mlmdirt

MONAVIE WIKI PROBLEMS?

2010-03-11T13:37:00.000-08:00

Look, I'm not slamming them, nor am I anti-Monavie. I want all direct sales companies to represent the industry well, something I feel MonaVie does not do. I know some of you have found success in this business, I have received the testimonials, I have simply pointed out that I do not believe they represent us, the industry in the best light.

I have received multiple emails on our other site concerning MonaVie. Everything from distributors asking me to try it, to potential distributors asking for an assessment. Here is the same take I gave you there; when you add up all the facts and current events, their checkered history, combine it with their compensation plan, mix that with recent allegations of buying distributors from other companies, add a dash of legal problems, and you have a potential sinking ship.

Any of you wonder why they are not members of the DSA? For those who are a little more internet challenged, may I present the research collected and posted on wikipedia. I am interested to hear your thoughts on this so keep it coming.

Source Below. http://en.wikipedia.org/wiki/MonaVie

Product overview

The MonaVie product line includes bottled juices, MonaVie Original, Active, Pulse, and (M)mūn in addition to gel pack versions of these products and an energy drink, EMV.
A patent application for Opti-Acaí, a primary product ingredient for MonaVie juices, was submitted to the World Intellectual Property Organization in 2004 by developers Alexander G. Schauss and Kenneth A. Murdock and approved by the U.S. Patent Office on July 21, 2009.

Product research

An analysis conducted by contract laboratory Chromadex indicated that Monavie contained low levels of key antioxidants such as vitamin C, anthocyanins, and phenolics. The phenolic level in Monavie was lower than that of apple juice (which is relatively low in phenolics), and Monavie was found to contain one-fifth the vitamin C level of Welch's grape juice.

Distributor earnings

Monavie products are sold by non-employee distributors who are eligible to receive commissions based on product sales. Individual distributors are encouraged to build their own sales networks by recruiting new distributors to sell the products (referred to in multilevel marketing parlance as a "downline"); the recruiter can, in theory, receive additional commissions based on sales by their downlines.

Regarding the earnings prospects for Monavie distributors, a Newsweek article reported that, based on MonaVie's 2007 income disclosure statement, "fewer than 1% qualified for commissions and of those, only 10% made more than $100 a week." More than 90% were counted as wholesale customers, whose earnings Newsweek said were mostly discounts on sales to themselves. According to a top recruiter, the dropout rate in 2008 was around 70%.
According to an article published by the Hartford Courant, the Monavie 2008 income disclosure statement shows that about 45% of the company's distributors earned an annualized average check of less than $1,600, and 37% took home about $2,000; approximately 2% earned an annualized average check of more than $29,000, and just 7 out of 80,000 distributors. Monavie Executive VP Henry Marsh responded to Newsweek's analysis of distributor earnings, stating that "...more like 14 percent..." of distributors make a profit.

Criticism
Nutritional value disputed

Physician Andrew Weil and nutritionist Jonny Bowden claim that the nutritional and health benefits of MonaVie juice are not proven and that the product is exorbitantly priced relative to more cost-effective conventional antioxidant-rich foods, such as blueberries, raspberries, and pomegranates. According to Men’s Journal, a nutritional analysis conducted by ChromaDex, a contract-testing laboratory, showed that MonaVie Active juice "tested extremely low in anthocyanins and phenolics" and that "even apple juice (which also tested poorly) has more phenolics". The report also noted that "MonaVie’s vitamin C level was 5 times lower than that of Welch’s Grape Juice."

Misleading advertising and health claims

Bowden, Newsweek correspondent Tony Dokoupil, and Palm Beach Post reporter Carolyn Susman commented on the use of misleading promotional testimonials by MonaVie distributors in which the product was said to prevent and treat a variety of medical conditions. Dokoupil noted that “the FDA warned MonaVie about medicinal claims on its Web site” in reference to the Food and Drug Administration's action against MonaVie distributor Kevin Vokes in July 2007. According to the FDA's warning notice, Vokes had promoted MonaVie as a drug in violation of the Federal Food, Drug, and Cosmetic Act by claiming that it was effective for treating inflammation, high cholesterol, and muscle and joint pain. The FDA was ultimately satisfied with the company's response after the claims on the offending website had been greatly dialed down. In a 2008 article in Forbes magazine, reporters Emily Lambert and Klaus Kneale described MonaVie as a pyramid scheme and noted that a MonaVie video testimonial by distributor Louis "Lou" B. Niles implied that the product could cure cancer. Niles, who claims in the video to be a doctor and an end-stage cancer specialist, is introduced at the distributor-sponsored meeting by Monavie executive Jason Lyons.

