people have is that the FTC was claiming Amway was a pyramid scheme. It is much more than that. In reading the lawsuit, I came away with these items:

1.) Amway was accused of price fixing and price manipulation
2.) Amway was accused of restraint of trade
3.) Amway was accused of unfair business practices
4.) Amway was accused of operating a business model that would collapse upon saturation (no mention of a pyramid yet)
5.) Amway and it’s members were accused of making false and misleading claims regarding the business

In the whole lawsuit, the word pyramid never appears! Imagine that.

Finally, a mention of the pyramid rules. This is outside of the actual “counts” that they are being accused of.

Interesting things:

1.) Amway has had an inventory buy back policy since it’s inception – good thing to have
2.) Amway has a 70% rule to avoid distributors purchasing their ranks. A distributor has to resell at least 70% of what the personally buy.
3.) Amway has a 10 customer rule in place. The suit says that Amway direct distributors enforce it, but I was in Amway for 5 years and I never got asked. Opps!

Well, the bottom line is that Amway was deemed to NOT be a pyramid scheme.

All the other stuff was just that. Stuff. Just like any other frivolous lawsuit. You throw up all you can against a wall and something may stick. Well, not in this case.

Unfortunately for Amway, this lawsuit was just the beginning of many to come. The main reason is just stupid distributors that will say anything to recruit someone. I saw the desperation, the begging, and deception. Does that mean you fall for it?

Do your due diligence!

CLICK HERE for the tools lawsuits!

Cheers Steve

Young Living Lawsuits – Honest Reviews

Young Living Lawsuits

Just like any other mlm out there, Young Living has had it’s share of legal trouble.

In this blog post, I am going to review the Young Living Lawsuits and distill them (ha ha) into everyday language and make some sense of them.

Class Action Lawsuit Filed 1/20/21

This lawsuit alleges that the Young Living Essential Oils provide no health nor medicinal benefit and people purchased the products based on these claims:

  • Promote feelings of calm and relaxation;
  • Help consumers sleep;
  • Reduce anxiety;
  • Provide clarity, focus and/or alertness;
  • Energize; and
  • Improve consumers’ mood and increase their motivation.

Young Living lawsuit

The big no no was that the products were labeled “therapeutic grade”. So, sites that are, what I call, bashing sites put all of this out there and are used to collect people into the class action suit. What’s even more interesting is that the person bringing the suit purchased oils for 4 years. I don’t think it would take 4 years to figure out if they did or did not have any benefit.

In the end the suit was dismissed. The judge referred to the labeling as “puffery” and that any reasonable consumer could not rely on the vague advertising.

To me this is a wake up to any Young Living distributor to watch what they say and be very general.

NEXT

Young Living Pyramid Scheme Lawsuit

Julie O’Shaughnessy, in 2019, brought a lawsuit alleging that Young Living operates a pyramid scheme and she, and others, have lost thousands of dollars.

is young living a pyramid scheme

Just as in other MLM lawsuits, the word pyramid shows up hundreds of times and claims that they were forced, somehow, to keep spending money.

The lawsuit just rambled on about arbitration and really looked like a waste of time. I saw some writings that it was dismissed, but cannot see any court document. On the flipside, if they would have won, Young Living would be out of business.

NEXT

Young Living Warning Letter June 2022

Young Living received a warning letter from the FDA regarding some of their products, notably the CBD product. The FDA is always on the lookout for people making claims (except for big Pharma) about what supplements can or cannot do.

What’s interesting is they called the YL products unregistered drugs because people on websites and social media were saying that the oils helped with things like sniffles and kidney stones.

I guess I best be careful if I put on my website that Lemonade took away my kidney stones!!!

I believe this type of letter is to just keep a check on supplement companies so that they don’t go too far in their claims.

Of course Young Living replied and the information was taken off the sites.

I did my own snooping around the internet and didn’t really see anything that would make the FDA go crazy. I feel that they are worried people just might take their health into their own hands. Just sayin.

Well that wraps up the Young Living Lawsuits. If you know of any more, just leave a link in the comments.

Cheers

Steve

 

 

Is Mary Kay A Pyramid Scheme – 2022 Honest Review

Is Mary Kay A Pyramid Scheme?

This seem to be the question on everyone’s lipsticks! You can type this into youtube and there are many many videos popping up on Mary Kay Scams and women crying over how they were scammed by Mary Kay being that it’s a pyramid scheme.

