LifeVantage presents itself as a direct selling company with a lucrative business opportunity. However, in this LifeVantage review a closer look reveals some disturbing details.
Is LifeVantage a good business opportunity? Based on objective criteria, LifeVantage does not appear to be a good business opportunity because most people who try the LifeVantage opportunity do not make money.
In evaluating LifeVantage, I objectively analyzed five factors based on information found on the LifeVantage website. You can use this information to determine if LifeVantage is right for you.
Is LifeVantage a Legitimate Business Opportunity?
If you are considering the LifeVantage business opportunity, you might be very excited about the prospect of earning a lot of money, or maybe even becoming financially independent in a few years.
If you make the wrong decision about LifeVantage, you could instead lose a lot of money, waste a lot of time and energy, damage personal relationships and possibly harm your job or career. It happens.
As much as possible, I encourage you to take a sober view of LifeVantage and carefully consider the points I make in this article. If you are too excited to make a rational decision, ask someone you trust to read this article and help you make the best decision for you.
LifeVantage Sells a Dream.
Remember, LifeVantage is selling you a dream that you can have your own business and make lots of money. Unfortunately, as you will see in a moment, most LifeVantage distributors lose money.
To determine if LifeVantage is a genuine business opportunity, I asked five revealing questions and then answered each question from information on the LifeVantage website.
I also write a bit about the MLM industry in general and what it takes to succeed as a distributor.
Dr. Jon Taylor.
Dr. Jon Taylor, Ph.D. created these questions as a means of determining if an MLM is a pyramid scheme or a recruiting scam. Unfortunately, the laws governing MLMs are becoming so lax that most have more in common with scams than they do with legitimate direct selling opportunities.
Here are the five questions I asked to determine if LifeVantage is a legitimate business opportunity;
- Is success with LifeVantage dependent on recruiting?
- Does LifeVantage permit unlimited recruiting in a specific area?
- Are LifeVantage distributors required to spend a lot of money to get started and continue to spend money to qualify for commissions or bonuses?
- When a sale is made, does the LifeVantage distributor making the sale earn about the same as someone upline who had nothing to do with the sale?
- Does LifeVantage pay overrides or commissions on more than four levels above the distributor making the sale or purchase?
In this article, I focus on these questions one at a time and show you why the answers are so important. Ultimately, by answering these few questions, you can determine how much money you can expect to make with LifeVantage and the statistical probability of your success.
Is Success with LifeVantage Dependent on Recruiting?
Yes. LifeVantage is dependent on recruiting. Look at the LifeVantage compensation plan, and you will see that at every level, a distributor is required to recruit.
Like a pyramid scheme, if LifeVantage stopped recruiting, the company would collapse.
Direct selling scams are identified by their focus on chain recruiting instead of selling products to the public. Chain recruiting is when a distributor is forced to recruit more distributors who then recruit more distributors.
Chain recruiting combined with other unethical policies leverage the wealth of a sales force, so money flows up through the organization and concentrates in the pockets of the founder and top-level distributors.
This leverage takes money, time and energy from the majority of the distributors who are forced to buy products and recruit more distributors who are then forced to buy the product and recruit, etc. so only a very few at the top making money.
Because LifeVantage is dependent on recruiting, it is probably a de facto pyramid scheme regardless if it is declared to be a pyramid scheme by authorities.
Does LifeVantage Permit Unlimited Recruiting in Any Given Area?
Yes. LifeVantage does permit unlimited recruiting. Unlike true direct sales, no territories are protected. As a LifeVantage distributor, you are competing against all other LifeVantage distributors, even the ones you recruit and those with a global online presence.
Recruiting is Difficult.
As soon as you sign up as a distributor, you will probably discover it is difficult to recruit new distributors because the area is saturated with LifeVantage distributors. Prospects have already heard the pitch and made their decision. Or worse, they’ve tried LifeVantage and lost money.
With a legitimate sales opportunity, your territory would be protected like a retail franchise. For example, you might have a territory of 10,000 people or a mile radius around your home. By controlling territories, a legitimate opportunity offers realistic income potential.
Unfortunately, LifeVantage does not protect territories. Instead, it promotes unlimited recruiting wherever LifeVantage is legal. Unlimited recruiting creates the illusion that you can recruit the world and become very successful. Unfortunately, that is all it is, an illusion.
Unlimited recruiting is a characteristic of a pyramid scheme. Pyramid schemes live and die by recruitment. When recruiting stops the scheme collapses.