Company executives have repeatedly acknowledged ongoing problems with Monavie distributors making unlawful claims that the juice can treat and prevent diseases. A Newsweek article published August 2, 2008, noted that CEO Dallin Larsen "realizes that his sales team can get him in hot water with the Feds", and in reference to the company's ability to investigate distributors suspected of making false claims, Larsen commented that "it’s next to impossible; like herding cats." A November 4, 2008 statement from the company noted: "many distributors, perhaps unwittingly, have engaged in methods of advertising that are in violation of MonaVie’s policies. Such actions put our business and yours at an unnecessary risk." In a May 14, 2009 Bloomberg News article, Monavie executive vice-president and cofounder Randy Larsen was quoted saying that "the company is struggling with independent distributors who promote the juice as a miracle drug."

Dallin Larsen and Dynamic Essentials/Royal Tongan Limu

MonaVie CEO and founder Dallin Larsen was previously a senior executive with an MLM company that sold a similar juice product prior to being shut down by the FDA for illegal business practices. According to Newsweek correspondent Dokupil, Larsen, who was “a 20-year-veteran of the multi-level marketing industry", "left a senior post at another juice company in 2002, a year before the FDA destroyed the company's ‘bogus products’ that were being falsely promoted to treat ‘cancer, arthritis and attention deficit disorder’." The company in question, Dynamic Essentials, distributed an MLM juice product known as Royal Tongan Limu juice. According to the U.S. Federal Trade Commission Dynamic Essentials, from 2001 to 2003, had illegally advertised that Royal Tongan Limu ””was clinically proven to cure, prevent, or treat a range of diseases and disorders such as allergies, diabetes, cancer, and Alzheimer’s disease.”
Pyramid scheme allegations

In spring of 2008, Larsen formed a business partnership with former Amway distributor (Quixtar in the US) Orrin Woodward, founder of an Amway distributor sales network company known as TEAM. Woodward subsequently became a distributor and speaker for MonaVie, mixing his TEAM organization structure and distributor sales tools (e.g. sales brochures, audio/video recordings, etc.) concept with MonaVie's compensation plan. In 2008, Forbes magazine reporters Emily Lambert and Klaus Kneale noted:

“Team is one step ahead of all these juice selling schemes. It is a pyramid atop a pyramid. It is selling motivational aids to help MonaVie vendors move the juice. But wait. If you can't earn back the $258 you've spent on the motivational lectures by selling $39 juice bottles, you could earn it back in another way—getting people to buy $258 motivational lectures. If you're good, you flog the lectures to other people, who sell them to yet others. Everybody gets rich. Everybody, that is, except the last round of buyers. That's the theory, anyway. The reality is that a mere 1% of Team members make any money from involvement with the firm.”
Regarding pyramid scheme issues, Lambert and Kneale elaborated:

”In a 1979 regulatory action involving [Amway], the Federal Trade Commission attempted to draw lines between legitimate and fraudulent pyramids. The ones that are legit focus on getting revenue from consumer goods sold to retail customers. The FTC did not, however, define ‘retail’ in that case. That leaves plenty of wiggle room for guys like Orrin Woodward; he counts the vast majority of people in his pyramid, who seemingly try but fail to make money, as retail customers..”

Litigation

The company, its executives, and various senior distributors were involved in five lawsuits between 2007 and 2009. MonaVie was the plaintiff in trademark infringement suits against rival companies Fruitology (2007) and Amazon Thunder (2007) and was the defendant in false advertising suits filed by Amway (2008), Imagenetix (2008), and Oprah Winfrey/Mehmet Oz (2009).

On July 11, 2007, Monarch Health Sciences, the company that launched MonaVie, filed a lawsuit with the Utah district court against rival açaí juice manufacturer Amazon Thunder, alleging that owner/founder Todd Reum had made “harmful, false, and defamatory statements" about MonaVie which "purportedly injured Monarch’s reputation”. The suit sought $75,000 in damages. On November 15, 2007, the Utah district court ruled to dismiss the case against Reum.

On November 8, 2007, Monavie, Inc. filed a trademark infringement suit against Fruitology, a rival acai beverage (Fruitavie) manufacturer, in Utah District Court. Monavie voluntarily dismissed the suit on March 20, 2008.

