Isagenix

[arthwollipot]

A friend of mine has recently been recruited into selling Isagenix products.

He invited me to his "business/product launch" and the red flags went up immediately. For a start, it's a multi level marketing scheme, which are always dodgy at best. Secondly, the product has been very roundly criticised by Dr Harriet Hall at Science Based Medicine.

I suspect my friend is going to waste rather a lot of money on this, and he doesn't have a lot to waste.

 

[marplots]

From the link:

Isagenix will bring out the best in you. It’s an opportunity for health, wealth and happiness. You can be your own boss, own your own business and be supported by a multi-million dollar company. You’re in business for yourself, but not by yourself. Our goals are simple; to create the healthiest people on the planet, to pay out the most in commissions, and to have FUN along the way.

What's not to love about that?

 

[sophia8]

If any MLM products were any good, why isn't the company selling them directly and thus reaping all the profit?

 

[marplots]

If any MLM products were any good, why isn't the company selling them directly and thus reaping all the profit?

They are, aren't they? Selling directly to their distributors. It's like having a loyal customer base under contract. Sweet deal if you can get it.

 

[icerat]

If any MLM products were any good, why isn't the company selling them directly and thus reaping all the profit?

If Coca-Cola (pick a product!) were any good, why do they sell them through stores instead of directly and thus reaping all the profit?

 

[marplots]

If Coca-Cola (pick a product!) were any good, why do they sell them through stores instead of directly and thus reaping all the profit?

Because stores already have an existing customer base and foot traffic. This represents an additional expense if Coca Cola wanted to take it on. The comparison fails unless we can demonstrate that distributors of Isagenix also have this existing customer base. Do they?

A better analogy would be with a single-manufacturer outlet store run as a franchise. There are other areas where this doesn't fit, but it's at least closer to what you want.

 

[icerat]

A friend of mine has recently been recruited into selling Isagenix products.

He invited me to his "business/product launch" and the red flags went up immediately. For a start, it's a multi level marketing scheme, which are always dodgy at best. Secondly, the product has been very roundly criticised by Dr Harriet Hall at Science Based Medicine.

Haven't been through all of Dr H's criticisms yet. A heart it's the usual medico<->nutrition industry debate with the same arguments from both sides.

Some of her complaints seem off base though, or perhaps out of date. For example they're not promoting "woo" cleansing, rather the idea that the body needs proper nutrition to do this stuff itself, which is perfectly reasonable. She also states "the amount of vitamin A in the products was dangerous", when I look at her original critique she was actually talking about one product, not products, and I can't find that one. One product as 100& RDA, the rest were 50%. Even there her critique is a little hypocritical, falling for the same types of fallacies that "pro" nutrition people do, citing studies with a particular target group (smokers) and extrapolating that to the population, even though the mechanism causing problems with Vitamin A and smokers is now understood and doesn't apply to most non-smokers.

ETA: It also took me less than 10 seconds on google scholar to find quite a bit of info on Isagenix's science claims, which Dr H said she couldn't find.

Anyway, no matter what your opinion of nutritional products, there's no disputing there's a legal market for them, which means there's a potential business opportunity.

I suspect my friend is going to waste rather a lot of money on this, and he doesn't have a lot to waste.

Isagenix has an industry standard buy-back policy so unless he does something stupid he shouldn't lose money if he decides it's not for him.

From a business perspective, on the positive side Isagenix is a DSA member, which means they agree to adhere to certain ethical standards. They're also A+ rated at BBB, with few complaints registered. They're currently ranked the 36th largest direct selling company in the world, with sales of $334million.

On the negative side they require a certain amount of personal volume (sale or personal use) to maintain active status and earn group commissions. This, particularly along with autoshipping, can result in people buying products they don't really want, which is illegitimate demand and puts it at risk of being a pyramid (not to mention leads to many of the complaints people have about MLMs). It's also a "binary" MLM compensation plan, which are notorious for building quickly (and making you money quickly) and then falling apart just as quickly if you take a break.