Spoiler Alert – It is not. Is Mary Kay an MLM. Yes, it is. No matter how you want to make it up (ha ha), it is still an MLM.

Here is a quick video on the subject for those of the auditory learning method:

 

What is a Pyramid Scheme?

1.) A scheme whereby people are paid to recruit people

2.) There is no focus on retail sales

3.) A high price to buy in / start up

is mary kay a pyramid scheme

How to get started in Mary Kay

Getting started in Mary Kay is easy.

$30 gets you in. This gets you some promotional literature, one year access to a merchant account, and a free retail website.

Now I used to build websites, but not for $30.

I have a proper merchant account that costs over $30….per month!

If you want to go to the next level, you can start with $130 and get all that is in the $30 pack plus demos.

So far nothing that says Mary Kay ruined my life.

The problems come in when consultants start “making” people buy inventory. I’m not sure how people force others to do this. I asked the lady who sponsored my ex what kits were available and I made an informed decision.

There is NO requirement to buy inventory so if you do, it’s on you.

The cost to get started in very reasonable and is of high value.

 

Do I need to Recruit People In Mary Kay?

No, is the simple answer. You can get into Mary Kay for:

1.) Just to buy your own products at a discount or

2.) Make money on retail sales or

3.) Build a team (Recruit) or

4.) All of the above or a combination.

 

Do I Get Paid To Recruit People?

The answer is no. However, lots of people out there twist this statement around for their own benefit. Either click bait or to justify a bad experience which was mostly their own doing.

When you recruit someone into Mary Kay, you do not get a recruiting bonus. If you did , Mary Kay would have been found out a long time ago just as Pre-paid Legal was.

When you recruit someone into Mary Kay, you get paid on their volume they purchase if you are an active consultant. See below.

This is why Mary Kay is an mlm. You get paid on multiple levels for the volume in your team.

 

Is there a purchase requirement?

No there is not. You can be successful in Mary Kay by just retailing the product.

If you are not “active”, I believe you just get 40% off retail and you can sell at full retail to make a profit.

If you are active, you get 50% off retail and you also qualify to get paid on your team volume.

To be “active”, you have to purchase $225 worth of wholesale product every 3 months. If you use the products yourself, you can get pretty close to that figure and you can retail the rest. I had about 5 regular customers and my ex used the rest. Everyone is different – disclaimer.

Contrary to popular belief, you can write off 100% of the purchase requirement. See the article here.

Why Do People Push So Hard For Recruits?

In any MLM, there is a focus on recruiting. There is also a focus on retail. It’s a matter of perspective.

A person who is afraid to sell always thinks they are being pressured to sell.

A person who is afraid to talk to other people always perceives a pressure to recruit.

This is why I am astounded at the number of people that say they were “burned” or Mary Kay ruined my life or they write blog posts on the dark side of Mary Kay cosmetics.

They know going in you have to sell and recruit.

The reason (in my opinion AND experience) they push for recruits is purely a numbers game of any sales company.

If  you speak to 100 people about the Mary Kay opportunity, this is a sample of what may happen:

83 will tell you to piss off (don’t forget to ask for referrals!)

10  will become a customer – or just buy a once off product

5 will sign up to get the discount

2 will sign up for the discount and to build a team

The problem is always a few people who push and push people knowing that they do not want to build a team.

On the flipside, many people cannot just say no when they are pressured.

 

At this point, I see no reason why anyone would call Mary Kay a Pyramid scheme unless they just want clicks on the internet or they are bitter about their experience.

Let’s look at a few more things:

Mary Kay Compensation Plan PDF

This one is a tough go. I scoured the internet and the Mary Kay site and found only a small fact sheet.

You can download it here.

In a nutshell, the compensation plan is simple and similar to other MLM’s

Retail Margins

Override percentage on your team

Bonuses for reaching certain levels

Mary Kay Car program

mary kay car program

Funny Concern

I read slot of these negative Mary Kay bashing sites (maybe too much) and a funny thing just keeps popping up.

Many say the car program is not free and many say if the focus is not recruiting, why do they promote the car program?

Answers are pretty simple.

If someone pays for my car payment and insurance, that’s free to me. Did I receive that for doing the work necessary? Yes.

Now, theoretically, I could sign up people that just want to retail the product and qualify for the lowest level free car.

I could also get the number of active people necessary to meet the volume requirements as just customers that choose to buy alot of makeup.

You see, there are many ways to skin a cat. Sorry cats.

Mary Kay is like every other company out there. They have rules based on their profit motives and you have to decide if playing within those rules will achieve your profit motives.

