Isagenix: Hungry for commissions

Bronwyn Rideout (May 23, 2022)

Country of Origin: Gilbert, Arizona, United States

Year Founded: 2002

Founded by: Kathy Coover, Jim Coover, John Anderson

Year MLM established in New Zealand: June 28th, 2007

Generally sells: Dietary supplements

“Cult” products: 9 and 30 day cleansing programmes, although they seem to be moving into the essential oil market. Isalean shake (a meal replacement shake) and Ionix Supreme are popular products.

Name for workforce: There are 5 ranks: Associate, Consultant, Manager, Director, and Executive. Each rank from Manager upwards has a sub-rank of Crystal that is awarded when a sales or promotion target is met within a very brief period of time of becoming an Associate (like becoming a Manager within 60 days of joining).

Is there a buy-in?: Technically, no.

As per the compensation plan, ISAGENIX encourages everyone to become a customer before signing up as an independent associate. “Customer” comes in 2 flavours, with and without autoship. Both offer a 25% discount on products, but with autoship it's cheaper ($25/annum), compared to the $50/annum fee paid without autoship; this makes sense, as autoship is when an MLM automatically reorders and ships your preferred products every 4 weeks.

Customers are incentivised to become Associates as they are eligible to accumulate 100 units of Personal Volume/Group Volume (PV) in any 30 day period during their first 90 days. PV is the combined Business Volume (BV) from products that the Associate/customer purchases directly from Isagenix, and what customers purchase directly from the associates website.

Customers have 180 days to convert to an Associate, and can utilise their accumulated BV from previously purchased, eligible products to jump-start their rewards. If that doesn't happen in the first 90 days, the customer is given an additional 90 days where their PV is still valid. If that preferred customer does convert, they then need to sustain active status with an accumulated group volume (PV volume of one's downline) of 100 within 30 days of conversion. Those 100 units do not necessarily need to be from products that one purchases for themselves or sells directly, but often will be. Active status is reassessed on a daily basis.

Compensation Plan?: Here. Money is earned from multiple avenues, including in-person sales (retail profits), sales through approved websites (retail direct profits), making qualifying sales to new members (called Product introduction bonus), recurring sales from your downline (Team bonuses or cycles), and executive matching team bonuses.

If a distributor chooses to inventory load, they can purchase wholesale to have on hand, and if a customer purchases it at full retail price, the distributor can earn up to 30% profit. If the customer purchases from the website, ISAGENIX ships on behalf and pays the distributor up to 30% profit - minus an approximate $5.00 admin fee.

A distributor at the Associate level cannot earn bonuses from what is called the Team Bonus (cycle) until they are a paid-as Consultant. ISAGENIX is a bit unique here (and their compensation plan becomes more obtuse than other MLMs) in how the downline is organised from hereon in. If you have at least two personally enrolled associates in your downline, they are initially divided into the left and right sales team. The left team is called the Major volume team and the right team the Minor volume team.

In order to become a consultant, the associate and their two teams each have to earn 100 BV in the prior 30 days (300BV total). The consultant can then earn an extra $54 each time their team completes a bonus cycle; to complete the bonus cycle, the Left/Major volume team must sell a minimum of 600BV together, and the Right/Minor volume team must sell a minimum of 300BV total. Depending on productivity, cycles can occur multiple times a day and a maximum of 250 times a week.

Excess volume from the Major volume team cannot be transferred to the Minor sales team to help them meet the minimum for the consultant to earn a cycle. However, any PV the consultant earns in excess of 100PV needed to remain active is applied to the BV targets of the Minor volume team. When you complete a cycle, if either team has earned more BV than their allotted target, that BV is held over to the next cycle - as long as the consultant remains active at that level. Distributors qualify for a pin based on how many cycles they complete; consultants and directors are part of the silver circle programme, while Executives are in the gold circle.

When a distributor reaches the Executive rank, they are eligible for what is called a re-entry position, and this essentially allows them to merge their Minor volume team into their Major Volume team, allowing them to build a new Minor volume team. At this stage, the distributor can also earn the top recognition rank of Platinum.

Distributors are not limited to just their market, they can request permission to sell in other countries where ISAGENIX is legally registered to operate and open for business

Additional bonuses can be earned if a new member to the scheme purchases a programme or pack for the first time.