So, any product issues aside, it appears a legitimate business opportunity, but like most businesses it takes a deal of time and dedication if you want to make any decent money and as a binary requires a particular focus.

 

[icerat]

Because stores already have an existing customer base and foot traffic.

Really? A brand new store already has an existing customer base?

This represents an additional expense if Coca Cola wanted to take it on. The comparison fails unless we can demonstrate that distributors of Isagenix also have this existing customer base. Do they?

People who open new stores must create a customer base if they want to make money, same as Isagenix distributors must do.

A better analogy would be with a single-manufacturer outlet store run as a franchise. There are other areas where this doesn't fit, but it's at least closer to what you want.

It's a silly question no matter what analogy you use. No product "sells itself". Direct sales companies pay their agents to market, fixed retail outlets (including internet stores) pay advertising companies. The key difference is that advertising agencies (usually) get paid even if their campaign fails, whereas direct sales agents typically only get paid when they get results.

 

[Dr. Imago]

The older I get, the more firmly I believe in the principle of caveat emptor.

I have seen friendships - lifelong friendships - ruined over MLM schemes.

Caveat emptor.

~Dr. Imago

 

[icerat]

I have seen friendships - lifelong friendships - ruined over MLM schemes.

This goes both ways though.

MLMers need to respect people who don't want to do it (which is most people) and people who don't want to do it should respect the decision of those who do (even if they might disagree with it)

I actively and successfully built a business using MLM and never lost a friend and made many - including people I met who didn't want to join our team. I was taught to respect people's decisions. Most of the broken friendships I've encountered from studying the industry have come from the non-mlm friends attacking the person who has decided to pursue an mlm opportunity, even to the extent of actively undermining their potential to succeed. Imagine you had started a business you believed in and one of your "friends" was actively attacking you and undermining you, how would you feel about the "friendship"?

 

[marplots]

It is interesting to see how the defense is conducted here:

If Coca-Cola (pick a product!) were any good, why do they sell them through stores instead of directly and thus reaping all the profit?

Because stores already have an existing customer base and foot traffic. This represents an additional expense if Coca Cola wanted to take it on. The comparison fails unless we can demonstrate that distributors of Isagenix also have this existing customer base. Do they?

Really? A brand new store already has an existing customer base?

We have shifted from retail sales in general to "brand new stores" as if the job of Coca Cola were to sell retail opportunities instead of selling to existing businesses. So let's look at that.

Coca Cola will give discounts to new, unproven retailers based on expectations of sales. Coca Cola is not out trying to get retailers to open new locations or sponsor others. And retailers would be foolish to compete based solely on the product line that Coca Cola can provide.

It matters not that Coca Cola is a huge corporation, they simply do not have enough variety in their product line to create "Coke stores." And why would they? Indeed, why would Isagenix not sell their products through GNC if they could?

Coca Cola also does direct to the public marketing of their products. I can name at least 5 and I don't drink any Coke products. How many MLM products can I name? Maybe one, "glizen" is it? A toothpaste?

What disturbs me is the willingness of the arguer to be so disingenuous. Someone who knows a great deal about MLMs shouldn't be willing to make these false, simplistic comparisons between an MLM and Coca Cola.

People who open new stores must create a customer base if they want to make money, same as Isagenix distributors must do.

How much of a market survey is done before awarding a distributorship? How deep does the credit check go? What is the parallel between opening a retail sales base and the type of one-on-one sales made through an MLM?

Here, the trick is admitted:

It's a silly question no matter what analogy you use.

Then why did you make the analogy in the first place?

No product "sells itself". Direct sales companies pay their agents to market, fixed retail outlets (including internet stores) pay advertising companies.

Another false equivalence. In the main, retail outlets take advantage of the advertizing done by the brand. No retailer in their right mind would waste their money advertising a brand they do not own. (Advertized sales are meant to increase store traffic, not push a particular brand and may get a Coke coupon funded by the brand. Sales papers are not ads pushing distinct products, but draws based on prices.)