Similarly, people complain their job does not pay enough. I say, find one that does!

If MLM is not for you, don’t join.

Is Mary Kay a pyramid scheme? No

Is Mary Kay an MLM? Yes

Can you make money in Mary Kay? Yes

Cheers

Steve

 

Is Optavia A Pyramid Scheme? 2022 MLM Review

Is Optavia A Pyramid Scheme? A Truthful MLM Review

 

Welcome to Optavia. This is where you start your personal transformation. Otherwise known as weight loss!

The questions are simple?

Is Optavia a pyramid scheme and is Optavia an MLM? The answers are No and yes, respectively. This is from an independent perspective.

Ask someone who lost money or has a complaint against Optavia, then they are automatically a pyramid scheme. I call it the P card. When in doubt, throw the P card.

It is, how a lot of people, try to end an argument or debate about a company in the MLM industry.

In this article, we will dive into what makes Optavia an MLM and why it isn’t a pyramid scheme.

 

Optavia Products

 

Optavia is no different than any other health and wellness company. They have meals and meal replacements. They call their products a fancy name to differentiate them from other meals and health products.

 

They call their products fuelings and they are recommended by a health coach – another name for your upline! Fancy.

 

One of the biggest complains is the cost of mlm products. Let’s see how Optavia Shakes stack up against other brands!

Select Dark Chocolate Covered Cherry Shake – Very Fancy        $3.46 per shake

 

The Man Shake meal replacement shake – Not fancy                    $2.49 per shake

 

Rapid Weight Loss Meal Replacement Shake – So So                   $3.92 per shake

 

Slim Fast –  Been around forever                                                     $1.51 per shake

 

The last three can be found at my local grocery store and/or Walmart.

The cost is not so far out of the range of a normal range as to spark complaints. After all, nobody is forcing people to buy this suff!

 

Is Optavia an MLM

 

Yes, it is, by the very definition. An MLM is a business model whereby you, as a distributor, can get paid for the sales of people on multiple levels. If it were just one level, it would be considered affiliate marketing.

Instead of buying pricing TV ads and radio spots, MLM’s pay their advertising budgets to the people spreading the word about their products. This is why mlm’s can pay on several levels down.

To start your Optavia business, it costs $199.00 for a business kit. This has your standard literature and 12 month access to your individual site.

People may complain about that, but it does cost money to get replicated sites and provide materials.

 

The Optivia Compensation Plan

The Optavia compensation plan is pretty simple….not!

I got lost after the first chart:

You can download the whole “integrated” compensation plan here.

One thing I did note, you have to have 5 customers that make an order to qualify for anything!

That is a switch to most MLM’s where they require zero retail customers.

 

Plus, your personal orders count for nothing. This is a good thing so that people do not “garage qualify” and then they end up on anti-mlm sites complaining how they were burned.

 

They continue with the typical ranking systems and incentives like most mlm’s. Look at this craziness!

 

Is Optivia A Pyramid Scheme?

It is not. In order to be a pyramid scheme:

  • You Get paid only for recruiting people
  • You have a high start up cost
  • There is no retail trade

 

Based on the facts on their website, it is not a pyramid. They actually make it pretty tough to earn money with the 5 customer rule.

There is no inventory loading and $199 for your kit, which includes a website, is pretty good.

All in all, you have to be pretty switched on to make some decent money in this company. On the flipside, I don’t see where you can lose more than $199 bucks.

Your personal orders are for you so you get the benefit. Stocking up on things does you no good and nobody is forcing you to buy anything.

 

Is Optavia a pyramid scheme? No

Is Optavia an MLM? Yes

I believe people need to go into these businesses knowing that you have a sales role. Period.

And if you fail, don’t play the P card!

 

Cheers

Steve

 

Are Auto Ships Tax Deductible?

Why Auto-Ships for MLM’s Are Tax Deductible

 

To deduct or not to deduct, that is the question.

 

If I lined up 10 tax people in a row, I probably would get 10 different opinions. Mostly not deduct, but for various reasons.

 

What is an Autoship?

 

An autoship is a monthly order that comes automatically to you from your company. I use the word autoship as it is very common in the MLM industry.

 

What we are technically talking about is a minimum purchase requirement to remain active and collect overrides for your team.

 

The dirty truth behind autoships is that companies use them to keep their cash flow going so they can pay out commissions! Now I got that from some great reliable sources!