Income Disclosure Statement?: Here. In 2017, there were 17,000 members in Australia and New Zealand. Excluding in-person sales, 50% (8,750) made more than $325. The other half, obviously, made less. Of the top 50%, the average annual income was $5,566. The top 10% (1,750) made an average of $23,708 and the top 1% made more than $39,582, with an average of $148,110. In Australia and New Zealand there are 26 so-called Isagenix millionaires; these are associates who exceed $1 million in cumulative gross earnings.

Price Guide: Here

Has a reputation for: Very low calorie diets, which may be effective in the short term but for a majority of persons who attempt this, the diet is unsustainable.

Should you be worried?: Activity in New Zealand appears to be quite low. Unlike other MLMs, the Australian/NZ side of things does not appear active with trips and conferences.

Origins

Do not let the youth of ISAGENIX, compared to other MLMs I've covered, deceive you into thinking that this is doing something new or innovative. New MLMs often rise from the ashes of unsuccessful MLMs, or when top-sellers become dissatisfied when they hit the ceiling. ISAGENIX is no different. Jim and Kathy Coover, along with John Anderson, have long histories with network marketing schemes.

Both Wikipedia and the ISAGENIX homepage are vague about the prehistory of its founders; with the ISAGENIX website touting the years of experience that they have in the MLM industry, without revealing where that experience came from. In a cached interview from the defunct TheNetworkMarketingMagazine.com, Kathy spills the beans. Kathy owned and operated her own dental hygiene centre before beginning her MLM career with PrimeQuest in 1992. PrimeQuest is a nutritional supplement company that acquired the American rights to the Cambridge Diet a decade prior. The Cambridge Diet (aka The Cambridge Weight Plan and the 1:1 diet) was a controversial fad diet that consisted of meal replacement products and a restricted diet of 330 kcal/day. Several dieters died due to a lack of food.

In her interview, Kathy claimed that Jim was the founder of the Cambridge diet, while other unverified sources state he was actually the CFO. Much like my research on Sri Chinmoy, it seems that with the passage of time some things really do not stay on the internet forever, making it easier for such schemes and schemers to reinvent themselves.

When PrimeQuest was sold, Kathy took her very profitable downline to another MLM, which she does not name - but she did note that it was fairly new. However, the new MLM took most of her downline away from her, causing a drop in income from $40,000/month to $5000/month. Kathy quickly left and joined yet another, nascent MLM called The Tax People. While Kathy would have you believe that they were shut down because the US government didn't like the company helping people to get tax deductions, in reality The Tax People was a front to defraud the IRS through the sale of illegal tax deductions and fraudulent filing of federal income tax returns. Customers were charged from $300 to $1,200 USD to join, with $100/month per package; packages included tax advice, tax return preparation, and audit protection.

After a brief break, Kathy joined a travel company (name unknown) which unraveled after 9/11. Kathy had intended to finally retire when a colleague of Jim's from his Cambridge Diet years, John Anderson, got in contact to see if Jim wanted in on a new health and financial wealth venture. This would become ISAGENIX, and the rest is history.

Sort of…

The Business Side

Similar to Herbalife, you may not know that you are engaging with an ISAGENIX distributor initially. Websites such as these are not subtle in letting you know they only sell the MLM's products, and are also keen to sell you the opportunity. But their distinctive websites give the brief impression that they are truly independent, and the sale of ISAGENIX is incidental. It is a bizarre marketing strategy, for sure.

ISAGENIX is also proactive in getting on top of their SEO rankings. A search of ISAGENIX under GoogleScholar will bring up a front page of papers funded by the MLM which, shocker, demonstrate that ISAGENIX is not a fad and totally works.

The Nutritional Side

For better or for worse, ISAGENIX has a much lower risk of death than The Cambridge Diet, but the ghost of the latter haunts the product list. ISAGENIX heavily relies on the liquid diet model of meal replacement, and their health and nutrition claims are as unsupported and lacking evidence as any of the other health-based MLMs. Harriet Hall, MD and notable skeptic, described it as a slightly new wrinkle on the old scam that is detox and cleansing diets. Within the products included in the 30-day weight-loss system are references to cleansing herbs that aid in digestive regularity, green tea extracts, adaptogens, and capsules that will accelerate your body's thermogenesis. All nutritional buzzwords, and little if any of it has been clinically tested - and if they have, as with adaptogens, the findings are inconclusive.