MLM agents are not "paid to market" unless there is some relationship I am unaware of where money is paid without linking it to sales volume. Icerat admits this, but watch the trick:

The key difference is that advertising agencies (usually) get paid even if their campaign fails, whereas direct sales agents typically only get paid when they get results.

The trick is that we have shifted once again and now we aren't talking about retail sales outlets anymore. The same set of circumstances have been run through the mill and come out as:
1) Like retailers who get discounts based on volume
2) Like new stores that buy stuff without knowing what sales will be
3) Like marketers who are paid based on commission sales

MLM may be many things, but it is the falsest of false equivalencies to pick and choose attributes that are "like" other businesses. It's like saying that a serial killer is "like" a surgeon because he removes organs, or that my home business is "like" Microsoft because both entities pay taxes.

If a poster does have an expertise and fails to use that expertise to point out the discriminators, I have to call foul. We are not informed when told a duck is "like" a platypus because they both have webbed feet. We are informed when the differences are pointed out instead.

It is one thing to make sweeping generalizations when ill-informed about a subject, but for an expert to do so? Not good. It makes me think there really is something being concealed behind the platitudes.

 

[icerat]

Then why did you make the analogy in the first place?

I didn't - sophia8 analogised direct sales with store sales.

No retailer in their right mind would waste their money advertising a brand they do not own.

Yeah. I suppose just like I don't exist, neither does that pile of papers downstairs from the local supermarkets advertising all those products they don't own. Including coke. Figments of my imagination

Oh, thaat's right. They're not advertising coke. They're ... something else ... blah blah blah.

But your right, no retailer in their right mind would advertise brands they don't own. Like this one. Wouldn't happen.

MLM agents are not "paid to market" unless there is some relationship I am unaware of where money is paid without linking it to sales volume. Icerat admits this, but watch the trick:

You're right. They don't get "paid to market". They get paid for creating sales. Which I said in two other places in the post. How dishonest of me. What a trick.

But please, do share how they can increase sales without marketing.

1) Like retailers who get discounts based on volume

they are.

2) Like new stores that buy stuff without knowing what sales will be

no, it's the MLM critics who claim that one. The opposite is true. "traditional" retailers typically estimate future sales and place orders in advance. MLMers typically place orders only after getting customer orders.

3) Like marketers who are paid based on commission sales

they are.

Here's a coke store for you by the way.

 

[marplots]

Here's a coke store for you by the way.

That's exactly what I mean. If you can find a single instance of a legitimate company to use, it counts somehow as supporting MLM. Think about that. Why not justify MLM's based on what makes them MLM's instead of cherry picking similarities with what non-MLM companies do?

From your link (a story about Coke retailing directly - at least I think that was the point):

From delivery and filling to service and equipment, Coca-Cola handles all aspects of your vending machine. No worries or work for you and, in most cases, at no cost.

Fine. Show me the MLM that does something similar. Then, try to make the case that this portion of the pie is representative of how MLM's operate.

If I wanted to promote MLM's, I'd push those differences that make them unique, not parallels with non-MLM's. Tell us why they are better. That's how to make the argument. At this point, it sounds too much like how someone might justify woo: "We do scienc-y things too."

Do MLM's do "business-y" things or do they do business?

If Isagenix has a value as a business, state what that value is.

 

[fuelair]

A friend of mine has recently been recruited into selling Isagenix products.

He invited me to his "business/product launch" and the red flags went up immediately. For a start, it's a multi level marketing scheme, which are always dodgy at best. Secondly, the product has been very roundly criticised by Dr Harriet Hall at Science Based Medicine.

I suspect my friend is going to waste rather a lot of money on this, and he doesn't have a lot to waste.

You are correct in your assumption re:money if he "invests" in this rubbish.

 

[Roboramma]

That's exactly what I mean. If you can find a single instance of a legitimate company to use, it counts somehow as supporting MLM. Think about that. Why not justify MLM's based on what makes them MLM's instead of cherry picking similarities with what non-MLM companies do?
From your link (a story about Coke retailing directly - at least I think that was the point):


Fine. Show me the MLM that does something similar. Then, try to make the case that this portion of the pie is representative of how MLM's operate.