 

The way they get you to get on it is that if you want to get paid, you have to buy. Usually the monthly amount is between $100 and $200.

 

Most times, people put their own products on autoship and therein lies the rub. Most accountants say its not deductible because you use it personally.

 

While “personal use” is a buzzword in the accounting community, you have to look further into it to get to the true nature.

 

Let’s look at what the IRS says a deduction is….

 

A deduction is any cost that is ordinary and necessary in carrying on a trade or business.

 

Is a purchase requirement :

 

Ordinary – Yes, in the MLM/Direct Sales industry – 99.9% of the companies have a purchase requirement

 

Necessary – Yes, it is. If you want to get paid commissions for your group.

 

Therefore, it is a deduction! You can flush the stuff down the drain and it would still be a deduction!

 

And yes, it has stood the dreaded audit test – In my experience!

 

I put the amount spent each month under “Required Purchases” on Schedule C of 1040.

Is Herbalife A Pyramid Scheme?

The Truth About Herbalife MLM

Founded in 1980, Herbalife comes in at #2 for the top 10 MLM’s in the USA- 2022. If this were an illegal pyramid, why then hasn’t it been shut down?

The company was investigated by the FTC in 2016 and all they could get on them was “unfair and deceptive business practices”. If you look at many quote regular companies, you see that all the time. They don’t even try to hide it. Have you ever seen a McDonald’s hamburger that looks like the one on the commercial? Exactly.

Let’s look closely into Herbalife and find out what it’s really all about.

Remember the items that constitute a pyramid scheme:

  • You get paid only on the recruitment of others
  • You have to pay a high up front fee
  • There is no retail trade

All other items that have been thrown around are a pretty gray area and have not proven to be illegal.

 

How To Get Started

Scouring their website, there are no signs of a requirement of a high up front fee.

To start as a preferred customer in 2022, it costs $34.95 USD and you cannot resell any products. You just get a discount on things you buy.

If you want to become a distributor, it costs $94.10 USD in 2022 for USA. This is for your starter literature. This is contradictory to their main page where it states”

“Low Startup Costs: There are no minimum purchases required or requirements to purchase any sales or business tools to start up or succeed in your Herbalife Nutrition Independent Distributorship.”

That’s a bummer but it is not earth shattering. They kept the start up under $100 so that will not even come up on the FTC radar. There is no mention of these Herbalife cafes on their website. That must be a practice not supported by the company.

 

How You Get Paid

There is no link on the company website to their compensation plan. Google has it listed under marketing plan.

What I learned later in my career is that compensation is not marketing. I wish they would change their language!

Like 99.9% of the MLM’s out there, Herbalife requires you to personally purchase products to qualify for overrides beyond the retail sales. This again goes against their website statement that you need not purchase anything to succeed. The only way to do that is to just sell retail.

This purchase requirement always is a tax rub for distributors and having tax people not aware of how an MLM works.

As of the date of this article, I cannot figure out how much you have to purchase dollar wise each month. Based on the products and their cost, I can safely say you will have to buy about $200/month. Now you can use them yourself and/or retail them to customers.

I see no customer requirement in Herbalife. Market America has a system whereby you have to submit retail sales every quarter to the company. This proves you are getting customers.

So technically, there is a retail component to this business, but it is largely up to the distributor to do it.

BANNER

As with others, you earn a % of the volume produced by your downline distributors. Now many people think that this somehow is a bad thing. Why should it be. If you recommend a movie to someone and they go see it, does the movie theatre pay you? Of course not. Should they? Yes! You did their advertising for them! It’s called word of mouth.

If anyone recommends my tax service or my tax savings course, I pay them! They are keeping my advertising budget to a minimum.

I believe the problem comes from rouge distributors telling new recruits to load up on products or start these Herbalife cafes. That is not good practice.

However, the people joining Herbalife should consult with an impartial person about the way to go about business. Most new people do not have any business experience and therefore, it is vital to seek good counsel.

 

At this stage I see nothing that points to a pyramid scheme with Herbalife. The problem is that distributors that follow bad practices make it easy to call something a pyramid. I guess every industry deals with it in one way or another.

IS Arbonne A Pyramid Scheme?

Is Arbonne A Pyramid Scheme?

 

Arbonne pyramid scheme? You decide after hearing the facts

Arbonne International was founded in 1975 in the USA. Some say it was founded in 1980, but we are close enough for this article. It is a skin care, cosmetics, and nutrition company. All of the usual suspects for an mlm company.