On March 17, 2008 MonaVie preemptively filed a lawsuit with the Utah district court asking for a ruling as to whether Quixtar Inc. and Amway Corp. had been over-reaching the boundaries of its non-compete agreements and address whether or not such agreements are enforceable for independent distributors.

On March 18, 2008, Quixtar North America filed a multi-count federal court complaint against the MonaVie company and 16 of its distributors (John Brigham Hart, Lita Hart, Jason Lyons, Carrie Lyons, Lou Niles, Farid Zarif, and 10 anonymous defendants) for unfair competition. The complaint alleged that MonaVie competed unfairly by making false claims about its products. According to a company press release, MonaVie filed to dismiss the Amway/Quixtar lawsuit on April 15, 2008. On November 12, 2008, MonaVie et al. filed a lawsuit in the Colorado District Court against Quixtar.

On May 5, 2008, the MonaVie company, its board of directors, and several of its senior distributors were sued by Imagenetix, Inc. for $2.75 billion over trademark infringement arising from false claims that Monavie Active juice contained the ingredient Celadrin. The case was settled out of court and the lawsuit was dropped on May 20, 2008. On June 2, 2008 Imagenetix announced that it had entered into a new business relationship with MonaVie, the terms of which were not disclosed.

An August 20, 2009 article in the Chicago Sun-Times reported that television celebrities Oprah Winfrey and Dr. Mehmet Oz filed suit against 40 companies that are either selling açaí or related products, with their name endorsements on them." According to their complaint, such companies are "fabricating quotes or falsely purporting to speak in Dr. Oz's and/or Ms. Winfrey's voice about specific brands and products that neither of them has endorsed." Monavie Inc. was one of the companies named as a defendant in the lawsuit. Winfrey’s website elaborated that “consumers should be aware that neither Oprah Winfrey nor Dr. Oz are associated with nor do they endorse any açaí berry product, company or online solicitation of such products, including MonaVie juice products."

So there you have it. Facts are facts. I am interested in hearing your thoughts on this....

G-MAN

Practice what you preach

2010-02-17T12:23:00.000-08:00

Okay okay I get it. Raven Starr is probably making the statement just to lash out at the company she used to represent but honestly, does she not have a valid point? In commenting on the weight loss properties of the acai berry Raven had this to say on her facebook, "I Keep seeing so many ACAI weight loss ads... If ACAI berries really make u lose weight, why are so many Top Level MONAVIE Reps/Executives overweight? Seriously, I was there for 5 years. I'm not trying to be mean, I'm Just honestly asking."

It is a point and opinion that has gotten our attention. Ty Tribble posted the comment on his blog and left it for the masses to decide. We are going to take it a step further, currently we are looking at the top 10 leaders of the top companies in the business as well as their founders, to see which companies have the healthiest distributors and executives. We will keep you posted on our findings.

Does it not make sense however to be the best example for the product you sell? How can you talk about health and wellness acheived by taking a certain nutritional product when you can not demonstrate that in your own life? Stay tuned...

Same Ol Mission Different Name

2010-02-05T10:17:00.000-08:00

The purpose of this site is to protect the industry that we all care for. The Direct Sales world is full of opinion, testimonials and emotion. There is no place for that here. This is a place to discuss facts, the industry and how to make it better, bigger, faster and stronger.

We hope that this will be the beginning of something great. We have a small group of individuals from different companies that will all be contributing to this blogsite. Our moderator Espinoza from before has had too many family commitments and has handed the responsibility to me.

Check back regularly for new posts and feel free to comment. Remember that we welcome objectivity, accuracy and truth. if you push a particular agenda or a certain company in particular we will ask you to back it up with facts. Expect to be challenged and to be criticized but all within the scope of leaving this industry a little better than we have found it.

Websites To Assist Your Search and Business

2010-02-05T10:01:00.000-08:00

Here are some very helpful sites for commentary and resources as they relate to the industry.

http://www.mlmwatchdog.com

http://mlmblog.typepad.com (this site has moved to the next one below but there is a ton of excellent archived information still on this one.)

http://mlmblog.net/page/2

http://www.mlminsider.com/

http://www.dsa.org/

http://www.wfdsa.org/

http://www.directselling411.com/

http://www.mlmlegal.com/

Additionally these two organizations are looked at with disdain in our industry but I have found that if you know the rules, and know their agenda, it equals the playing feild and keep you and your organization on the up and up.

http://www.fda.gov

http://www.ftc.gov

COMPANY PAYOUTS

2010-02-05T09:59:00.000-08:00

This is the old post from mlmwhistleblower.blogspot.com we have update a few of the numbers here so even though you have seen it before on the other site, you may find new and interesting information on here.