If I wanted to promote MLM's, I'd push those differences that make them unique, not parallels with non-MLM's. Tell us why they are better. That's how to make the argument. At this point, it sounds too much like how someone might justify woo: "We do scienc-y things too."

Do MLM's do "business-y" things or do they do business?

If Isagenix has a value as a business, state what that value is.

Because this whole line of discussion was in response to:

If any MLM products were any good, why isn't the company selling them directly and thus reaping all the profit?

 

[marplots]

Because this whole line of discussion was in response to:

If any MLM products were any good, why isn't the company selling them directly and thus reaping all the profit?

So, are you satisfied with an answer in the form of, "other companies don't sell directly to the public either?"

Doesn't that just raise the question, "Why don't other companies sell directly to the public either?"

The point is that we haven't yet heard a reason for MLM's doing what they do, based on whatever it is that distinguishes an MLM as a definable entity. If you asked me why I had a bumper sticker on my car, would you be satisfied with the answer, "Other people have bumper stickers on their cars too?"

The implication (from the original question, not me) was that not selling retail highlighted some flaw in the MLM product. I don't think it does. But there should be a valid business reason for not doing it. Some possible reasons could be exclusivity, ability to control distribution, or simply stubborn capriciousness. Or, as implied by the original question, it might very well be that MLM products suffer from impaired merchantability.

 

[Roboramma]

So, are you satisfied with an answer in the form of, "other companies don't sell directly to the public either?"

Doesn't that just raise the question, "Why don't other companies sell directly to the public either?"

It certainly does, and I think that would be an interesting discussion, but it seems to be outside the scope of this thread.

The response, that other (successful) companies also don't sell directly to the public is enough to show that this is not necessarily diagnostic of fraud.

Now, I am pretty suspect of MLM myself, I just think icerat's response to that particular point seems valid, and that while your discussion of this issue is certainly interesting, it's not a really relevant to this thread.

 

[marplots]

It certainly does, and I think that would be an interesting discussion, but it seems to be outside the scope of this thread.

The response, that other (successful) companies also don't sell directly to the public is enough to show that this is not necessarily diagnostic of fraud.

Now, I am pretty suspect of MLM myself, I just think icerat's response to that particular point seems valid, and that while your discussion of this issue is certainly interesting, it's not a really relevant to this thread.

Fair cop. I'll also plead guilty to being overbearing and rude. Apologies to the Ice man. I'll try to do better.

Getting back to Isagenix, here's part of what they say under "Opportunities" on their website:

If these tough times have you worried about job security or about losing your position, your worries stop here. Isagenix can help you redefine your lifestyle. You may want to make $500 a month to make a car payment, or $100,000 a month to live the life of your dreams. No matter what you want, it’s here for you. Join us!

I think that bit would be very appealing to someone struggling to get by. How might he go about evaluating the claim? What is Isagenix's burden of proof here?

 

[icerat]

I think that bit would be very appealing to someone struggling to get by. How might he go about evaluating the claim? What is Isagenix's burden of proof here?

They're required to offer an income disclosure showing what people have actually achieved - which they do.

Legal precedent, and in some states actual laws, along with DSA membership rules, also require the to have a reasonable "buyback" policy, so that people have the opportunity to try it, and if they decide it's not for them, or too hard, or whatever, they can get most or all of their money back. This minimizes financial risk, though as with anything there's always potential opportunity costs.

Isagenix has a buyback rule -

The request for a Buy-Back must be made within 12 months of the product’s original purchase date. Reimbursement will be made for the value of the original order less a 10% restocking charge, freight, rebates, bonuses and personal discounts. Isagenix will be liberal in its application of the Buy-Back policy on termination of an Associate or Preferred Customer Position, but Isagenix will not repurchase products or issue refunds on products certified as having been consumed or sold.

Hmmm, however reading their policies, the annual membership fee you must pay to register is not refundable. Only $49 or $36 dollars (depending on registration choices) but definitely worth being aware of. Still, not a major financial risk.

 

[arthwollipot]

US laws don't necessarily apply in Australia.