Their story is like most other mlm companies in that they have a concern for you and the environment. They use buzzwords like empower, flourish, and many others.

Getting past all that, let’s just dive into the nitty gritty of the Arbonne compensation plan and how you can sign up with Arbonne.

How To Get started

Preferred Client:

Here it is from their website:

By joining Arbonne as a Preferred Client, your startup fee of $25 (free with orders of $225+ RRP) gives you access to exclusive deals and special offers on clean products that support a healthier mind, strong body and beautiful skin — and overall healthy living. Plus, all orders of $225+ RRP earn you free shipping and a free gift!

So really, just to get a 20% discount, you have to buy $225 worth of products. Based on the prices of their products, that is easy done.

 

Independent Consultant:

FEATURES
• Earn up to a 35% retail commission on your personal product
sales to your Clients
• Earn up to a 15% retail commission on Preferred Client
(PC) sales
• NO mandatory minimum purchase requirements and
NO inventory requirements
• Place orders for your Clients directly from arbonne.com
with no need to keep inventory on hand
• Run your business from your phone wherever you are, in
person or virtually
• Weekly commission payments on your sales (monthly
commission payments on your team’s sales)
• $65 AUD / $75 NZD sign-up fee (annual renewal fee is
$39 AUD / $45 NZD) And if you change your mind, call us for
a 100% refund on your sign-up fee and no-hassle returns on
any unopened product!
• 35% discount on personal product orders and 45% discount
on personal orders that are over 400 Qualifying Volume

These are all of the features per their website. It’s not a bad start. The sign up fee is less than $100USD and no inventory requirements!

Let’s look at the compensation plan in detail.

The first thing I notice is a contradiction between their website “selling” of becoming an independent consultant and what a consultant must do to get paid. Of course there is the difference between wholesale and retail and a commission on all of your preferred clients. Most people don’t even get 10 customers in reality.

The contradiction is that they say no minimum purchases to get paid, but in their “Success” plan, they state you must purchase 150PQV or 500 PQV to get overrides!

PQV = Personal qualifying volume

Personal Qualifying Volume (PQV): PQV equals the QV from
products sales through your Arbonne account and the product
sales to your personally registered Clients and Preferred Clients

I took that right from the site. After really reading it in depth, they do encourage retail and preferred clients. Although, I do believe most would just buy their own items through the website!

One of the items that is key to NOT being a pyramid scheme is “can I make more money than the person who signed me up”.

Looking at the first level of the Arbonne compensation plan, they almost lock in that you can make more money than your sponsor!

If I would enroll my aunt, for example and she would get promoted to a higher level than me, all of her volume does not count for me! My personal opinion is that that is “wrong” in one sense, but on the other hand, it creates a situation where my Aunt can definitely make more!

This was one of the longest compensation plans I’ve ever seen. You get promoted to more levels than I’ve ever seen.

Each level is more complicated than the last!

But overall, I see nothing that points to a pyramid scheme here.

Arbonne was sued in 2017 by two of it’s distributors claiming the Arbonne is a pyramid scheme and many other similar things. The suit was dismissed and settled out of court.

Like I said, I see no pyramid scheme here. What I do see is a lot of people that that do not understand the game of MLM. You can read more about that by clicking here

Cheers

 

Can You Earn Money In MLM?

Can You Make Money In MLM?

 

The simple answer is yes, you can. But what does it take to earn money in mlm?

 

Here are the top 3 reasons why people do earn money:

 

  1. They understand the game – Yes, it is a game. Just like any other money making venture. You have a job. The game is to show up and do your job. If you do that you will get paid.

 

If you own a business, you job is to have great products and customer service. You also must get customers. You do these things, you get paid.

 

This is the case in mlm. The game is two fold, if you want to be legal! One, you must make retail sales. Two, you must recruit others to be a part of the company. This is a business, not a hobby and you must treat it as such.

 

Most people fail at this point, partly their fault and partly the company’s fault. They are told it is easy. Just go out and share and people will sign up and you will make millions. While it is true if people sign up you will make money, most people are not sales people nor do they know how to “share” in a way that will get them recruits.

 

  1. They know how to close – Close the sale. Close the recruit. This is a skill that anyone can learn. The problem is, most people do not want to learn it….bad enough. In my 40 years of being in the mlm industry, I have seen tons of people who want to get rich or at least, financially independent. However, they were not closers nor did they want to learn the skill. They just relied on their uplines to “close” people for them. Bring people to a meeting, we will convince them to sign up was the mantra given to may new people.