This was originally a breakdown created by an insider with Manatech. I have had many discussions via email about this information, so I am very interested to get some feedback after posting it here. We don't have many views now, but the email blast goes out tomorrow so I am expecting that to change. Keep the information coming!

What do the major direct sales companies actually pay out to their own distributors?

Agel
Agel’s payout is likely in the 35-37% range. One could argue that it has reached 42.5%. This would be the theoretical high but it is unlikely that they have never paid out at this level.

Agel does pay a maximum of 50% on commissionable Volume but not on money spent on commissionable volume products. That is why it is not likely that they have ever hit the 50% payout. In addition, they offer a disclaimer about reducing their distributor’s commission checks in order to comply with the 50% cap. How and especially when that kicks in would be instructive. Also included in the max 50% payout is the 3% that is set aside for Luxury Car Program, Travel Expense Allowance and Leadership Retreat.

Agel products already have a split. You get an average of .85 volume on $1.00 spent. If they pay a max of 50% on commissionable Volume then you must take ½ of the .85 which is 42.5% payout. The 42.5% is the maximum payout percentage. It is much more likely that the real percentage is under 40% and probably in the 35% 5o 37% range.

Here is an Agel Training Slide which offers and explanation of their methods. Sept. 2008: http://www.slideshare.net/garyhasson/agel-pay-plan-september-2008

Amway
Amway pays out 30%.

Here is a link to a recent interview with Doug DeVos:
http://www.mlive.com/business/west-michigan/index.ssf/2009/02/qa_steve_van_andel_doug_devos.html

For a time Amway was publicly traded in Japan and thus figures could be reverse engineered. The payout percentage was the same. Amway Japan 1998 @ 30.0%

The great question for Amway is if it counts payouts to unoccupied positions in its tree as part of the payout to the field? This is relevant because the Amway Company allows breakage. A leading distributor can be removed or dismissed. But his position then usually reverts to the company. Thus the company receives this money as well. If this is counted as “pay out to the field” then the actual payout to working distributors may be substantially less than the 30% claimed. Even as it is, Amway has the lowest payout of any major MLM company.

Furthermore, it is widely believed that Amway aggressively seeks to limit by law the payout of other companies. In Korea, Amway alledgedly helped write a law that limits all MLM companies from paying out more than 35% of its sales income to its own distributors.

Forever Living

Like many companies Forever Living has split pv and split pricing. So their payout depends on what products you sell. The sales generally run 60% Juice Sales and 40% other products and our sources say that “this might be a little conservative.”

Here is the calculation on a 60/40 ratio of Juice to other products and a calculation of 50/50 Juice to other products. Also, they changed the 66/33 to be 42% instead of 41% (rounding error.)

60% Juice and 40% other products = 40% payout (Theoretical Max – doesn’t take into account any breakage that goes back to the company - if they have breakage)

50% Juice and 50% other products = 37% payout

75% Juice and 25% other product = 44%

66.6% Juice and 33.4 other products = 42%

Product Sales Breakdown

Scenario 1: 75% Juice and 25% other products = 44% payout ratio

Scenario 2: 66.6% juice and 33.3% other products = 42% payout ratio (changed based on rounding)

Must take the volume per product multiplied by 53% payout on commissionable volume to determine the payout percentages:

- Juice volume is .94 multiply 53% = 49.82% payout on juice

- All other product average volume is .49 multiply 53% = 25.97% payout on combination of all non-juice products

- Hiro volume is .27 per $1 = 14.31% payout on Hiro products

- Nutrition volume is .37 per $1 = 19.61% payout on Nutrition products

- Supplement volume is .80 per $1 = 42.4% payout on Supplements

- Trim volume is .44 per $1 = 23.32% payout on Weight Loss

- Foods & Teas volume is .28 per $1 = 14.84% payout on Foods & Teas

- Facial Care volume is .85 per $1 = 45.05% payout on Facial Care

- Body Care volume is .40 per $1 = 21.2% payout on Body Care

Herbalife
In 2008 Herbalife paid out 33.8%

Manatech
In Q2 ’09 Mannatech’s payout was 59%, the highest for any Direct Sales organization.

While its payout varies for each quarter the annual average is between 44 and 46%.