Relative to what one's diet was before starting ISAGENIX, I would wholeheartedly agree that taking part in a 30-day cleanse would be effective in dropping weight, because during the average shake day one would only consume only 1,000 to 1,500 calories. Sure, the website attempts to promote that the plan is customisable and for larger men or athletes, healthy food can be added to the plan to make it less of a starvation diet - but most consumers will not be athletes or men who have a larger frame. Also, as ISAGENIX distributors are not trained dieticians or nutritionists, it may be unreasonable to expect them to promote such a variation in the plan; especially when many distributors tout the amount of money one will save NOT buying standard groceries, let alone take-aways, when they eating less and buying from ISAGENIX more.

No. Seriously. It's a feature. Not a bug.

Source

Youtuber Mack Attack does a brief critique of the nutrients (or lack thereof) of three popular ISAGENIX products, as well as a brief history of the MLM. Australian consumer advocacy group CHOICE is quick to point out that there are cheaper versions, such as Optifast, that would achieve the same results while leaving you with a fatter wallet and maybe even slightly better nutrition.

It is also worth noting that, in 2020 and 2021, numerous ISAGENIX products were recalled in Canada due to excessive levels of vitamins, which caused illness in consumers. A literal former ISAGENIX poster child, Chera Harris of British Columbia, Canada, filed a civil claim in 2021 against the company due to the chronic overdose of vitamins and minerals from its meal replacement products. Harris claimed the overdose caused her chronic pain, abnormal heart rhythm, and sleeplessness, to name just a few of her symptoms.

Product Maths

As you can see, there are multiple ways to purchase from ISAGENIX. Being a preferred customer or wanting regular autoship gives one a steep discount. Even if you do pay the annual membership fee, the mark-up will be minimal when spread across multiple purchases.

By going with the Subscription options, or preferred customer, one can earn 246 BV for the 30-day weight loss system above, which is more than enough to be eligible for the Team Bonus as long as everyone is either buying or selling enough PV per month - but not enough to initiate a cycle for the extra $54. There is also no consistency in the ratio between the wholesale price and BV value, but it seems to be between 2.1 and 2.4 based on the subscription price.

BUT, let's do maths with a simpler product that a distributor can inventory load. My workings are also assuming that the distributor is selling to a preferred customer and not to guests, so there is some loss in retail profit.

A Customer would need to buy/sell this…elixir… at $255 to earn the 110 PV needed to maintain active status. This allows them to become an Associate. If there is no downline, then the Associate could earn up to $76.50 on personal commission on that product alone, with an additional $10 bonus if this is the first time the customer purchased that product. If the Associate sold the product to one customer, and then recruited two people to also sell the same product, they would earn the $76.50 retail commission, a $10 bonus, plus $50 for advancing their rank to consultant.

Now, our new consultant is able to unlock the team bonus cycle. The Consultant still needs to maintain 100 PV in order to stay active and have PV on hand to help the Minor volume team pass the post. But let's assume that this isn't necessary. The Consultant's Major volume team needs to sell 6 of these vitamin packs, a total of $1,530, to match the 600 BV (with 60 PV to hold over) required for the turnover to a new cycle. The Minor volume team must sell 3 products ($765) to reach their 300 BV threshold. When that occurs, the consultant can potentially earn an additional $54 for completing a cycle. If that is all they do that month, then the consultant can earn $190.50 including the bonuses mentioned.

For the Skeptics

NZ and Australia broadsheets claimed several years ago that ISAGENIX was tearing up the Southern Hemisphere. Today? you would be hard pressed to find a distributor freely advertising at present. However, many untrained distributors are still able to sell products as part of an unbalanced diet with ingredients whose benefits are overstated at best. There remains some concern that overseas distributors are able to sell to a New Zealand market through online shopping, as ISAGENIX is allowed to legally trade here, meaning that there is an additional layer of administration that consumers face in the event of a recall or general dissatisfaction.