A pyramid scheme cannot survive where territories are protected and recruiting limited.
Are LifeVantage distributors required to spend a lot of money to get started and continue to spend money to qualify for commissions or bonuses?
Yes. LifeVantage distributors are required to buy bulk products in the form of “Opportunity Packs” to launch their business and then continue to buy products each month on auto-ship to qualify for commissions and bonuses.
The LifeVantage “Opportunity Pack Table,” found on the LifeVantage website, lists three “Opportunity Packs” that cost $300, $600 and $1,200.
Also, look at the LifeVantage Compensation Plan, and you will see that at every level a distributor is required to buy a minimum amount of product. The minimum amount of product a distributor must move through their organization ranges from 100 PV to 200 PV with a minimum 40PV purchased by the distributor.
PV means “Personal Volume.” It’s a point-based metric assigned every LifeVantage product. If 1PV equals $1, the minimum product purchase per month is $100.
Pay to Play.
Requiring distributors to buy a minimum amount of product is “Pay to Play.” “Pay to Play” is a characteristic of a pyramid scheme.
Distributors can boost their monthly PV by buying more product. Also, “Pay to Play” encourages distributors to set up dummy distributors and buy more product through the dummy accounts to create the illusion of success. Naturally, this strategy can quickly lead to insolvency.
Please think about this next point very carefully. When you join LifeVantage as a distributor, you must pay the company for the privilege of selling their product. And, you must continue to pay for that privilege each month by buying more product.
No other industry does this. It’s insane and pushes the major costs of operating the company down to the lowest levels which can least afford it.
A legitimate direct selling opportunity does not make you pay for the privilege of earning money for the company.
When you add the cost of buying products to the operating costs of doing business as a LifeVantage distributor, you lose money.
Over time, the cost of buying products can become thousands of dollars. If you were required to invest thousands at the beginning, the nature of the LifeVantage pyramid would be obvious. However, by milking you a little each month and promising you success, the scheme is not as apparent.
When a sale is made, does the LifeVantage distributor making the sale earn about the same as someone upline who had nothing to do with making the sale?
Yes. When a LifeVantage distributor makes a sale, each level of her upline earns about the same from that sale although they had nothing to do with it.
In other words, the money flows to the top. Generally speaking, only the people at the top are paid. This is a characteristic of a pyramid scheme.
Does LifeVantage pay overrides or commissions on more than four levels above the distributor making the sale or purchase?
Yes. LifeVantage pays overrides on nine levels. More than four levels are unnecessary and reveal a structure that funnels money from the bottom of the organization to the top, a characteristic of a pyramid scheme.
Legitimate direct selling companies have no more levels than is necessary to manage the sales force. The most are usually only four; Local, State, Regional and National.
The More Levels the More Leverage.
The more levels in an MLM, the more leverage is created to take money from thousands of distributors by forcing them to buy the product and channeling that money to a few at the top.
Leverage in the LifeVantage organization is the same as “residual income.” Please keep in mind that this income is generated by forcing the downline to buy the product. The wealth at the top of LifeVantage comes out of the pockets of the little guys at the bottom.
For example, imagine that a LifeVantage distributor recruits five new distributors. And assume that those five distributors recruit five, and so one down the line. And, assume a $5 commission on each sale. These simple assumptions reveal the exponential growth of the pyramid. The example below is for only six levels. LifeVantage has nine levels!
A Product-Based Pyramid Scheme.
LifeVantage is yes for every question.
According to Dr. Taylor, if the first four questions or all five are answered with a ‘yes’ a high degree of exploitation and harm to distributors is evident. And that LifeVantage distributors are unwitting customers locked into spending more on LifeVantage products than they are earning. The probability of ever earning a positive cash flow is near zero.
The LifeVantage Earning Disclosure.
A link to the LifeVantage Earnings Disclosure, aka Distributor Compensation Summary, can be found in the footer of the LifeVantage website.
The Distributor Compensation Summary is extremely misleading. Read it carefully. You’ll see that your prospects of making money with LifeVantage are doubtful. The odds of making money playing Blackjack in Vegas are better than your odds of making money with LifeVantage.
According to an article on Forbes.com, your odds of winning at Blackjack are 50/50. Keep that number in mind and take a look at the LifeVantage Distributor Compensation Summary.
You can read the text on the first page if you want, but it’s the table on page two where things get interesting. Notice on the top right corner, it says “Average % of Paid Distributors as a % of Total Distributors.”
LifeVantage Doesn’t Count Losers.