 

I personally struggled with closing in my first mlm venture. I could show the plan. I could get people to talk to me, but I did not sign up one person in over 5 years. Was this the company’s fault? No. It was mine. Once I invested in myself and learned the skill of closing, I did just fine…but in another company. I personally know many people who earn money in mlm and they all invest in their skills.

If you want to learn to close sales CLICK HERE and get assistance from my business coach who specializes in mlm.

 

  1. You must stick in it – This is a technical term meaning go the distance. I see many people jump from one company to another and wonder why they never succeed. The internet is full of memes that show people quitting just before the breakthrough. This also leads to people not believing a word you say. Oh no, what is he selling now? If you have heard that from people, you are a jumper. The best way to stop, is to stop jumping. Find a company and a product that you believe in and stick to it.

 

Once you find the company, keep going and learn to make short term and long term goals. It is best to go with an established company rather than a start up. Check out the top mlm companies by clicking here.

Cheers

 

Is Young Living A Pyramid Scheme?

Is Young Living A Pyramid Scheme?

 

Young Living Essential oils was founded in 1993 and has become a major player in the health and wellness business category.

 

Gary and Mary Young started their first farm and distillery in 1994 and distributes essential oils internationally.

 

Young Living comes in at #9 of the top MLM companies list in 2021 with 2.0 Billion in Revenue.

 

Just as a reminder, an illegal pyramid scheme contains some of these characteristics

 

  • You cannot make more than the person who sponsored you
  • You only get paid to recruit
  • No product exists or no product is being sold
  • Commissions are based only on recruits
  • Large sign up fee or front loading of inventory
  • There should be a strong retail aspect – Gaining customers

 

 

HOW TO SIGN UP IN YOUNG LIVING

 

This sign up discussion applies only to the USA signups

 

Preferred Customer:

 

You can sign up to shop Young Living products and enjoy member rewards.

 

Once you enroll another person, you automatically become a business member.

 

They are calling a business builder a Brand Partner on their web site. It does look like you have to buy a small business essentials kit for $29.95

 

This gives you company literature and some goal tracking papers.

 

You do, however, have to earn 100PV to get 24% off all products. This equates to about $165.00

 

So all up, it is still under $200 USD to get started in Young Living.

 

This is far below the threshold of a typical pyramid scheme.

 

 

HOW YOU GET PAID IN YOUNG LIVING

 

Beyond the fast start bonuses, trips, and other periodic incentives, Young Living’s compensation plan is based on a five level payout.

 

You earn a percentage of all the group volume in each level – 8% 5% 4% 4% 4%

 

There are 7 qualification levels and you only get paid down 5 levels hen you reach the 4th qualification (Executive).

 

This “unilevel” method of payout is typical of many other MLM’s.

 

In order to get paid, you must personally purchase 100PV of oils per month. (about $165).

 

One of the key factors I look at when analyzing compensation programs is the ability for a person to earn more than the person who enrolled them.

 

If that cannot happen (as in the corporate world), it is definitely a pyramid scheme.

 

In Young Living, I could personally enroll more people than my enroller and based on the compensation plan, I will earn more money. The plan rewards you more for personal enrollments than group enrollments.

 

Nowhere in the compensation plan do I see any payment for simply recruiting someone. The closets to it would be their fast start bonus. But that is based on volume purchased, although some critics could try to twist it!

CLICK HERE for Young Living Compensation Plan PDF

 

RETAIL FACTOR

 

Unfortunately, there are not retail sales requirements in Young Living. It goes against the FTC’s 10 customer rule established when they investigated Amway. There is no requirement from the FTC, but they do take that into consideration if an investigation is launched.

 

Young Living members can (and do) sell to retail customers. I was a retail customer for a long time before becoming a member. This is the way most members start. According to Young Living, about 89% of their members are in it to get a discount on their own oils and make some sales along the way.

 

 

CAN YOU MAKE MONEY IN YOUNG LIVING?

 

The simple answer is YES. The practicality is, most do not. In fact, in 2021, the average gross annual income of 89% of their members was only $3.

 

I have personally coached a few people in Young Living and have about 50 or so tax clients in Young Living. The key is finding people who like the benefits of the oils. I would say 1 out of 4 people will do something with the business. The 3 out of 4 will either be retail clients or members.

 

The fact is that the oils are high quality and high priced. They do have benefits and I would not classify this as a pyramid scheme.

Let me know your thoughts in the comments!

 

Cheers