(Quarterly report info is based on our websites that show quarterly filings)

Details on Mannatech payout.
2008 Annual payout @ 44.9%
Net Sales of 332,708,000
Distributor Commissions & Incentives of 149,595,000

Q2 2009 @ 59.7%
Net Sales of $77,644,000
Distributor Commissions & Incentives of $46,419,000

Q2 2008 @ 47.6%
Net Sales of $86,781,000
Distributor Commissions & Incentives of $41,368,000

Six Months ending June 30, 2009 @ 54%
Net Sales of $148,345,000
Distributor Commissions & Incentives of 80,145,000

Six Months ending June 30, 2008 @ 47%
Net Sales of $178,232,000
Distributor Commissions & Incentives of 83,860,000

MonaVie
MonaVie’s payout is reportedly between 32% and 36% of Sales. With the new sales of EMV payout % are probably closer to 32%.

Details for MonaVie: The company will not disclose any actual numbers. They do state that they payout 50% on commissionable volume but according to Newsweek that is only 1% of its sales force. If you take into account that they have split PV then the payout is significantly less than 50% of sales. Below is a payout for each product based on product sales:

22% payout on 1 case of EMV (Cost of $68 for 30 in volume: Payout is based on 50% of 30 volume (15/68 = 22%)

25% payout on 3 cases of EMV (Cost of $198 for 100 volume: Payout is based on 50% of 100 volume (50/198 = 25%)

27% payout on 6 cases of EMV (Cost of $375 for 200 volume: payout is based on 50% of 200 volume (100/375 = 26.6%)

38% payout on 1 case of MonaVie Pulse (Cost $131 for 100 volume: payout is based on 50% of 100 (50/131 = 38%)

38% payout on 1 case of MonaVie Active (Costs $130 for 100 volume: payout is based on 50% of 100 (50/130 = 38%)

41.6% payout on 1 case of MonaVie Original (Cost $120 for 100 volume: payout is based on 50% of 100 (50/120 = 41.6%)

An important question for Mona Vie would be if they count their large “headhunter” fees as payout. Mona Vie reportedly pays between $1 million to $5 million as personal bonuses to networking leaders as enticements to leave their own MLM companies and work with them. These kinds of bonuses are not available to the average person and if they are counted as payout by the company then the amount will shrink even more for the average distributor.

This from Newsweek, “… according to MonaVie's 2007 income disclosure statement, a federally required printout of their distributor earnings. More than 90 percent were considered ‘wholesale customers,’ whose earnings are mostly discounts on sales to themselves. Fewer than 1 percent qualified for commissions and of those, only 10 percent made more than $100 a week. And the dropout rate, while not disclosed by MonaVie, is around 70 percent, according to a top recruiter.” - By Tony Dokoupil, Newsweek, Aug 11, 2008,
http://www.newsweek.com/id/150499

Nu Skin
In 2008 Nu Skin paid out 42.4%
Tahitian Noni
They have a stated 53% payout on Commissionable volume but it is loaded with split pricing which guts it dramatically. Best estimate? The payout is between 41% and 44%.
Here are the details. TNI has over 100 products each product has a different split ratio with the Juice being the highest at .94 per $1 spent and Hiro having the lowest of .27 per $1 spent. I have broken out by two possible sales scenarios:
Product Sales Breakdown
Scenario 1: 75% Juice and 25% other products = 44% payout ratio
Scenario 2: 66.6% juice and 33.3% other products = 41% payout ratio
One must take the volume per product multiplied by 53% payout on commissionable volume to determine the payout percentages:
Juice volume is .94 multiply 53% = 49.82% payout on juice
All other product average volume is .49 multiply 53% = 25.97% payout on combination of all non-juice products
Hiro volume is .27 per $1 = 14.31% payout on Hiro products
Nutrition volume is .37 per $1 = 19.61% payout on Nutrition products
Supplement volume is .80 per $1 = 42.4% payout on Supplements
Trim volume is .44 per $1 = 23.32% payout on Weight Loss
Foods & Teas volume is .28 per $1 = 14.84% payout on Foods & Teas
Facial Care volume is .85 per $1 = 45.05% payout on Facial Care
Body Care volume is .40 per $1 = 21.2% payout on Body Care

USANA

In 2008 USANA paid out 41.6%

Xango
In 2008 Xango paid out 50%

Conclusion: Manatech’s 59.7% payout, reached in the Second Quarter of 2009, is the highest payout of any major MLM.

BOB AND WEAVE

2010-02-02T09:19:00.000-08:00

Hello All,

This is the new site for mlmwhistleblower.blogspot.com. After many issues and problems, we decided to move all the info here and start over again. More secure, better contributors. Check back often as we get this thing up to snuff.

G Man