LifeVantage only counts the distributors who made money! That is very misleading. It looks like 40% of LifeVantage distributors made $9,440 a month, but that is not true.
The $9,440 a month figure is the maximum and could have easily been manipulated by someone at the top dropping $9,440 on a dummy account.
Look again at the table.
It says that 40% of the LifeVantage distributors Who Earned a Commission earned on average $13 a month! Stay with me. It gets worse.
If you add up the percentages in the far-right corner, it should add up to 100%, but it doesn’t because LifeVantage did not count the distributors who did not earn any commissions.
Add up the percentages, and you get 76%. That means that 24% of the distributors did not make a single dime in commissions. Stay with me. It’s going to get ugly.
Add the missing 24% that did not make anything, to the 40% that made an average of $13 a month, and you can see that 64% of the LifeVantage distributors earned less than $13 a month in commissions.
And, if that wasn’t bad enough.
Remember, a LifeVantage distributor must either buy or move a minimum of 100PV of product each month. Assume that costs the distributor $100 a month.
Keep that number in mind and look at the second level of the LifeVantage table. You’ll see that 18% of the distributors earned an average of $79 a month. They didn’t break even.
Remember, 64% of the LifeVantage distributors made even less. In other words, 82% of LifeVantage distributors lose money! And that’s as good as it gets.
Remember the blackjack odds you have only a 50% chance of losing. LifeVantage you have an 82% chance of losing. That’s no way to run a business.
When you factor in the expenses of doing the business, the odds are substantially worse.
Look at the percentage of distributors who earn enough to live on. It’s minuscule.
You have to be at least a PREMIER PRO 5 to earn on average enough to survive. That level pays a monthly average of $2,551. Only 1% of the LifeVantage distributors earn that. Only 1%.
Remember that is what was paid in commissions. It does not include the cost of products, paying to meet minimum PV or business expenses.
In other words, there is a 99% chance you will earn substantially less than $2,551 a month as a LifeVantage distributor.
It doesn’t matter if you work hard, how much your sacrifice, how good you are, how much you think positively, how much your spouse believes in you or how lucky you feel. These are the numbers. As a LifeVantage distributor, the odds are stacked horribly against you.
The only advantage LifeVantage offers is to the founder and the handful of distributors who were there when the company was started. Everyone else is at a disadvantage.
How to Succeed as a LifeVantage Distributor.
Success as a LifeVantage Distributor means you must be able to go into someone’s kitchen, look them in the eye and sell them the dream of making lots of money with LifeVantage and at the same time know in your heart that they don’t have a snowball’s chance in Hell. And you have to do it day after day, week after week for years.
LifeVantage product line includes Protandim, Axio Energy Vault, Axio Endure Charged, plus nutritional, weight loss, and beauty products. There’s nothing special about any of these products. They’re expensive, and there is massive competition from retail stores, eBay, Amazon, Walmart, every drug store, other distributors and dozens of competing MLMs.
It will be challenging to sell LifeVantage products.
Sales can be difficult when you’re trying to talk someone into buying an expensive product they don’t want, don’t need and didn’t ask for.
The LifeVantage Compensation Plan.
The LifeVantage Compensation Plan has little bearing on reality. You’ve seen the real numbers in the LifeVantage Distributor Compensation Summary. Those dismal numbers are the numbers to remember.
The purpose of the LifeVantage Compensation Plan is to create the illusion that you can make a lot of money as a distributor and to dangle this illusion under your nose to keep you buying products.
LifeVantage Distributors are NOT Entrepreneurs.
LifeVantage distributors are not entrepreneurs. They are contractual commission salespeople who are forced to pay for the privilege of making money for the company.
You Are Not Building a Business for Yourself.
As a LifeVantage distributor, you are not building a business for yourself. You’re spending your energy, time and money building a business for LifeVantage. Why would you do that?
Can You Make Money with LifeVantage? As a LifeVantage distributor, it is doubtful you will earn more than you spend on the product. A careful reading of the LifeVantage Distributor Compensation Summary shows that only 1% of LifeVantage distributors earn more than an average $2,551 a month BEFORE business expenses and mandatory product purchases are deducted.
Is LifeVantage a Pyramid Scheme? LifeVantage is probably not a pyramid scheme, however that does not mean it’s a good opportunity. Most LifeVantage distributors spend more on the opportunity than they earn. A minimum wage job is more profitable.
If you found this article helpful or have experience with LifeVantage to share, please leave a comment below. Thank you.